News

Yelp not moving into Palo Alto's College Terrace Centre

Long construction delays caused review-website firm to vacate lease at mixed-use development

Business-review company Yelp has decided not to move into the College Terrace Centre in Palo Alto after all, a Yelp spokesman said, citing construction delays.

The decision came in early 2015, according to spokesman Vince Sollitto.

"Yelp decided to expand in Chicago instead of the oft-delayed Palo Alto location and reached an agreement with the landlord to vacate the lease and make it available to another tenant," Sollitto wrote in an email. "Yelp has since expanded in Chicago."

Beyond that, Sollitto said, the "company has no further comment."

San Francisco-based business-review company Yelp announced plans in September 2014 to move into the College Terrace Centre, taking 38,000 square feet of office space at the 65,382-square-foot mixed-use, transit-oriented development at 2180 El Camino Real. The site includes 45,572 square feet of offices, more than 13,000 square feet of retail, eight affordable housing units and 227 parking spaces.

But while Yelp had signed a lease agreement, the company also had plans in Chicago. A month prior to signing its agreement at College Terrace, Yelp announced in August 2014 that it would open a 50,000-square-foot campus at the Merchandise Mart in Chicago, hiring up to 300 people, according to the company.

In March 2015, the company announced it was adding another 10,000 square feet and up to 100 more jobs to its Chicago operations, according to a statement by Chicago Mayor Rahm Emanuel.

The company partnered with Skills for Chicagoland's Future, a public-private partnership partially funded by the City of Chicago, to recruit qualified, underemployed job seekers.

In Palo Alto, Yelp had planned to hire local sales and engineering employees, Yelp spokeswoman Rachel Walker said in 2014.

Yelp's departure might be fortuitous for the developers, who did not return phone calls asking for comment on this article. In the booming real estate market, the developers were able to negotiate a new pre-lease agreement for an unknown sum with another company for the entire 45,572 square feet of office space, according to a press release by Greystone, a New York-based real estate lending, investment and advisory company that is a partner at College Terrace Centre.

Greystone announced its partnership with property owners, the Clara E. Chilcote Trust, on Jan. 15.

The office space "is 100 percent pre-leased to a nationally recognized credit tenant," Greystone announced.

Palo Alto developer Jim Baer, who leases a space to First Republic Bank at 2275 El Camino Real at Cambridge Avenue, said that to his knowledge the company plans to lease the College Terrace Centre for branch banking on the ground floor and the upper-floor for financial services and professional offices.

College Terrace Centre has been a long time coming. The project was mired in delays since its initial approval by the Palo Alto City Council in December 2009 and had trouble securing financing due to the recession.

The last major hiccup occurred on Dec. 1, 2014, when the council raised concerns about a plan by developer Twenty-One Hundred Ventures Inc. to bring in a member of its development team, James Smailey, as the lessee for the grocery store. Under its "planned-community" (PC) zoning ordinance for the project, the project is required to have a viable grocery store to replace the now-closed JJ&F Market, which was located on the site for 68 years.

Smailey did not have any experience as a grocer, although he said he planned to bring in grocers with experience to run the operation. The council extended the project's building permit, which would have expired that December, until early March 2015. Seven days later, Twenty-One Hundred Ventures Adventera proposed bringing former Alma Plaza grocer Miki Werness in as the grocer. The council approved Werness' participation on Dec. 15, 2014.

The College Terrace project, which is now under construction, is about 55 percent completed. It is scheduled to open in late summer, Greystone said.

Comments

20 people like this
Posted by anon
a resident of Evergreen Park
on Feb 3, 2016 at 8:46 am

Banks are not a permitted use on the ground floor in a CN Zone, the underlying zone at the site of College Terrace center CN; Neighborhood Commercial.

A Bank would require a CUP ( conditional use permit ) that is granted by staff behind closed doors with no public participation .

CN zone ground floor uses are defined in the code as follows:


(e) "Neighborhood-serving offices" are medical offices, professional offices, travel agencies, and insurance agencies that fit the definition of a neighborhood-serving use.
(f) A "Neighborhood Serving Use" is a use that primarily serves individual consumers and households, not businesses, is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also one to which a significant number of customers and clients travel, rather than the provider of the goods or services traveling off-site.
(g) "Ground Floor" shall mean the first floor that is above grade.

