News

Editorial: Replacing JJ&F in Palo Alto

Developer has not met threshold for proceeding with project

The developer of a long-delayed mixed-use project on the site of the former JJ&F Market is asking the city to approve his son as the owner-operator of the required replacement grocery store and allow construction to begin.

The Palo Alto City Council will decide Monday night whether that arrangement meets the requirements of the special deal it struck with the developer in 2009, when the council approved a much larger development than the zoning allows in exchange for the preservation of the popular JJ&F or a successor neighborhood market.

It is yet another example of the problems that arise under Palo Alto's so-called planned community (PC) zoning process, which grants zoning exceptions in exchange for "public benefits."

The developer, Patrick Smailey, received city approval for the project in exchange for agreeing to include an 8,000-square-foot space for JJ&F. The bulk of the site, however, will be 40,000 square feet of commercial offices, plus eight units of "affordable" housing. The space for JJ&F was guaranteed through a signed 30-year, subsidized lease agreement between Smailey and the Garcia family, who had owned the market for more than six decades.

Smailey was able to win council approval of the project by leveraging the loyalties of long-time College Terrace customers of JJ&F for the well-liked Garcia family. Without their support, the project would not have won approval.

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The development agreement stipulated that if the grocery tenant was other than the Garcias, the operator would be subject to the city's approval, which "shall not be withheld unless the City reasonably finds that such proposed grocery tenant is not likely to be comparable in quality of products and service as JJ&F as it existed and operated on December 7, 2009."

As some had feared at the time, within a year of the project being approved, the Garcia family decided to sell the market to a Redwood City grocer, who struggled to keep the deteriorating store viable during the last two years. The market closed for good last September in preparation for the demolition of the site. With the Garcias and venerable JJ&F out of the picture, the trade-off of more commercial development for an unknown market now doesn't seem nearly as appealing.

Having finally obtained financing and demolished the site, Smailey's company is now seeking a building permit. But instead of finding an established grocery operator to run the market, Smailey's son James has formed a company, J&A Family Market, which proposes to operate the grocery store under a lease with his father substantially the same as the lease signed with the Garcias.

The Smaileys refused to divulge to the city detailed information on the market's financial and business plans, arguing it is proprietary. So the city engaged a consultant with grocery industry experience to confidentially review detailed information from the developer. Based on its review, the consultant has told the city it believes the plan is as solid as any small grocery store plan can be in today's grocery environment.

This process has inappropriately carved out the public and the city staff from any meaningful review of the ability of the proposed market to actually meet the requirements imposed as part of the project's approval. It delegates analysis of key data, such as the adequacy of the team James Smailey will rely on to operate the market and the financial capabilities of the operation, to an industry consultant.

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That is not good enough.

Smailey opted for and assumed the risks associated with offering a public benefit for the right to build a much larger office project than allowed under the zoning. Indeed, the public will be stunned when they see the size of this building rise from the site, and the council's decision to grant this special zoning will be roundly second-guessed.

While the city can't renege on the basic development agreement, it can insist on public review of the details needed to determine if the proposed market will indeed be viable and comparable to JJ&F.

Once a building permit is issued the city will lose what little leverage it has, as there is no remedy if the market fails other than fines against the developer for code violations.

We have no choice but to hold our nose over this already approved PC project, but we should insist on a real public review of the promised and required grocery operation. The idea of allowing a consultant with no accountability to the public to conduct the city's review is a bad precedent and should be rejected.

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Editorial: Replacing JJ&F in Palo Alto

Developer has not met threshold for proceeding with project

by / Palo Alto Weekly

Uploaded: Fri, Aug 8, 2014, 8:14 am

The developer of a long-delayed mixed-use project on the site of the former JJ&F Market is asking the city to approve his son as the owner-operator of the required replacement grocery store and allow construction to begin.

The Palo Alto City Council will decide Monday night whether that arrangement meets the requirements of the special deal it struck with the developer in 2009, when the council approved a much larger development than the zoning allows in exchange for the preservation of the popular JJ&F or a successor neighborhood market.

