Bucking the trend of many other mom-and-pop businesses owners who've left town due to rising rents, Steve Stivala, owner of the House of Bagels, has found a neighborhood niche where his small business is thriving.

Stivala, who has owned his bagelry for 27 years, moved it from University Avenue to Edgewood Plaza Shopping Center on Embarcadero Road in late January. Now his eatery is a hub where neighbors gather.

"When I started looking at it a year ago, I thought, 'No way I'm going in there. This is not going to work,'" he said, noting the then-half-finished buildings and tucked-back feel of the shopping center. But when Starbucks announced it would move into the center, he had a change of heart. If the chain was willing to give it a go, perhaps he would have a chance there too, he said.

With a sign newly stenciled on the windows and tables filled with happily munching, chatting customers, House of Bagels and the once-decrepit shopping center have started a new life together.

"I think it's working," Stivala said, smiling. The community has been "overwhelmingly supportive," he added, with the place filling up on weekends.

Once a no-man's land of crumbling buildings that eventually closed completely after the anchor Albertsons supermarket shut down in 2006, Edgewood's parking lot is now filled. Located between Embarcadero and Channing Avenue, on the city's eastern edge, the center sports a Fresh Market grocery store, Starbucks, a dry cleaner, Supercuts hair salon, Elements massage center, Chase Bank and Orangetheory fitness center in addition to House of Bagels, and there are more stores to come as the renovation is completed. The historically significant structures built by developer Joseph Eichler now have been replaced or rebuilt with an updated-yet-retro look.

Patrons said they are pleased with the results.

"For more than 10 years, I was watching the rat-infested buildings fall apart," Wendy Sinton said on Wednesday morning while enjoying an egg-and-cheese bagel.

"It's got everything now," her friend Lee Zulman added. "It's a great place for neighborhood gathering."

Stivala wants the center to become even more vibrant. He's hoping to start weekly barbecues in the adjacent plaza during the spring and summer to encourage locals to walk to the center, he said.

"It's such a beautiful place," he said of the outdoor plaza outside his door. "The parents can feel comfortable coming in and know that their children have a place to go to. It's relatively safe, and people can bring their dogs."

Neighborhood resident Linda Henigin is also enthusiastic. The revitalized center "has made the biggest difference" in the neighborhood, she said, noting that she sees people walking and biking there all the time now.

A mother of two young children, Henigin often runs into people she knows and plans to meet other families there, she said. The bagelry is a destination for young families after school, she added.

Henigin said she would welcome the barbecues.

"It would be like when we had the food trucks," she said, referring to the popular Edgewood Eats events started by Crescent Park resident Susie Hwang that brought crowds to the center as a way to keep the center alive before the renovations began.

Zulman said Edgewood is attractive because it captures a part of Palo Alto that people yearn for but that seems to be rapidly slipping away.

"There's very little of Palo Alto left in Palo Alto where everybody knows your name. It's a place where people truly can connect without pretension," she said.

Randy and Judy Cook have made Edgewood their destination, traveling from their Midtown home to the Edgewood Starbucks for morning coffee and newspaper reading.

"It's our Starbucks," Judy said, as their dog, who gets the steamed-milk foam from their beverages, enjoyed lazing in a sunbeam beneath their outdoor table.

"They've done a wonderful job with the shopping center. It was dead, now it's vital," Randy said.

Some critics said early on that Edgewood's distance from Embarcadero would doom it. But Stivala said the setback is an asset. The center has accessible and visible parking, unlike at Alma Village, which is home to a Grocery Outlet store. There, the buildings jut out against the sidewalk and create an unwelcoming wall, he said.

"When you drive down Alma Street, you blink your eye and you're past that center," he added.

If Henigin has any quibble, it's with the concrete plaza. It is popular with kids on scooters and skateboarders, but she was expecting a patch of grass, she said.

"It's not clear what the public-private split is," she added.

Henigin would like to understand what community uses might be allowed there. Thinking of her children, she envisioned at least one activity that would add to the neighborhood ambiance: "If we could have lemonade stands, people would come in the summer," she said.