The project at 2100 El Camino Real is the last of the PC zoned developments allowed by developer friendly City Councils. The massive amount of office space will be a financial goldmine to the owners, with potential negative impacts to the neighborhood. WAZE an app that infamously provides shortcuts for drivers already directs traffic through the neighborhood from 280 by way of Hanover and williams and Yale streets.

A Grocery store was required as a condition of approval, but at less than 8,000 square feet it is hard to imagine how it will be any more successful than the recent, groceries at similar PC developments at Edgewood Plaza and Alma plaza.

Former Director of planning, Curtis Williams described the project as a regional Office center based on it's massive size.

It would be appropriate for staff to NOT allow a conditional use, but rather stick to the strict interpretation of the law and require a real neighborhood use!


12 people like this
Posted by Zappa
a resident of Barron Park
on Feb 3, 2016 at 11:42 am

Shows how the liberal Palo Alto attitudes are being a detriment to business and desirability of the city.


4 people like this
Posted by Robert
a resident of another community
on Feb 3, 2016 at 11:56 am

@Zappa

That's a good thing right? I mean, most people here don't want any new businesses in Palo Alto.


10 people like this
Posted by Robert Smith
a resident of Duveneck/St. Francis
on Feb 3, 2016 at 2:20 pm

It is difficult for me to sympathize with the developer. They used the PC ordinance to be able to build a huge building, then tried to get out of the deal for a grocery store. [I do not believe that a grocery store was really needed, we will see what the market does about that, but we were promised a grocery store and should have one.]

It is time to hold the developer to all commitments. No further special deals or exemptions.


7 people like this
Posted by Curmudgeon
a resident of Downtown North
on Feb 3, 2016 at 4:09 pm

"Shows how the liberal Palo Alto attitudes are being a detriment to business and desirability of the city."

The developer contracted to include a grocery store. Ask that notorious liberal Donald J. Trump what he thinks about enforcing real estate contracts, especially with inept developers.


10 people like this
Posted by Zappa
a resident of Barron Park
on Feb 3, 2016 at 4:14 pm


@Robert

No, that's not what made Palo Alto a successful and affluent community (which motivates a lot of people to want to live or work here) in the last several decades prior. Driving people and businesses away will only diminish its quality going forward in the future.


12 people like this
Posted by Fred Balin
a resident of College Terrace
on Feb 3, 2016 at 10:03 pm

Fred Balin is a registered user.

As per PC ordinance 5069, the total square footage is 57,900, not 65,382. Office is 38,980 sf upstairs in the two commercial buildings and on the ground floor on College Ave. Eight BMRs add 5,340 sf in the rear at Oxford and Staunton. 13,580 sf is retail: 8,000 sf (plus open air space) for Miki Werness’s Second Go at the El Camino / Staunton wraparound.

The balance of 5,340 sf of retail is on ECR just south of the garage ramps.

Jim Baer is quoted that First Republic will lease the ground floor for branch banking.

The PC states that banks and financial services are conditional uses and only permitted within the areas designated as office space. So if the conditional use is approved by the city, the branch banking would have to be on College Ave, the former location of JJ&F, which leaves the El Camino frontage between the ramps and College Avenue open for another retail use.

Might be the best possible outcome as bank customers can help support the other retail. Now if only Smalley & Co hadn’t lost 5 years passing around the cup, we might still have Common Ground on the other side of College.


5 people like this
Posted by Kazoo
a resident of Old Palo Alto
on Feb 4, 2016 at 10:11 am

Palo Alto has essentially been demoted to a 2nd rate retirement community thanks in large part to poor city management led by an inept city manager and city council members who follow his lead. Even the most simplistic decisions require months (or years!) of hand wringing and the appointment of endless blue ribbon committees before no decision is made and put aside for further study. Meanwhile, high profile tech companies leave and others simply avoid this dysfunctional community.


13 people like this
Posted by Ahem
a resident of Another Palo Alto neighborhood
on Feb 4, 2016 at 10:00 pm

Yeah right... Palo Alto has a nighttime population of 65,000 and a daytime population of 125,000+ because no tech companies want to locate here.


Sorry, but further commenting on this topic has been closed.

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