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Whole Foods to buy Wild Oats

Original post made by James, Duveneck/St. Francis, on Feb 21, 2007

How will this affect the possibility of a Wild Oats being located in the old Albertsons site on Embarcadero? Would Whole Foods put a Wild Oats there or would it give up the space for a true competitor?

Comments (30)

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Posted by Grocery Fan
a resident of Midtown
on Feb 22, 2007 at 8:44 am

I would love to say a nice brand new fancy Safeway. I love Whole Foods, but I can't afford to do my weekly shopping there.


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Posted by Not so fast
a resident of Duveneck/St. Francis
on Feb 22, 2007 at 8:48 am

Not so fast on putting anything at Edgewood Plaza. First of all some people want the structures preserved as they are, since they were designed by Eichler ( a virtual god in Palo Alto). Then there is the issue of traffic, environmental impact reports, the historic board needsto review the site etc. Look at it this way, it has been over 10 years and Alma Plaza has not had anything done to it--do you think Palo Alto is going to rush and deal with the Edgewood Plaza issue? Not with our City Council.


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Posted by Paul Losch
a resident of Community Center
on Feb 22, 2007 at 10:57 am

2 comments, one about Wild Oats/Whole Foods and another about Edgewood.

The company I own and run has Whole Foods as a major customer, and the products are for sale at the stores here locally. (This is not a commercial message, so I will refrain from promoting them further.)
My experience in dealing with them tells me that they will likely not consider Edgewood at all, and even if they do, it is at least 2-3 years before it would even get on the radar screen. I could elaborate, but in the interest of brevity, I think the simple message is forget Wild Oats or Whole Foods as an anchor tenant at Edgewood.

My opinion about Edgewood is that a key objective for what happens to it must be that it be attractive to several prospective anchor tenants, and design plans should reflect such an objective. It is unhealthy for any retail center to pin its hopes on a specific store or retailer to be carry it, especially at the design stage. What has happened with Wild Oats and Whole Foods points out how risky such an approach can be.


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Posted by Sanford Forte
a resident of College Terrace
on Feb 22, 2007 at 12:05 pm

Whole Foods made the Wild Oats buy as a defensive move in the market - as WalMart, Safeway, Trader Joe's, etc. have begun to carry more organic products. Whole Foods will likely close some Wild Oats locations, but keep most of them running in place as they convert to the Whole Foods moniker. There's a lot in the financial press about this.
Web Link

Web Link

btw, the demand for organic produce is really heating up - expect price rises, and imports from China, etc., where organic standards are not as high as they are here. Whole Foods and others already source some produce and other things from China.

Here's a transcript from the McNeil News hour, yesterday. It's quite interesting.
Web Link


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Posted by ric
a resident of Palo Alto Hills
on Feb 22, 2007 at 12:05 pm

Speaking on the Buyout of Wild Oats by Whole Foods, from a vendor's standpoint, I believe this is a rock solid decision. Our product is featured in both stores and from our experience the two companies have similar missions and core values. Both Wild Oats and Whole Foods have been supportive of our efforts to provide sustainable funding for marine conservation. I believe the synergies gained from this combination will create long-term value for employees, management, and most of all the consumer. Both companies support local vendors on a grand scale.

Ric
Whale Tails Tortilla Chips


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Posted by Paul Losch
a resident of Community Center
on Feb 22, 2007 at 12:39 pm

Ric,

Sootheze, my company, only does business with Whole Foods, so for us it looks very promising.

But, our experience with Whole Foods is that they run very lean above the store level, and when it comes to opening new stores, it becomes an "all hands on deck" exercise for the regional offices, and certain regular regional responsibilities, like reviewing and approving line extensions, get back burner attention for periods of time. For example, we at Sootheze have a couple new items for Easter, and some regions still haven't added them to their system, because the people from region are working on store openings, and are not at the office to handle such matters.

That is just a reality of the way they run their business, and as a vendor, we know that and manage accordingly. But, I do think this acquisition, unlike some others that they have done, is a much more formidable challenge for them, and will stretch their upper and middle management ranks quite a bit for quite a while.

Even though at the end of the day, the outcome will be good for the merged companies and the various stakeholders, this is a big swallow for WFM, and it is going to take some time for it to fully digest it.

What do you think, what has been your experience?