It is yet another example of the problems that arise under Palo Alto's so-called planned community (PC) zoning process, which grants zoning exceptions in exchange for "public benefits."

The developer, Patrick Smailey, received city approval for the project in exchange for agreeing to include an 8,000-square-foot space for JJ&F. The bulk of the site, however, will be 40,000 square feet of commercial offices, plus eight units of "affordable" housing. The space for JJ&F was guaranteed through a signed 30-year, subsidized lease agreement between Smailey and the Garcia family, who had owned the market for more than six decades.

Smailey was able to win council approval of the project by leveraging the loyalties of long-time College Terrace customers of JJ&F for the well-liked Garcia family. Without their support, the project would not have won approval.

The development agreement stipulated that if the grocery tenant was other than the Garcias, the operator would be subject to the city's approval, which "shall not be withheld unless the City reasonably finds that such proposed grocery tenant is not likely to be comparable in quality of products and service as JJ&F as it existed and operated on December 7, 2009."

As some had feared at the time, within a year of the project being approved, the Garcia family decided to sell the market to a Redwood City grocer, who struggled to keep the deteriorating store viable during the last two years. The market closed for good last September in preparation for the demolition of the site. With the Garcias and venerable JJ&F out of the picture, the trade-off of more commercial development for an unknown market now doesn't seem nearly as appealing.

Having finally obtained financing and demolished the site, Smailey's company is now seeking a building permit. But instead of finding an established grocery operator to run the market, Smailey's son James has formed a company, J&A Family Market, which proposes to operate the grocery store under a lease with his father substantially the same as the lease signed with the Garcias.

The Smaileys refused to divulge to the city detailed information on the market's financial and business plans, arguing it is proprietary. So the city engaged a consultant with grocery industry experience to confidentially review detailed information from the developer. Based on its review, the consultant has told the city it believes the plan is as solid as any small grocery store plan can be in today's grocery environment.

This process has inappropriately carved out the public and the city staff from any meaningful review of the ability of the proposed market to actually meet the requirements imposed as part of the project's approval. It delegates analysis of key data, such as the adequacy of the team James Smailey will rely on to operate the market and the financial capabilities of the operation, to an industry consultant.

That is not good enough.

Smailey opted for and assumed the risks associated with offering a public benefit for the right to build a much larger office project than allowed under the zoning. Indeed, the public will be stunned when they see the size of this building rise from the site, and the council's decision to grant this special zoning will be roundly second-guessed.

While the city can't renege on the basic development agreement, it can insist on public review of the details needed to determine if the proposed market will indeed be viable and comparable to JJ&F.

Once a building permit is issued the city will lose what little leverage it has, as there is no remedy if the market fails other than fines against the developer for code violations.

We have no choice but to hold our nose over this already approved PC project, but we should insist on a real public review of the promised and required grocery operation. The idea of allowing a consultant with no accountability to the public to conduct the city's review is a bad precedent and should be rejected.

Comments

Resident
Another Palo Alto neighborhood
on Aug 8, 2014 at 9:01 am
Resident, Another Palo Alto neighborhood
on Aug 8, 2014 at 9:01 am
Like this comment

What this town needs is a decent sized grocery. Midtown Safeway is a joke, often runs out of basics by mid afternoon and is continually changing its range due to lack of space. The parking lot is often full at busy times.

I know we have big Safeway in Menlo and Mountain View, but in all honesty the drive to get there means big time driving time.

If we could have one decent sized store at an easy to get to location (is there such a thing in Palo Alto) it would really help. All these small boutique stores are fine for a couple of items, but for weekly family grocery shopping they do not work.


Barron Park dad
Barron Park
on Aug 8, 2014 at 9:05 am
Barron Park dad, Barron Park
on Aug 8, 2014 at 9:05 am
Like this comment

Completely agree with this editorial. The city will have absolutely no remedies if the planned grocer fails. Therefore the people need some sunshine on whether the proposal market is viable. Otherwise, the city will have given away a PC benefit for a massive building without getting anything in return.


