by Don Kazak
The Palo Alto Co-op has decided to explore whether financing would be available to build a grocery store in East Palo Alto. Such a move, if it occurs, would be very welcome in East Palo Alto, which does not have a full-sized grocery store and has been trying to attract one to the area.
For the last month or so, the Co-op has been quietly exploring the feasibility of building a store at the Four Corners redevelopment site at University Avenue and Bay Road. The Co-op board of directors voted last week to direct its staff to find out if reasonable financing is available.
Harry Waters, the Co-op board president, said the board isn't ready yet to give any details about its East Palo Alto interests. "We're not prepared to make any public statement," Water said. "It's far too preliminary at this stage."
But others, including the developer working on the Four Corners projects and East Palo Alto officials, confirm the interest from the Co-op.
The Co-op has been talking with East Palo Alto officials for some time, said one city official.
Eric Willis, the city's consultant on the project, tried to woo Lucky Stores to the site. But Lucky decided back in April that East Palo Alto wasn't large enough to support a 50,000-square-foot store, the smallest that either Lucky or Safeway, the state's two largest chains, are willing to build these days.
Willis said the city's hopes are now on a smaller store of about 30,000 square feet. That would still be far bigger than any existing Palo Alto grocery store and almost as large as the 40,000-square-foot Safeway on El Camino Real in Menlo Park.
Willis said he is now talking to two grocery store companies, including the Palo Alto Co-op.
"I'm encouraged," Willis said. "It's always nice to have any grocery store interested."
Ironically, if the Palo Alto Co-op did decide to build a store in East Palo Alto it would be returning to a site that holds some bad memories for the Co-op.
The Four Corners property used to house the Nairobi Village Shopping Center in the 1970s and, for less than a year, a Palo Alto Co-op Market. The Co-op quickly pulled out of East Palo Alto because it was losing money there.
The Co-op, founded in 1935, which at its height had stores in Sunnyvale, Mountain View and Menlo Park, as well as two in Palo Alto, is now down to one store on Middlefield Road.
"They need to find out if they can afford it and if their members will support it," Willis said of the Co-op. "They need to go through that process, with specific steps to go through."
Unlike a large grocery chain making a business decision, the Co-op would need to get support from its members to make the East Palo Alto venture work, and would also have to generate public support in East Palo Alto.
East Palo Alto has changed significantly since the 1970s. The city was incorporated in 1983, and its first major redevelopment project, the Gateway 101 project near the freeway, is close to beginning construction.
City officials hope the Gateway project will trigger an economic rejuvenation of the community, including development of the Four Corners site.
At the same time, however, a cloud is hanging over the city with the decision by a San Mateo County judge last week to rule that the city's excise tax is illegal and actually a property tax.
In addition to losing $900,000 a year in revenues from the tax, the city could be liable to pay property owners more than $5 million in tax refunds.
@jumphead:Co-op eyes East Palo Alto site
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