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Posted by NoAdsPlease
a resident of Stanford
on Feb 22, 2007 at 1:05 pm

Saying this is not a commercial message does not disguise it. That is exactly what it is.
I think the not so subtle advertisement is inappropriate and should be removed. Repeating the name of your company again and again. Being a commissioner does not excuse the sales pitch. It makes it more egregious.


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Posted by Another Voice
a resident of Community Center
on Feb 22, 2007 at 1:33 pm

Back to the actual question posed on this thread.
Sand Hill Partners is the developer for Edgewood. At their last community meeting they indicated that they'd recently wrapped up an option on the former Albertson's parcel in addition to the balance of the current retail area which they'd previously purchased. They conveyed that Wild Oats was their likely anchor tenant. Wild Oats has been adding smaller stores than is now the trend with Whole Foods. Consequently, this comparatively small center with its demgraphics fit within their expansion plans for Nor Cal.
That all seems to be up in the air now. It would be just speculation to try to guess what will happen next, but this acquisition of Wild Oats doesn't seem encouraging for those who hoped that they would be locating at Edgewood.
The Wild Oats issue is in addition to the complexity of the Edgewood redevopment posed by the fact that the commercial properties are effected by old CC&R's which the adjacent Eichler homeowners have which give them some approval rights over changes to the center that Sand Hill is proposing. Also, the entire commercial center has been divided among four different landowners with differnt intersts which has added to the complexity of redeveloping this land. The developer had not even submitted a preliminary proposal to the city prior to this change.
Unfortunately, the community will probably now have to step back and wait to find out from the developers what will happen next.


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Posted by KCM
a resident of Greenmeadow
on Feb 22, 2007 at 3:55 pm

Yes, it is unfortunate when the city lets the developers determine "what will happen next" and this is why. Developers have short term interests in the land use and will alter their plans to adjust to shifts in the market or buyouts among their prospective tenants. Property zoning change should be a slow process and led by the city's planning department.

Is it in Palo Alto's best long term interest to convert commercially zoned properties to residential zoning and subdivide them? If so, the planners should propose the change and explain how it will improve the city over time, for instance: "more houses will bring in x amount of new property taxes, new schools for the new residents will be located "here" and "here", traffic won't be a problem because . . . . (we're going to provide free bus service to retail shopping in neighboring towns, maybe?), and Palo Alto really doesn't need any more commercial tax income because . . . ."


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Posted by Another Voice
a resident of Community Center
on Feb 22, 2007 at 4:58 pm

KCM,
I'm not sure what options you are envisioning that the city has other than awaiting a proposal from the developer. The city does have policies in its Comprehensive Plan for the redevelopment of neighborhood centers such as Edgewood. Those policies have encouraged mixed residential and retail uses in the centers as a way to incentivse revitalization and to create a more vibrant and pedestrian oriented center. The developer will need to address those policies as well as address the unusual privately held CC&R's of the neighboring residences.
Other than that, the city can't force private landowners to build and have the occupants we in the community would most desire. That is if we were able to agree what it is that we want. From the community meetings that have been held so far on the future of Edgewood, there's a wide range of opinions on what the community wants. If something is to happen, it seems that comprimises will be necessary and not everyone will be happy.


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Posted by KCM
a resident of Greenmeadow
on Feb 22, 2007 at 6:18 pm

According to the zoning map, both Alma Plaza and Edgewood have already been re-zoned as Planned Community zoning, so we're stuck with that - I should have checked that earlier. From the Municipal Code:

"The planned community district is particularly intended for unified, comprehensively planned developments which are of substantial public benefit"

So yes, now that this has been established, it is up to the developers. Back to my previous comment - what is the substantial public benefit of more housing than retail at these sites? It's no service to developers to expect them to spend time and money developing schemes that will have to be sold to the public as well as the city. My experience with developers is that they just want to know the parameters and they'll build to them. It (should be) the city's job to set the parameters.


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Posted by Another parent
a resident of Another Palo Alto neighborhood
on Feb 22, 2007 at 6:23 pm

And we will have to re-open another elementary school and maybe a middle and high school too just for the residents of this new proposed housing!!


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Posted by pat
a resident of Midtown
on Feb 22, 2007 at 10:20 pm

Given our experience with Alma Plaza and Rickey's, the discussions on what to do at Edgewood Plaza could go on 'till the cows come home. I'm not holding my breath.