Barron Park dad
Barron Park
on Aug 8, 2014 at 9:09 am
Barron Park dad, Barron Park
on Aug 8, 2014 at 9:09 am
Like this comment

Also, does anyone else feel like they were being mislead in the original 2009 campaign to pass the zoning exemption? The Garcia's sold JJ&F within months of getting the City Council approval.

"Smailey was able to win council approval of the project by leveraging the loyalties of long-time College Terrace customers of JJ&F for the well-liked Garcia family. Without their support, the project would not have won approval."


randy albin
Mountain View
on Aug 8, 2014 at 9:15 am
randy albin, Mountain View
on Aug 8, 2014 at 9:15 am
Like this comment

this was a pretty good store. it's really close to el camino so that makes a location consideration. why close this store? palo alto is too damn expensive


Dennis Anderson
another community
on Aug 8, 2014 at 10:16 am
Dennis Anderson, another community
on Aug 8, 2014 at 10:16 am
Like this comment

What is the street address please? Am I missing this basic information in the story?


Another betrayal
College Terrace
on Aug 8, 2014 at 10:39 am
Another betrayal, College Terrace
on Aug 8, 2014 at 10:39 am
Like this comment

Yet another betrayal by a developer. And by the Garcia family.
JJ&F customers were shedding tears before the City Council for the Garcia grocers. The Garcias seemed so sincere. For shame. Pants on fire.


allen edwards
Old Palo Alto
on Aug 8, 2014 at 11:09 am
allen edwards, Old Palo Alto
on Aug 8, 2014 at 11:09 am
Like this comment

There will be no community benefit as the growsery will fail. That is probably what the business plan says and why it will not be revealed. We need to repeal the community benefit law.


Midtown
Midtown
on Aug 8, 2014 at 11:15 am
Midtown, Midtown
on Aug 8, 2014 at 11:15 am
Like this comment

Exactly the reason PC projects should never see the light of day again! Hoodwinked yet again by a developer.


Annette
Registered user
College Terrace
on Aug 8, 2014 at 11:21 am
Annette, College Terrace
Registered user
on Aug 8, 2014 at 11:21 am
Like this comment

I second "Baron Park dad" and the editorial. As to comments by "Another betrayal", the Garcias were bound by a confidentiality agreement. Any betrayal here was perpetrated by the developer and those who helped the process along, not the Garcias. I will not be in the last surprised if more of the same is yet to come.

There has been one unanticipated (by me, anyway) silver lining: it's been nice to see all the openness and light at the corner, even if it is just a temporary pleasure.


Annette
Registered user
College Terrace
on Aug 8, 2014 at 11:24 am
Annette, College Terrace
Registered user
on Aug 8, 2014 at 11:24 am
Like this comment

Correction: make that "not in the least surprised . . ."


Debbie
Old Palo Alto
on Aug 8, 2014 at 11:31 am
Debbie, Old Palo Alto
on Aug 8, 2014 at 11:31 am
Like this comment

The Palo Alto City Council, City Manager Keene and the totally inept "staff," have again let down the citizens of Palo Alto. What will it take to fire the City Manager and the Director of Planning? They are allowing this town to be destroyed. Hopefully the citizens of Palo Alto will throw out the current city council members when they come up for re election in November.
Did anyone watch last Monday nights city council meeting? Councilman Schmidt was the only voice of reason. My hat is off to him for his wisdom. Mayor Sheppard was totally lost and had no idea how to handle the complicated problems discussed at the meeting.


Craig Laughton
College Terrace
on Aug 8, 2014 at 12:09 pm
Craig Laughton, College Terrace
on Aug 8, 2014 at 12:09 pm
Like this comment

"plus eight units of "affordable" housing". There is no such thing as affordable housing in PA (unless you have the ability to pay market values). It would be more honest to at least call it "subsidized housing". The weekly editorial fails to mention how the subsidized housing activists pressured the CC to approve this plan, because they got some subsidized units mandated. BTW, it was necessary to give up a public plaza in order to build the eight BMR units. The public plaza was included in the original renderings shown in the JJ&F store...then it was removed, due to pressure from the subsidized housing crew. Bait and switch....

