Publication Date: Friday, May 28, 2004
Albertsons leaving south Palo Alto?
Albertsons leaving south Palo Alto?
(May 28, 2004) Entire Alma Plaza shopping center could be sold, city officials said
by Jocelyn Dong
Albertsons may close its grocery store at Alma Plaza in south Palo Alto and sell the entire 5.6-acre shopping center, city officials said this week.
Mayor Bern Beecham, who met last week with representatives from the grocery chain, didn't hold out hope that Albertson's would remain.
"I'm not optimistic at all," he said. Beecham and Ron Henry, Albertsons real estate manager, discussed the financial health of the company's stores at Alma and Edgewood plazas.
"The numbers are not working out so well for Alma. The numbers are more optimistic for Edgewood," Beecham reported Henry saying.
If the Alma store closes and Edgewood stays open, the decision would represent a surprising reversal in Albertsons' attitude.
For years, the grocery chain has been waging a battle to expand the 17,200-square-foot food outlet at Alma and renovate the shopping center.
Meanwhile, the fate of the Edgewood Plaza grocery looked dubious, especially after city staff held up Edgewood as an example of the city's "blight" and created a redevelopment agency to deal with the issue.
Residents have also expected Albertsons to ax its Edgewood location because Alma is located in a more central area of Palo Alto.
Henry did not return a call for comment, but an Albertsons spokesperson denied a decision had been made regarding the Alma store.
"We're still in the evaluation stage," said spokesperson Quyen Ha.
However, John McNellis, Albertsons' developer for Alma Plaza, reportedly asked the city a few weeks ago to put the project on hold indefinitely.
A 1999 survey of supermarkets in Mountain View, Palo Alto and Menlo Park, conducted by retail consultant Thompson Associates confirmed a history of declining sales at Alma. The store ranked near the bottom -- 14 out of 16 -- in sales per square foot.
The shopping center's revenue as a whole had slumped 61 percent from 1989 to 1999. Today, six food and service outlets ply their trades at Alma, while seven stores sit vacant.
In spite of the center's struggles, neighbors have contested Albertsons' expansion, citing anticipated traffic and parking problems. In 1997, the grocery chain proposed tripling its store size to 50,000 square feet, a proposition that eventually got scaled back to 29,000 square feet.
In addition, it planned to rebuild the center's retail area, adding low-income apartments above the stores, and five single-family homes.
By last year, Albertsons had received the blessing of all city commissions except the City Council, but then found itself immersed in the city's nine-month moratorium for all construction projects affecting the Charleston-Arastradero corridor.
After the moratorium was lifted, Albertsons asked for a delay in going before council. Then came the request for an indefinite hold.
"He didn't give a date to reactivate," Lisa Grote, Palo Alto's chief planning official, said of McNellis.
Beecham expressed concern over the possibility that Albertsons would leave, and drew a parallel to the Hyatt Hotels, which recently decided not to rebuild its hotel on El Camino Real.
"It's similar to Hyatt. We had a willing developer, but as time goes by they're no longer willing to go ahead," he said.
Albertsons' departure would leave a hole in neighborhood grocery shopping for that area of town, unless it were replaced. Barron Park lost its neighborhood food store, the All American Market, in 1997. Piazza's Fine Foods still operates at Charleston Shopping Center.
The Alma Plaza land value is at least $8.6 million, according to county records.
A final decision may be made by June, according to Menlo Park developer Tim Kelly, who has been talking with Albertsons about its Edgewood store. Kelly indicated Albertsons is looking to extend its lease at Edgewood Plaza, but hasn't made a commitment yet. Any decision at Edgewood would follow one at Alma, he said.
Kelly seemed surprised that Albertsons would be leaving Alma, saying, "I don't think that's the case."
Meanwhile, Alma developer McNellis directed the media to contact Albertsons directly.
Senior staff writer Jocelyn Dong can be reached at jdong@paweekly.com.
E-mail a friend a link to this story. | 