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Posted by JustMe
a resident of Duveneck/St. Francis
on Feb 23, 2007 at 12:44 pm

I am growing more and more concerned about the path we are following in working with Sand Hill Properties on the Edgewood Plaza project. There are several different groups of people with several types of resources that can be brought to bear on the issue, and each group has its own agenda for what they want to happen. But these groups are not pulling together and are instead bickering about what they want Sand Hill to do instead of uniting to present Sand Hill with a united front and a concrete list of concerns. If this pace continues, I see the following happening:
1) Sand Hill Properties will deal with each group individually, according to how much of a threat that group presents to their plans. This is classic "divide and conquer" strategy, but without a united front it will be the only recourse they have.

2) Individual groups will eventually begin to tire, wish to move on, and compromise on their issues, handing Sand Hill Properties the ability to move forward with plans that may not be in our interest.

3) Many of the more serious concerns we have about project will become insoluble issues once the project is completed because the project was allowed to move forward without considering them. In the end, Sand Hill Properties will profit while out neighborhood suffers.
I think we can all agree that the worst thing that could happen to the Edgewood Plaza is nothing. It would become more blighted, we would not get the shops we desire, Sand Hill Properties will be in expensive limbo, and Palo Alto will be missing out on tax revenue. We all lose. We want to avoid this path.
The CC&Rs held by the Eichler owners are a major tool that can be wielded by our neighborhood if we can just get together and agree what to do with them. We need to be mutually supportive here, and some of us may have to compromise on what we want. If we continue to hold fast to our individual desires without compromise or concern for our neighbors issues, we are all going to lose.

I am not at all opposed to Sand Hill Properties making a profit on this project. Far from that, I am all in favor of them finding it to be a profitable venture so that they and other developers will continue to be interested in developing Palo Alto in a positive manner. Constructing an adversarial relationship with Sand Hill Properties will ultimately be counter-productive.

We need to work together, collect a comprehensive list of concerns to present to Sand Hill Properties, work WITH them, not against them, to find workable solutions, and use the CC&Rs only as a last-resort club if we find we and our concerns are being ignored. I learned long ago that when you present a problem, you should also try to present a solution. When you have a list of problems, try to work out a comprehensive solution. But please don't ignore or minimize the problems that Sand Hill Properties faces on this project, they need to be part of the solution. We need to first get our ducks in line, and then talk to Sand Hill Properties together.

In 1774, as the colonies began to assert themselves against Britain and the unfair taxation we were feeling, Britain tried clamping down first on Massachusetts, closing the Boston Harbor and its ports with both land-based troops and the Royal Navy. At this point, they expected the trade that would have belonged to Boston would instead go to one of the other colonies with suitable ports, and there were three other possibilities. Britain expected those other ports to gleefully accept the increased business and not worry about Boston. Had that happened, Britain's divide-and-conquer strategy would have worked, and the world would have a different shape today. Instead, all of the colonies closed ranks with Boston, sent food and supplies over the narrow land bridge that was available, and presented Britain with a united front, clearly unexpected. The rest is history. We, similarly, must present Sand Hill Properties with a united front, or they wear us down individually and do as they please.


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Posted by chris
a resident of University South
on Feb 26, 2007 at 12:23 pm

We would support an Asian market at the Edgewood site.


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Posted by Paul Losch
a resident of Community Center
on Feb 26, 2007 at 12:41 pm

A Smart and Final type store might be a possibility. I don't shop it myself, but my understanding is that they are oriented toward lower prices compared with a Wild Oats. Many people are commenting about how there is a need for more retailers with mainstream prices, and that may be a candidate.

BevMo actually would probably do well there also, but I have a funny feeling that is not something that would be considered appropriate for a neighborhood shopping center. It is a good retail company though, and the products they sell tend to be taxable. Maybe the old Volvo dealership site is a candidate for a BevMo.

I am just tossing out some ideas here, we need to have an expansive approach to who are possibilities, not pin our hopes on any one retail company.


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Posted by Anna
a resident of South of Midtown
on Feb 26, 2007 at 3:32 pm

Good thinking, Paul.

Think about something that is complimentary to the big box stuff across the freeway. What is is that we can offer at Edgewood that compliments those retailers, and would draw more shoppers to Palo Alto?

I agree that BevMo isn't the answer, but there are a host of big box and semi big box possibilities that come to mind. We've lost out on Bed and Bath, REI, Home Depot, Best Buy, Circuit City, Office Depot, etc., etc., etc. - what's left.

I'd love to see some more good ideas.