I shopped at JJ&F, until the end. I liked the convenience and friendliness. However, I did not think it was worth breaking the zoning rules to preserve it. Now, I shop at Molly Stone.

In the end, the entire project was a 'horse designed by committee is a camel' product. This is the cost of denying market pressures, and demanding boutique designs.

I also agree with Annette that it is nice to get that entire block scraped off. It was a real eyesore.


Yona
Fairmeadow
on Aug 8, 2014 at 12:51 pm
Yona, Fairmeadow
on Aug 8, 2014 at 12:51 pm
Like this comment

Is this going to be another Alma Plaza joke of a grocery store?


Wendy
another community
on Aug 8, 2014 at 3:27 pm
Wendy, another community
on Aug 8, 2014 at 3:27 pm
Like this comment

At the time of this fight I was living around the corner from the project site and was one of the few who spoke out against the project. The developer never really wanted the grocery store - they tried to give us a "Community Meeting Room" as the public benefit to get their density request approved. I loved JJ&F but they were struggling before this all happened. They couldn't get the landlord - Smailey - to do any upgrades, roof fixes, floor plan changes to make the store more workable. Smailey claimed that the new project would fix all that. And then they beat the pavement to get JJ&F supporters to come out and cry for the grocery store to stay saying how wonderful it would be for the City to allow the increase in density if it kept the beloved grocery store. "What will we do without JJ&F?" was the battle cry. Well, what the heck were you going to do for the 6 to 9 months the grocery would be closed for construction? As soon as the approval went through people stopped shopping at JJ&F - the bottom dropped out - all the "supporters" found other places to shop (Trader Joe's?) and the Garcia Brothers had no choice but to close and sell - but the new owner found the same thing. No repairs to the leaking roof sections, no upkeep of the building in general and no shoppers. I never did trust the Smailey's and I don't trust them now to not come back to the City after the grocery is in, up and running and then failing, crying to the council and planning that there is no way a grocery can make it there and ask for dispensation to let them do something else - a convenience store? A chain of some sort? Or how about more office space? And the neighborhood is then stuck with a project that is way out of scale and of no public benefit to the community/neighborhood in any way.


neighbor
another community
on Aug 8, 2014 at 5:05 pm
neighbor, another community
on Aug 8, 2014 at 5:05 pm
Like this comment

I just hope the new market is clean. JJ&F wasn't.


Anonymous
Another Palo Alto neighborhood
on Aug 8, 2014 at 6:33 pm
Anonymous, Another Palo Alto neighborhood
on Aug 8, 2014 at 6:33 pm
Like this comment

Is there a list somewhere of the "Public Benefits" Palo Alto was supposed to received through zoning changes?


common sense
Midtown
on Aug 8, 2014 at 7:43 pm
common sense, Midtown
on Aug 8, 2014 at 7:43 pm
Like this comment

Anonymous @ Another Palo Alto Neighborhood

Public Benefits List:

1) Campaign Contributions
2) Endorsements & Volunteer Support for Political Campaign
3) Removal of guilt by voting for BMR housing (of course not in any council member's neighborhood)
4) Increased property tax revenue from the improvements


jh
Registered user
Evergreen Park
on Aug 8, 2014 at 10:59 pm
jh, Evergreen Park
Registered user
on Aug 8, 2014 at 10:59 pm
Like this comment

5) Help professional colleagues out.

Hey, John Barton, an architect on the council at the time, refused to excuse himself from the discussion and vote, even though he had a professional relationship with the architect of the new building, Tony Carrasco, for whom Barton had done work in the past. And no doubt hoped this happen in the future again. A conflict of interest if ever there was one. As I recall, that was the swing vote that got this project approved.


jh
Registered user
Evergreen Park
on Aug 8, 2014 at 11:01 pm
jh, Evergreen Park
Registered user
on Aug 8, 2014 at 11:01 pm
Like this comment

At the time John Barton said this wasn't a conflict of interest and refused to excuse himself. Business as usual in Palo Alto.


