Certainly the building's awful placement, within a few feet of busy Alma with tight access and minimal parking, and the operator's lack of working capital contributed to its short run.
But leading to these problems was the city's poor handling of the redevelopment of this land in the first place. While many saw this train wreck coming before ground was even broken for what became primarily a housing development, many Palo Altans didn't tune into the issue until construction of the grocery store, right along Alma Street, began.
It is but another example of what's wrong with the city's "planned community" deals with developers that attempt to extract valuable public benefits from a developer who wants to exceed normal zoning limits.
In the case of Alma Plaza, owner-developer John McNellis chose a strategy of simply outlasting those who stood in the way of his desired housing development. For years, he allowed the former neighborhood shopping center to become an eyesore and a symbol of government obstructionism.
McNellis acquired the run-down 4.2-acre site of a shuttered Albertsons market in 2005, and then withstood numerous efforts by neighbors and city officials to create an upgraded neighborhood-serving retail center with a decent-sized grocery store. Instead, he wanted to convert the land to housing, a much more lucrative development, and offered a community meeting room and a small grocery store as the public benefits he would provide in return for approval to build 37 very cramped single-family homes.
After two years and 15 hearings, in January 2009 the City Council finally gave in, over the objections of the Planning and Transportation Commission and many residents, allowing McNellis to build the homes, a 5,000-square-foot retail building now occupied by Starbucks and a physical therapy office, a grocery store and 14 below-market-rate apartments above the store.
Finding a grocer interested in the space proved difficult.
After announcing that Michael "Miki" Werness would operate the store, there were many challenges for the former manager of Berkeley Bowl. He patterned Miki's after Berkeley Bowl, with a wide variety of organic produce and specialty foods and wines, and it found a following, but not large or quickly enough given his lack of working capital. A respected and well-liked grocer, he was able to persuade vendors to help him and attracted talented managers and employees, but in the end there were too many strikes against his operation. As just one example, due to the home construction behind the store, there was no way for the immediate neighborhood to even access the store without driving around the block.
For McNellis, who received the right to build the second phase of his housing project as soon as Miki's opened, his task now is to find another grocer who is willing to take a crack at the Miki's location. Under the terms of his development approval, he must maintain a grocery store in perpetuity, so the buildings cannot be used for another type of use.
But that stipulation does little to outweigh the mistake in judgment that permitted the conversion of this neighborhood retail space to housing in the first place. Construction and sale of 37 single-family homes on this site brings our community no public benefit, only private financial gain for the developer.
The recent history of Alma Plaza goes back to late 1997, when owner Albertsons sought approval to triple the size of the store to 50,000 square feet. Neighbors were strongly opposed, and the plans lapsed until 2003, when Albertsons offered another plan that included an enlarged store, rebuilding the center's retail area, construction of five single-family homes and stacking low-income apartments above the stores. The plan cleared all city commissions except the City Council.
A year later the plan was withdrawn, and in 2005 McNellis purchased the property and the grocery store closed later in the year.
Back then neighbors circulated a petition calling on the city to keep Alma Plaza as primarily retail. The neighbors said they wanted to see a "quality, affordable" grocery store, a post office, an ATM, a coffee shop, a dry cleaner, a bakery and a sewing service.
But McNellis had other plans and outlasted the petitioners and city planners. The site became a symbol of the long, tortured Palo Alto "process" and the City Council became focused only on getting the abandoned, ugly site redeveloped. We are now left with the permanent impacts of that ill-conceived decision.
We hope one unanticipated public benefit of this project will be a complete overhaul of the planned-community zoning system, something we have urged for decades and which the planning commission established as a priority at its meeting Wednesday night.