http://paloaltoonline.com/print/story/print/2013/12/20/redevelopment-forces-shakeup-of-downtown-retail-scene


Palo Alto Weekly

News - December 20, 2013

Redevelopment forces shakeup of downtown retail scene

Independent retailers eye other cities for new space

by Sue Dremann and Eric Van Susteren

Downtown Palo Alto's redevelopment trend and high rents are pushing another longtime retailer to another city.

This week, owners of the 65-year-old University Art and its The Annex gift store confirmed the business, which is a destination for artists, will leave Palo Alto and construct its own building at 2550 El Camino Real in Redwood City.

University Art had been looking for a space to buy or move into in Palo Alto for the past two years, said Cornelia Pendleton, the store's CFO and daughter of one of the founders. They tried to purchase their current building, at 267 Hamilton Ave., in 2008 but were outbid, she said.

The move is being forced by the building owner's plans to retrofit the Hamilton space, and the store would have had to relocate for at least two years, she said. University Art looked at moving into the old Apple store on University Avenue, but the rent was too high.

It wasn't feasible to stay in Palo Alto, where space goes for at least $4 to $6 a square foot, which is more like $6 to $8 per square foot with taxes, insurance and maintenance, Pendleton said.

"It's very difficult to be a small retailer in today's market. ... Economically it does not make sense. There are guaranteed rent increases in the future. It's not sustainable," she said.

University Art owns its San Jose and Sacramento store buildings.

Pendleton's aunt, Lauretta Cappiello, now 91, and her mother, Virginia Biondi, 89, started the business in 1948 with her grandfather, Anthony Cappiello. The family had moved west from New York.

They purchased University Office Supply store, which was located at University Circle in downtown. In 1957, the store moved to Hamilton Avenue north of Waverley Street and in 1964 to its current location, she said.

Anthony Cappiello died in 1957, but Pendleton's mother and aunt are still on the board of directors.

The store and adjacent The Annex gift store will stay open until the spring.

Pendleton told the Weekly she will miss the ambiance of downtown Palo Alto. She'll miss stepping out the door to talk with merchants or strolling to one of the many restaurants or coffee shops. But Palo Alto's popularity has made it increasingly difficult to find parking in downtown. The new location will have plenty of parking, she said.

The 11,000-square-foot Redwood City store will have an open floor plan, an improvement over the current layout that is divided into small rooms.

"It will be everything we are now, and more. And it's only four miles door to door (from here)," she said.

University Art joins several other downtown retailers that have closed or moved in the past year or whose future is unclear.

In June, Stanford Electric Works, a 99-year mainstay, moved from High Street and Everett Avenue to Mountain View after reportedly being outbid by a $3 million dollar offer for the property from the owner of California Skin Institute, a dermatology chain.

Palo Alto stationer Congdon and Crome, a downtown fixture for 109 years, closed its store on Waverley Street this year.

Empire Vintage Clothing, located at 443 Waverley St., is moving to Mountain View after the Christmas season, the store announced on its website.

The fate of the downtown gift and jewelry boutique Shady Lane, a fixture for 38 years, is up in the air. A proposal to redevelop the 441 University Ave. site went in front of the city's Architectural Review Board last month. A two-story, 24,750-square-foot mixed-use building is proposed.

The architect is the Hayes Group, two of whose modernist building plans have recently been appealed to the City Council and survived.

Owner Alice Deutscher said the store's lease is up in February, and she does not know if they will be allowed to stay on.

"We have known for a long time that the building could be torn down. The writing is on the wall. We're just part of what's happening in downtown," she said.

"We would love to go on and be part of the community as we have. ... People love finding a local store that is connected to a community. There's less and less of that now," she said.

Shady Lane is looking for another place, preferably on University itself.

"It's hard to be off the avenue. It's kept us vital in many ways," Deutscher said.

House of Bagels, which has been in Palo Alto for 30 years, is also looking for a new location. Its building in the 500 block of University Avenue is slated for redevelopment. The new building at University and Cowper Street will include ground-floor retail and office space.

Staff Writer Sue Dremann and Online Editor Eric Van Susteren can be emailed at sdremann@paweekly.com and evansusteren@paweekly.com.

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