ChrisC
Registered user
College Terrace
on Aug 8, 2014 at 11:50 pm
ChrisC, College Terrace
Registered user
on Aug 8, 2014 at 11:50 pm
Like this comment

To Neighbor: Again, JJ&F before Garcias sold it was spotless !! They were always cleaning the floors. It got dirty after the other folks took over. It would've been better if they'd changed the name at that time so people like you wouldn't confuse the JJ&F long-time college terrace residents loved and what came after. The people who have posted here about the duplicitous Garcias make me furious. The City held the permits up for years. By the time it went through, as someone said, the end was in sight for JJ&F. Trader Joes decimated the business .. the people who whined to City Hall evidently did not do the bulk of their shopping there. It did become a convenience store at that time, but before that many, many people did all their shopping there. Whoever was talking about "boutique" grocery stores .. JJ&F was not one of those. One of the last real butchering operations in Palo Alto. I was always amazed by their selection of things, and they would get you items you asked for. I did 90% of my shopping there before it was sold. Please, stop with the revisionist history about the Garcias and the store. Having said all that, I don't think there's any point putting in anything other than a 7-11 in that spot. The neighborhood isn't going to support it.


@puzzled
Midtown
on Aug 9, 2014 at 12:04 am
@puzzled, Midtown
on Aug 9, 2014 at 12:04 am
Like this comment

I don't understand why people become so emotional about this story. It is just a supermarket after all. Regardless of who runs the market, if it does not meet customer expectation, it automatically goes out of business. I personally like to see a descent bookstore in the location. There are already many supermarket options in the city.


Resident
Another Palo Alto neighborhood
on Aug 9, 2014 at 8:49 am
Resident, Another Palo Alto neighborhood
on Aug 9, 2014 at 8:49 am
Like this comment

In the days of the original JJ I would drive across town for their butcher department. They knew and understood meat and would prepare special cuts for me. Now it seems the new place doesn't value a good butcher and meat department.

We have dreadful meat departments in Palo Alto. Piazzas butchers know their meat but that is the only place in town.

I can't understand a supermarket that only has prepackaged meat and does well. Sometimes not even able to buy two packages of the same type for a family of 6.

Then again, perhaps Palo Altans don't cook from scratch any more. Sad really.


Sea-Seelam Reddy
College Terrace
on Aug 9, 2014 at 9:24 am
Sea-Seelam Reddy, College Terrace
on Aug 9, 2014 at 9:24 am
Like this comment

Please consider proven businesses some high end, some medium:

- Bristol Farms
- Safeway - small
- Dean and Deluca new to west coast?
- others?? (butcher shop) I saw one in Costa Mesa and I will have get the name; exclusively a butcher shop +

respectfully


Crescent Park Dad
Crescent Park
on Aug 9, 2014 at 5:31 pm
Crescent Park Dad, Crescent Park
on Aug 9, 2014 at 5:31 pm
Like this comment

@ SS Reddy - the square footage is too small for any established grocery chain. The space is more closely related to a small bodega type store that you will find on the corners in SF neighborhoods. The difference is that the owners of the PA space will not live in the back or upstairs.


Fred Balin
Registered user
College Terrace
on Aug 9, 2014 at 6:10 pm
Fred Balin, College Terrace
Registered user
on Aug 9, 2014 at 6:10 pm
Like this comment

As we move into Monday evening’s council discussion on the grocery requirements in this approved Planned Community (PC) and then Wednesday evening’s general discussion of PC reform at the Planning & Transportation Commission (P&TC), it is an optimal moment to reflect on some history.

The “JJ&F Block” (College Terrace Centre) PC application following on the path of the Alma Plaza PC are not only similar for the ransom of grocery-store retention to neighborhood commercial zone-busting, but for PC applicant manipulation of the system all the way through its individual processes.

Did/Does it have to be that way? No.

At the Planning Commission, applicants’ requests to initiate a zone change to PC for both Alma Plaza and College Terrace Centre were denied. But in each case the council overruled the P&TC’s denial and subsequently approved a PC the applicant wanted.