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Posted by Resident
a resident of Another Palo Alto neighborhood
on Feb 26, 2007 at 3:41 pm

How about Staples. There doesn't seem to be one anywhere around here and an office supply (school supply) store seems like a great idea.


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Posted by JustMe
a resident of Duveneck/St. Francis
on Feb 26, 2007 at 4:00 pm

JustMe is a registered user.

I am sorry, but I just don't see an office supply, hardware, or other non-food specialty store there. What we REALLY need is a place where we can get a gallon of milk, a loaf of bread, a chunk of cheese, and other groceries at. Albertsons failed to work only because it was run-down and did not catter to the neighborhood it was located in. The criminal element drawn by the liquor store was a major deterrent to going there to shop, (my father-in-law was robbed at gunpoint there,)as was the lack of foodstuffs we were interested in. Properly done, properly maintained, and properly safe, Albertsons could and should have made it.

I realize that the store going in there cannot have the square-footage required by a big do-everything supermarket, but it doesn't HAVE to. How much floorspace does Piaza's have? They are making it. I would be happy with a super-sized, buffed-out 7-11. Surround that with some nice small shops, provide a safe and pleasant environment for parking and shopping, and I am there for all my small trips. I can save the big trips for a bigger store.

Bed-Bath-and-Beyond worls best when surrounded by other specialty stores, I don't see it standing alone.


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Posted by KC Marcinik
a resident of Greenmeadow
on Feb 26, 2007 at 4:28 pm

Piazza's has 18,000 SF according to a PA Weekly article from 3/15/2002.


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Posted by JustMe
a resident of Duveneck/St. Francis
on Feb 26, 2007 at 4:37 pm

Is that all? That's, like, half the square-footage Sand Hill was talking about giving Wild Oats.

So, if Piaza's can be as successful as it is with 18K sq ft, why couldn't a market at Edgewood be successful with 20K to 35K sq ft?

Note that Piaza's hit the nail right on the head when they targeted the PA demographic. They knew how to appeal to our population and did not try to attract the EPA population. They know how to make small square-footage work, packing the shelves densely but not in a way that makes it hard to shop. They provide goods for your shelves as well as hot meals to go. The parking lot feels safe. It works, period. Why couldn't that model work at Edgewood?


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Posted by k
a resident of Duveneck/St. Francis
on Feb 26, 2007 at 4:39 pm

Something like Piazza's is a great idea - a big box or 7-11 definitely not - you aren't going to get decent design just basic function with those type of stores as well as traffic. What about Starbuck's or similar?


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Posted by JustMe
a resident of Duveneck/St. Francis
on Feb 26, 2007 at 5:03 pm

I want a Starbucks and a 31 Flavors in the small shop area. I want a bunch of bike racks out there protected from cars by solid posts in the ground. I want lots of outdoor seating for eating ice cream and drinking coffee. I want a small stage where local musicians can arrange to play folk songs and blues while we eat and sip. I want a DVD rental place with family-oriented movies. I want to go there on bikes with my kids on Saturday and bump into friends and neighbors and sit and chat.

I want toe spirit of Joe Eichler to come down and reassure people that this is all okay with him.


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Posted by Paul Losch
a resident of Community Center
on Feb 26, 2007 at 5:29 pm

The south mid-town shopping area where Piazza's is housed my provide some useful lessons on what the possibilities are retail-wise for Edgewood. I don't know what is comparable and what is not comparable amongst the two, but the overall personality of that center, and the mix of stores that have and have not done well there could help the community have a good starting point around what is possible for Edgewood.

Another one that may provide some instructive lessons is Rancho in Los Altos, on Foothill Expwy. Neither place may be spot on with what makes sense for Edgewood, but they may help get the abstraction out of some of the conversation with useful "case studies," just like some of us got in business school.


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Posted by Not so fast
a resident of Duveneck/St. Francis
on Feb 27, 2007 at 8:44 am

Piazza's is nice for fruits and vegetables, but their prices are high and due to their small size their shelves are lacking much choice. I do most of my grocery shopping in Mountain View.
Also how did Sand Hill promise Wild Oats more than 20000 square feet. Isn't their a rule in PA that no grocery can be bigger than that size?
As for shops in the rebuilt Edgewood, it is nice that people want coffee, ice cream and video stores, however the bottom line is that any prospective tenant will want to be able to turn a profit with a store at that location. Right now the place is a dump and if the aim is to keep the Eichler look (all bow down to Eichler in PA), I do not forsee much happening their for years to come. The best bet is to tear down the whole thing and build from scratch.


