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The former Kmart site in Rio Grande is set to become the new Social Services office for Cape May County, with plans for a new clinic for veterans to open in 2020.

MIDDLE TOWNSHIP — Vacant for more than a year, the building that once housed the Kmart in Rio Grande could become county offices in addition to serving as a medical clinic for veterans.

At a recent freeholders meeting, Cape May County’s governing body unanimously approved a $7 million emergency appropriation for the purchase of the building. Plans call for the county to relocate its Social Services office to the building.

According to Denis Brown, the county’s administrative aide, the deal will mean better financial terms for the county and the offices will be more accessible to the public.

The property had been appraised at more than $10 million, he said. At auction this year, the county put in the final bid of $5.75 million, short of the $7 million the freeholders had appropriated. Renovations to the building are expected to cost millions more, with an estimate between $6 million and $7 million.

At one time, the Rio Grande Kmart was the largest chain retail store in the area. Later, commercial development in the area brought new options, including a Walmart SuperCenter a short distance away. In January 2017, Sears Holdings included the Rio Grande Kmart in a list of 78 Sears and Kmart locations to close across the country.

A portion of the building is slated for use as a community-based veterans clinic. The Department of Veteran Affairs announced the deal earlier this month.

The VA will pay $1.3 million toward renovations, then pay rent to the county for the use of the space, according to county officials. There are also discussions over state offices locating in the same building under a lease agreement.

According to Brown, the county will double the space for the Social Services offices at less than the cost to lease the existing building. State and federal funds will help offset the cost of operations, he said.

The purchase also includes existing businesses, which Brown expects to remain open under county ownership.

“Nothing about the businesses there is going to change,” he said. The businesses will now pay rent to the county under their existing lease agreements. Businesses at the site include a gaming store, Save-a-Lot food store, a rental business and a Franks Theatres location.

Franks Theaters, based in Jupiter, Florida, formerly owned the property under an investment company. The Rio Grande Shopping Center was one of four Franks entities that filed for Chapter 11 bankruptcy protection in September.

According to Brown, the county originally planned to lease just the Kmart building, a deal that had been in the works for months but changed tack when the land came up for auction.

“County Counsel Jeff Lindsay called me with the idea of purchasing the property, and when he explained how it could benefit the county, we all decided to jump on it,” said Freeholder Director Gerald Thornton. “Freeholder Jeff Pierson and I have been working on this project for a while. I am proud of the whole team who put this project together.”

Renovations to the former Kmart building will be undertaken with the Cumberland County Improvement Authority serving as project manager, Brown said, under a deal that had been worked out earlier this year, when the county expected to merely lease the building.

County officials expect the VA clinic to be operational by February 2020, with the new location for the Social Services office to open after that.

Middle Township Committeeman Timothy Donohue, widely expected to be named mayor when Township Committee reorganizes Jan. 2, said township officials are analyzing the impact the planned mix of private tenants and government agencies will have on the township’s ratable base.

“We are glad to see the space being improved, the expansion of access to Social Services and the announcement of the location of a state-of-the-art veterans’ health care clinic in Middle Township,” Donohue said.

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