At the P&TC for Alma Plaza (April, 2007), the vote to deny was 5-1-1 (Holmam, Burt, Keller, Tuma and Garber voting to deny; Lippert, opposed; Sandas, absent).

But at the follow-on and pivotal city council meeting, marred by project changes placed at the council dais and therefore bypassing the public and staff, the vote was to approve the applicant’s PC, 5-4 (Barton, Morton, Beecham, Drekmeier, Kleinberg, voting to approve; Klein, Kishimoto, Beecham, Cordell, voting to deny).


For College Terrace Centre, two years later, the vote to deny at the P&TC was 6-1 (with Holman, Keller, Fineberg, Garber, Lippert, and Tuma voting to deny; Roatsi opposed).

But at the subsequent appeal to the city council, again preceded by late changes from the applicant, the council balance had swung further. The vote to approve the applicant’s PC was 7-1-1 (only Kishimoto opposed; Klein, fierce in a tighten-up of public benefit protections, and then joined by Burt in an unsuccessful effort to shave off a bit of the excess office, but both eventually voting in favor, and joined by others with seemingly no concerns – Barton, Morton, Drekmeier, Espinosa, and Yeh; with Schmid absent.

---

At the P&TC Commissioner Karen Holman’s accepted protocol over several years to keep commissioners away from private meetings on PCs, held for another 18 months after Eduardo Martinez was appointed to fill her vacated place on the P&TC, Arthur Keller barely squeaked by, 5-4, for reappointment.

But with the appointment of Greg Tanaka, the balance shifted. And, then most definitively, in 2012, via council majority decisions not to reappoint Susan Fineberg to her position on the commission or either of two other open slots on the commision, it signaled most clearly where the council majority was headed and where it saw the P&TC not going.

Since “Maybell Avenue,” of course, the prevailing winds have changed.

With College Terrace Centre veterans Klein, Burt, and Holman on the dais Monday, it is hard for me to imagine much tolerance for more developer surprises, such as his son as grocery tenant and a mystery grocery store manager.

Hopefully, some of those winds will arrive at Wednesday’s P&TC as well.


iconoclast
University South
on Aug 10, 2014 at 4:21 pm
iconoclast, University South
on Aug 10, 2014 at 4:21 pm
Like this comment

Smailey got all he wanted when his PC ordinance was approved without any provision for enforcement or penalty for failure to comply. (This, BTW, is universal in these civic giveaways.) Fronting his son as a grocer is simply his idea of a joke on the suckers.


Barron Park dad
Barron Park
on Aug 10, 2014 at 8:39 pm
Barron Park dad, Barron Park
on Aug 10, 2014 at 8:39 pm
Like this comment

Thank goodness for Fred Balin and his efforts to keep the record straight.

I sincerely plead that that the current Palo Alto City Council be extra sensitive to current community concerns about "public benefits" around PC exemptions, and apply a higher standard to scrutiny of promised benefits.

We don't want to be bamboozled again. Simply put, please put some tough scrutiny and teeth into whether promised PC benefits will actually come to permanent realization for the Palo Alto community, or whether a lot of these promises are simply a smoke screen that won't last. Please take a firm stand on the JJ&F development.


iconoclast
University South
on Aug 10, 2014 at 9:27 pm
iconoclast, University South
on Aug 10, 2014 at 9:27 pm
Like this comment

"We don't want to be bamboozled again"

It's worse than being bamboozled. City Hall tends to be eager to be bamboozled.

Why?


Ben
Crescent Park
on Aug 10, 2014 at 10:13 pm
Ben, Crescent Park
on Aug 10, 2014 at 10:13 pm
Like this comment

Another Planned Community bares all to the residents of Palo Alto. The developer Plans to extract as much profit at the expense of the Community, just like every other PC approved by City Council, correct me if I am wrong there. Naturally, City Council and Staff can't see the fire through all the smoke, and uh, oh yeah, the building IS the benefit.

Another PC blunder brought to you by the city of Palo Alto.

Besides forming the paper company J&A Family Market, does James Smailey have any experience operating a grocery store, not counting being a customer in one?


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