A former Ashland movie theater that has sat vacant for four years might become a Grocery Outlet, potentially injecting more retail life into the Ashland Shopping Center at 1658 Ashland St.

City planning officials have been in discussion with Grocery Outlet about a potential move into the former Ashland Street Cinema, a building that was formerly a Ray’s Sentry Market in the 1990s. The building also houses Little Shop of Bagels and other enterprises. A Dutch Bros. kiosk, Sauce restaurant and Dollar Tree are also in the center. A Wendy’s restaurant faces Ashland Street at the entrance to the shopping center.

No application has been received yet from Grocery Outlet, but Brandon Goldman, director of Ashland Community Development, said staff has been in discussions about potential options, including reconfiguring the parking area.

“It’s more than just kicking tires,” Goldman said.

Since it was previously a grocery store, it would not have to go a more more complicated changed-use application.

“Prior to the Ashland Cinema, that building and that site were a grocery store. I believe it was a Ray’s Food Place for a number of years,” Goldman said.

Grocery Outlet, which has close to 500 stores in the U.S., would still have to get building permits for refrigeration units and other changes to the building.

If changes are made to the parking area, it would have to go through site review, Goldman said.

A representative from Grocery Outlet could not be reached for comment on Tuesday.

Grocery Outlet stores are currently located in Medford, White City and Grants Pass.

Ashland Street Cinema closed in 2021 after business declined during COVID.

The theater opened in 1996, offering more main attraction movies, while the Varsity Theatre in downtown Ashland offered more independent movies. Coming Attractions Theatres operated both. The Ashland-based company continues to operate the Varsity Theatre.

Ashland Street Cinema had been popular with Ashland residents, particularly for student and faculty at Southern Oregon University, a few blocks away.

The Siskiyou, the SOU newspaper, on January 27, 2021, posted an article about the closure of the Ashland Street Cinema.

“Our business model is such that we depend on people coming out for the social aspect of watching the movies in the cinema, and Hollywood is releasing films based on the fact that the theaters are open,” said Al Lane, the president and chief operating officer of Coming Attractions, said in the article.

Lane said at the time that social distancing requirements prevented people from going to the movies, according to The Siskiyou.

The closure of the movie house typifies Ashland’s ongoing struggles to pull its way out of a rash business closures, and the Shakespeare Festival has seen attendance drop in recent years, with fewer tourists coming to town.

Goldman said Ashland, like cities across the country, has seen retail take a hit over the past decade.

“We’re not seeing a lot of commercial development for commercial buildings,” he said.

Other retail stores in the shopping center welcomed the proposed Grocery Outlet.

“Being a business owner and having that space vacant for so long has kind of hindered our business,” said Kasidy Hanlan, owner of Earth Friendly Kids, a consignment store for children’s clothing and other items. “I think in the last five years, we’ve seen sales going down significantly.”

She estimates her business has declined by about a third since the theater closed, while also attributing it to other factors such as COVID.

Hanlan said she and her husband William Hanlan have owned the store for two years, when they purchased it from the previous owner.

Earth Friendly Kids receives clothing and toys from families on consignment, offering 30% to the family and the remainder to the store. On specialty items such as strollers, toddler beds, cribs and infant carriers it’s a 50/50 split, she said.

Rochana Schultz, owner of Sawaddee Thai and Asian Cuisine, said she would welcome the Grocery Outlet.

“Any business opening in Ashland is a good idea, otherwise it’s going to turn into a ghost town,” said Schultz, who opened the restaurant two-and-a-half years ago.