Wal-Mart looks at downtown site

Wal-Mart Stores Inc. has expressed interest in moving into Downtown Crossing next year after Federated Department Stores Inc. vacates one of its two huge buildings in the shopping district, according to a local executive and an official.

Wal-Mart executives met about a month ago with Boston officials to discuss opening a store in the struggling retail area on Washington Street after Federated eliminates the Filene's brand and shutters the flagship store.

''They're interested in the downtown location," said an official briefed on the discussion, emphasizing that the talks are preliminary.

Philip Serghini, a Wal-Mart spokesman, said he could not confirm the Bentonville, Ark., company is interested in Downtown Crossing.

Seth Gitell, a spokesman for Mayor Thomas M. Menino, declined to comment.

A number of retailers are eyeing the Downtown Crossing location since Federated disclosed last month that it plans to vacate either the Macy's or the Filene's building on Washington Street. Federated, which yesterday completed its $17 billion deal to buy Filene's parent, May Department Stores Co., said it had not decided whether it would keep Macy's at its current location or move it across the street to the Filene's building.

Discounter Target Corp. was one of the first to express interest in the location, according to Menino. Since then, a person involved in the talks has said Home Depot Inc., Jordan's Furniture, and Kohl's Corp. have approached the city about moving into the Downtown Crossing site.

Federated spokesman Jim Sluzewski would not identify retailers that have approached the company about the Downtown Crossing location, except to say, ''Our sites across the country are generating a great deal of interest."

For Wal-Mart, Downtown Crossing represents another opportunity to move into an urban location. Over the past year, the world's largest retailer has opened several stores in downtown locations, including in New Orleans and Salt Lake City. Another Wal-Mart is under construction in Chicago. But unlike the company's other urban stores, which have parking garages or parking lots near the sites, the Downtown Crossing building in Boston has no parking.

In a previous interview, Wal-Mart spokeswoman Daphne Moore said the company started in rural areas where people didn't have the same options as urban residents.

Now, the ''flip side is true," Moore said, and Wal-Mart is reaching out to ''mini-urban markets" where consumers have less access to low prices and wide selection, compared with those who live in suburban and rural communities.

Suzanne Mulvee, a real estate economist with Property & Portfolio Research Inc. in Boston, said that space constraints make it difficult to construct anything large in Boston, much less a structure to house a big-box retailer like Wal-Mart or Target.

Mulvee said Wal-Mart is ''definitely feasible, but unlikely to move into Downtown Crossing" because of opposition that the retailing giant often faces when it moves into new communities. Currently, there are about 18 Wal-Marts in Massachusetts. The closest one to Boston is in Quincy.

''It's a lot more politically friendly to say we're bringing in a Target than we're bringing in a Wal-Mart," Mulvee said.

Moreover, she said that Target is more likely than Wal-Mart to bring the kind of face lift that Downtown Crossing needs. A Target spokeswoman did not return calls seeking comment. But in previous interviews she has said the company is not involved in negotiations for the Downtown Crossing location.

The two department store buildings at Downtown Crossing are in fact quite different. The Filene's building, closer to Government Center, was built in 1912. Across Summer Street to the south, the Macy's building was built as a Jordan Marsh store building in 1949.

The Filene's building, now owned by Federated Department Stores, is slightly smaller, and has as a tenant another retailer with a familiar name, Filene's Basement. (Filene's Basement is a separate company.) The Macy's building is owned by Markley Group LLC, of Los Angeles, and has many telecom tenants on the upper floors.

Last month, Federated said it planned to turn all remaining Filene's stores into Macy's stores and close 68 stores nationwide, including about a dozen in New England.

The Cincinnati company said yesterday that it would divest itself of an additional seven department stores, including a Filene's in Hyannis. In total, these 75 stores accounted for about $2.1 billion in sales last year.

These changes come as Federated tries to position Macy's more broadly as a national retailer to better compete with rivals; the combined company operates about 950 stores.

Also yesterday, Federated agreed to a settlement with Massachusetts and four other states that requires the company to allow rivals, such as Nordstrom or Neiman Marcus, to fill its vacancies in malls if competing retailers are interested and they make reasonable offers.

The five mall locations in Massachusetts are Braintree, Brockton, Burlington, Hyannis, and Peabody.

Jenn Abelson can be reached at abelson@globe.com; Thomas C. Palmer Jr. can be reached at tpalmer@globe.com.