Fed up with the lack of a grocery store at Palo Alto's Edgewood Plaza Shopping Center (at 2080 Channing Ave.), residents are mobilizing to put pressure on the City Council to fine the developer for not finding an operator to replace Fresh Market, which closed on March 31.
More than 70 residents met on Thursday, Aug. 20, to plan strategies for convincing the council to fine developer, Sand Hill Property Company, for violating the terms of its "planned community" ordinance.
Sand Hill will be out of compliance with the ordinance if it does not have a grocery store within six months, said Jeff Levinsky, one of the residents leading the campaign. He and other organizers encouraged the residents to arrive en masse on Monday to urge the council to take action.
Sand Hill received the planned community zoning change, which allowed it to build housing on the commercial property and renovate the historic Eichler commercial center, in exchange for certain "public benefits," including maintaining a full-service grocery store. Fresh Market, a high-end grocer, opened to much fanfare in June 2013, but the East Coast-based company chose to close all of its California stores in order to concentrate on its expansion in the East and Midwest.
Since then, Sand Hill has said it has contacted numerous grocers but cannot find any takers to assume the Fresh Market lease. But residents aren't buying it.
Sand Hill still gets paid by Fresh Market, which holds a 10-year lease on the building, even if the grocery store is not operational. Levinsky said that John Tze of Sand Hill has indicated the current rent is $1.65 per square foot ($34,000 a month).
Residents say a penalty would perhaps motivate the developer to try harder or reduce the monthly lease payments as an incentive. But the situation could be complicated if Fresh Market chooses to hold the lease and sublet at the current rate or higher, the residents noted. Tze has said Fresh Market is asking $56,000 a month from new tenants, Levinsky said.
Edgewood does not have a specific penalty in its planned community ordinance, but the city could require a $500-a-day payment as a zoning violation, Mayor Karen Holman wrote in a letter to the residents, which Levinsky read at the meeting.
The council could choose to modify the ordinance. College Terrace Centre, a recently approved planned community development at 2180 El Camino Real that has as its public benefit a full-service grocery store, faces a $2,000-a-day penalty if the grocery store is vacant for more than six months every five years, Holman said.
Residents said the city should scale the penalty to the size of the grocery store. To make the penalty comparable to that of College Terrace, the Edgewood fine would be about $5,000 a day, they said.
Addressing a rumor that Sand Hill is considering a Target Express for the grocery-store site, Holman said that any proposal that is not clearly a grocery store would not satisfy the ordinance.
If the city does not lean on the developer, residents have another alternative, Levinsky said. Those who live in the neighboring Eichler housing tract could vote to amend the Covenants, Conditions and Restrictions (CC&Rs), which govern what can be done with properties within the tract. The CC&Rs can be amended to put additional conditions on the site.
The commercial sites also get to vote, Levinsky said.
"It may well be the salvation to keeping a grocery store there," Levinsky said.
The City of Palo Alto has a dedicated webpage, www.cityofpaloalto.org/edgewood, where staff will post latest information on the shopping center. The site also has a form for the community to sign up to receive email updates. So far, the city has had about 125 plus sign ups, spokewoman Claudia Keith said.