Humboldt County nears deal to buy former Kmart site in Eureka

Humboldt County supervisors moved closer to a deal for the vacant former Kmart at 4325 Broadway Street in south Eureka, a 7.99-acre parcel the county wants to turn into a One-Stop Permitting facility. The purchase would cost $5.75 million, require a $65,000 deposit within three days of signing, and close in a 45-day escrow, with county staff acknowledging that some terms are structured to favor the property owners.

The old big-box site has become a recurring target because of its size, its location at the southern end of Eureka, and its potential for a public-facing county use. County leaders had already moved toward buying the property before Walmart entered the picture, then briefly shifted to the old Sears building in Bayshore Mall after being outbid, only to return to the Kmart parcel when Walmart backed out of its plans.

For the county, the stated goal is a long-discussed One-Stop Permitting site, where developers and other applicants could handle permitting-related business in one place instead of moving between offices. The idea gives the purchase a clear civic purpose, but it also ties county government to a large real-estate commitment on a property that has sat vacant while local officials tried to decide whether it belonged in retail use or in public hands.

The City of Eureka had previously wanted to keep the site in retail use and on the tax rolls when Walmart was part of the deal. With Walmart gone and the county back in the lead, the question has shifted from whether the parcel will stay commercial to whether Humboldt County should spend millions to control a prominent piece of south Eureka land and then adapt it for government use.

The board also faced a much broader budget test. Supervisors were being asked to adopt a $657.8 million budget for fiscal year 2026-27, a 4.4% increase in spending from the current fiscal year, even though county budget materials say Humboldt still faces an ongoing structural deficit of roughly $12 million.

County staff said the year-end fund balance for fiscal year 2024-25 was expected to come in $7.7 million higher than anticipated, leaving $35.4 million in the General Fund for the current year. Staff also tied some of that improvement to board actions over several years, including voluntary furloughs, separation incentives and a hiring freeze in some departments.

Taken together, the Kmart purchase and the budget show the same tension running through county government: a rare chance to shape a key Eureka property, and a fiscal picture that still leaves little room for error.