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Plan to replace JJ&F meets with opposition, skepticism
Original post made
on Aug 12, 2014
A proposal by the project developer's son to run the new grocery store at College Terrace Centre proved to be a tough sell Monday night, with Palo Alto officials bemoaning a lack of transparency and demanding more information about lease terms for the new market.
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posted Tuesday, August 12, 2014, 2:25 AM
Posted by jh
a resident of Evergreen Park
on Aug 12, 2014 at 3:48 pm
jh is a registered user.
This property is zoned for 25,000 square feet of building, 13,000 of which has to replace the existing retail, leaving 12,000 square feet for offices, and also a maximum two story building. This is because the property backs up to a residential neighborhood and is zoned Neighborhood Commercial, which is intended to protect all Palo Alto neighborhoods from the effects of large office buildings by providing a zone of transitional low density development.
However, the developer, Mr. Smailey, was determined he was going to build 60,000 square feet, with 40,000 square feet of office space. So Mr. Smailey applied for a zoning waiver to be given the infamous "PC" designation to allow him to do so. However, prior to submitting his original plans to the city he had jacked up JJ&F's rent so that it was untenable in an attempt to get them to go out of business. The Garcias tried to negotiate, but the property owners quietly filed a lawsuit with the intention of evicting JJ&F if they couldn't come up with the money. After all, why would they want to include a grocery store, an industry where margins are minimal and who couldn't match the higher retail rents that could be to charged.The Garcia's, not having the kind of money necessary to fight this settled out of court and signed a non-disclosure clause. Once they had done so they could never speak about this again, and so became pawns to be manipulated.
In public Mr. Smailey promised to include a lovely new store for JJ&F as justification for the development, and which he would only do if he got the full 60,000 square feet he was asking for. He even said JJ&F could remain in the existing store while he built the complex, and then they could move into their new space, after which he would tear down the old store. But at that time there was no deal to keep the rent affordable for a grocery store, and the developer and owners would have also known that the Planning Department had never enforced the existence of public benefits in any previous PC once the occupancy permit was granted.
Over a period of repeatedly trying to get the city to allow him to build his 60,000 square feet, Mr. Smailey ultimately had to include, as a condition, that he would provide a grocery store space for JJ&F, with an affordable rent to keep them in business.
In order to get the public behind this and pressure the council, Mr. Smailey hired a public relations consultant to orchestrate a campaign to convince the public how much he loved JJ&F, and how personally committed he was to including them in his development. With his slogan, "ONLY I CAN SAVE JJ&F," public sentiment was whipped up, and they organized supporters from near and far to cram the council chambers to put pressure on the council to approve the 60,000 square foot development. Although, as one of the Garcia's wryly remarked afterwards, "If they all shopped with me I would never have gone out of business."
But most everyone swallowed the Kool-aid and permission to build an almost 60,000 square foot development was granted. It's notable that having used JJ&F as a pawn, and they couldn't say anything he didn't approve, shortly afterwards JJ&F disappeared for good.
At least the council, unlike the public at large, had enough wisdom to realize that it was a very big "if" that JJ&F would be able to return after closing and liquidating their fixtures and stock, stay away for two years, and then afford at least a $1,000,000 loan to be able to set up a new store. So the council also included a clause in the PC agreement that if JJ&F were unable to return, then there must be a signed lease with a grocer of similar experience and standards providing the same products and services, before building could commence.
Mr. Smailey now says he has a signed lease agreement with his son to run the grocery store, so he should now be given permission to start building. The council didn't ask one pertinent question. What was Mr. Smailey's interest in this property AFTER, not just during, construction. Mr. Smailey's lawyer neatly explained that Mr. Smailey was wearing his "fee as developer hat" only as long as this project was being built. The implication being that once that role was over that was the end of Mr. Smailey's role. But neatly left out that Mr. Smailey would then revert to his "property manager hat" with an ongoing interest in this development. And he he would be the one to enforce the lease against his son, definitely a conflict of interest, even if technically the lease is between his son and the owners.
So, tell me 5 Coats, why would we want to trade a 25,000 square foot, 2 story development, for a 60,000 square foot building, that will presumably remain for it's lifetime, on the off chance we might have a grocery store that might evolve into a glorified sandwich shop, or just quietly go out of business after a few years, possibly becoming a more profitable restaurant. If the developer can't meet the terms, the ones he proposed, then the property should revert to the original zoning.