The Sutherlands home-improvement store and lumberyard in Boulder is closing after 38 years in business.

The 3390 Valmont Road store will close early next week, said Bob Sutherland, who runs the Boulder store and eight others in Sutherland Lumber Co.'s Rocky Mountain region.

After distributing materials to other stores in the region, the Boulder store will reopen sometime later in the summer to sell the remaining merchandise at a discount to the public, he said.

The distressed state of the construction market was the final nail in the coffin for a store that took hits from competition and the city's growth restrictions, Sutherland said. During the 1980s, Sutherland Lumber officials ran into financial roadblocks when wanting to expand its Boulder building, he said, adding that the city's surcharge on retail development would have doubled the construction costs.

Separately, Sutherland Lumber wanted to invest in a large store to anchor Twenty Ninth Street, the redevelopment of Boulder's Crossroads Mall, but lost out to The Home Depot, he said.

"When Home Depot opened on Twenty Ninth Street, it really hurt us," Sutherland said of the hardware and building supplies retailer's January 2006 arrival.

When faced with fresher competition in the past, Sutherlands stores typically would take a hit and gradually grow its business back within two years, he said.

"Two years in, then the construction market died hard," Sutherland said. "Plus the long-term demographic was changing. The old-school cowboy do-it-yourselfer is a dying breed here in Boulder...

"I can't second-guess it, I've got to move on."

About 20 people work at the Sutherlands Boulder store. Sutherland hopes a number will continue to work for other stores within the company. Calling them "very employable," Sutherland said he expects his employees to "land on their feet."

Sutherland added that the company's newly expanded Fort Collins location should be able to serve customers well.

"A lot of our business is north of Highway 66 anyway," he said. "The location in Boulder is tough."

The property's future could involve a land sale and a potential commercial development, he said.

The Sutherland property sits on about 5.6 acres and its location could play a prominent role in the future Boulder Junction transit village, he added.

A year ago, the property was put on the selling block with an asking price of $4.5 million. Despite being under contract for about half of that time, the potential buyer eventually dropped out, said Terry Kruegel, a broker with the Boulder-based Colorado Group, who listed the property.

"The only real problem was there was so much uncertainty regarding the Transit Village," Kruegel said of the planned 160-acre transit-oriented development.

Stepping in now will be local developer Andy Bush, with Morgan Creek Ventures, who intends to partner with Bob Sutherland on a large-scale redevelopment of the site. Bush plans to move his offices to the Sutherland Lumber site, redevelop the primary Sutherlands structure and transition the site into creative offices for small companies and also spaces for green building supplies. The initial building redevelopment work could begin as early as the end of August, Bush said.

During the next six to 10 years, Bush said he plans to build a mix of office and residential properties on the site, including a couple of retail buildings. The recent rezoning also will allow for greater density, he added.

"It'll be a great place for much more affordable product geared more toward younger professionals, younger couples," Bush said.

Contact Camera Business Writer Alicia Wallace at 303-473-1332 or wallacea@dailycamera.com