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Posted by KC Marcinik
a resident of Greenmeadow
on Feb 27, 2007 at 9:39 am

The Edgewood and Alma Plaza sites are zoned as "Planned Community" which means they are exempt from the 20,000. square foot store cap.


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Posted by JustMe
a resident of Duveneck/St. Francis
on Feb 27, 2007 at 10:57 am

I disagree that sticking with the Eichler design means sticking with a dump. I think much could be done to improve and spruce-up the existing market and remove the dumpiness. Paving, painting, and lighting the parking lot would go a LONG way. Painting the buildings, some minimal repairs, etc., and it would begin to look nice.

The real question is if that design and layout can be refurbished as profitably as a tear-down and rebuild. I think that there may be other layouts and designs that would be better than the current buildings. I am uncomfortable with shoehorning in as many residential units as possible. That property is not all that large in the first place, and placing row-houses there would cut into retail and parking space. Yeah, they would turn a good profit, but they sacrifice the retail aspect. I fear it would also prove a burden on the area providing schools and parking, and it may impact house values in the area. (Protect your equity!)

I would be MUCH more comfortable putting office space on top of the market than condos. Is there a market for office space in PA? Want your office near home? Is there another use that could be made of that space?

I wish to go on record that I am NOT opposed to Sand Hill Properties making a profit off this venture, far from it. I just don't want that profit to be at our expense. Any negative impact on our quality of life will have a negative effect on our equity. I want to protect the neighborhood from that.


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Posted by Not so fast
a resident of Duveneck/St. Francis
on Feb 27, 2007 at 11:15 am

How and who will determine if what happens to Edgewood Plaza will have a
"Any negative impact on our quality of life"???
Times, places and people change, I think it is a NIMBY attitude to claim that you do not want any change or claim that change will be a negative impact on our quality of life". There are no guarantees and sometimes you have to look at the big picture--what is good for the city and the region.
Of course if people are going to trot out the "negative impact on our quality of life" argument, together with the "too much traffic" argument then Edgewood Plaza is destined to suffer the same fate as Alma Plaza (and I think many neighbors are happy with that situation as it is). People want revenue and services in the city, they wantthe stores that will generate said revenue to pay for said services, they just do not want them in their neighborhood.


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Posted by JustMe
a resident of Duveneck/St. Francis
on Feb 27, 2007 at 11:32 am

Perhaps I should define a little of what I see as a ngative impact:
1) If nothing happens to that property, if it is allowed to deteriorate, attract homeless encampments, or just become blight, I would count that as a negative impact.
2) If we allow a bunch of housing in there without making allowances for educating the children that move there in the local schools, I would count that as a negative. That district is already overcrowded and children are being threatened with shifted to other schools across town. Many people move to this ares specifically so that they can get their kids into our schools, and that drives up real estate prices. If you tell them that they can move here but have to transport their kids across town to school every day, how will that impact the desirability of our neighborhood?
3) If the developers put in a plan that creates housing with inadaquate parking, we are going to see LOTS of cars parked on our streets in front of our houses. I would count that as a negative impact.
4) Some Eichler owners have stated that they want to make a tourist mecca for Eichler lovers across America, attracting people from all over to come and admire our fine Eichlers, with the Edgewood Plaza as the centerpiece. If that were possible, and it happened, we would have carloads and possibly busloads of people cruising our quiet neighborhoods pointing and taking pictures. Somehow, amusing as that sounds, I don't see that as a big plus for our quiet, family-oriented neighborhood. I don't want my children dodging that traffic on their bicycles.

We have a nice quiet neighborhood where people stroll at night with their dogs and feel safe, except right around Edgewood Plaza. I want to protect that. I htink we can develop that plaza and still protect our neighborhood. If I didn't think that, I would be asking PA to re-zone that whole property for single-family residential and build more Eichlers.


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Posted by eric
a resident of Mountain View
on Apr 15, 2007 at 3:54 pm

Piazzas has been in their current location for- what? 20 years? 30? Not a chance a non-niche grocery store would open there today. I dont think that Wild Oats is likely anymore forEdgewood (or Alma for that matter). Id look for Whold Foods to pull out of downtown, too-- Id bet that is there smallest location in the US (though I understand that it is profitable, it probably is cannibalizing Los Altos). Midtown Safeway is almost certainly on the chopping block, too-- anyone happen to know when their lease is up?


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