News

Palo Alto ratchets up pressure on Edgewood Plaza developer

With grocery space still vacant, council approves steep new fines on Sand Hill Property Company

First, they lost their neighborhood grocery store. Then, their patience.

Now, residents near Edgewood Plaza are hoping that a stiffer fine will finally prompt the developer, Sand Hill Property Company, to deliver the goods.

On Monday, more than a dozen came to City Hall to lobby the City Council for the higher penalty, joining dozens who made the same request by emails and letters in recent months. Many cheered after the council voted unanimously to more than double the fine from the existing level of $1,000 to $2,500 per day, with the possibility of raising it to $5,000 per day if the vacancy isn't filled soon.

By setting the higher fine, the council tried to achieve two things: fill a space that has been vacant since Fresh Market left in spring 2015 and send a message to other developers that violating “planned community” (PC) agreements comes at a cost. PC projects allow developers to exceed zoning regulations in exchange for negotiated public benefits.

In the case of Edgewood Plaza, the grocery store was the chief benefit. In exchange for providing it, Sand Hill was allowed to build 10 homes. Sand Hill was also required to rehabilitate one of two historical Joseph Eichler-developed commercial buildings -- a requirement that it violated in 2013 when it demolished the structure. The council responded by fining Sand Hill $94,200 for the demolition.

The departure of Fresh Market prompted another fine, which started at $500 per day in September 2015 and then escalated to $1,000 in October 2015. But with the space still vacant, staff had proposed last month raising the fee to $2,000 per day. On Monday night, the council decided to go a step further and make it $2,500.

Councilwoman Liz Kniss, who made the motion to raise the fee, noted that even if it doesn't immediately bring a grocery tenant to Edgewood, it could "light a fire under those involved so that you can get a grocery store."

"We share your frustration and I think we'll do the best we can in order to motivate the developer in this particular situation to provide a grocery store," Kniss said.

The council made its decision after hearing from more than a dozen residents, most of whom complained about the prolonged vacancy. Several argued that it would take a fine of $5,000 per day to make Sand Hill pay attention. Carla Carvalho, who lives near the plaza, lamented the “emotional ups and downs” of being repeatedly told by Sand Hill that they are close to signing a grocer (including Lucky's and Albertsons), only for the deal to fall apart in the end.

Carvalho said $2,000 would not suffice to get Sand Hill to comply. The fine, she said, should be $5,000 per day.

“Please make Sand Hill to think about a shiny new deli counter, the smell of fresh-cut roses and essentials of a healthy Palo Alto diet every time they write a check for $5,000 a day,” Carvalho said.

Bob Smith, who last year encouraged the council not to penalize Sand Hill, said he has since had a change of heart. When Sand Hill was requesting the PC zone, Smith said, the developer was extremely confident that he'd be able to fill the store. Now that the 10 homes have been built and sold, it's a different story, Smith said.

“One gets the feeling that the developer comes in to get the PC, the zoning override, the 10 houses, and then it's hard. ... I was patient a year ago. I lost my patience.”

A few residents countered that penalizing Sand Hill might not be the best way to win a grocer. Cheryl Tsui, who lives near Edgewood, pointed to a similar situation that had happened at Alma Plaza in 2013, when Miki's Farm Fresh Market closed after less than six months of operation (it was replaced by Grocery Outlet).

“Of course I miss Fresh Market and of course I know how wonderful it is to have grocery store in my neighborhood, but I try to look at the other side of story,” Tsui said. “I understand it might be a little challenging to find or to run a grocery store in the neighborhood.”

John Tze of Sand Hill Property told the council that his company and Fresh Market (which retains the lease) have reached out to 65 grocers about renting the space and had about a dozen visits. After two serious prospects and a various “close miscues,” Sand Hill is now trying to reach a deal with a family-owned grocer, Tze said.

“We'll do everything we can to make the deal work,” Tze said. “No one wants a grocer at Edgewood more than Sand Hill, and we're determined to fill it as fast as we can.”

But council members agreed that they're tired of waiting. Cory Wolbach was one of several council members who characterized the vacancy at Edgewood as an indicator that Sand Hill hasn't held up its end of the bargain.

“While I'm generally not in favor of government in general -- and this City Council in particular -- micromanaging what business goes into what place, in this case there was a commitment made, a commitment broken and the community and this council has run out of patience,” Wolbach said.

The council adopted the higher fine as part of a broader update of Palo Alto's fine schedule. The list also includes, among other things, new penalties for violation of transportation-demand management agreements and increased fines for demolition of historic structures.

The new penalty allows the council to set an initial fine of $2,500 per day and then to raise it by 50 percent in each of the next two days, so that by the third day the fine would be $5,000 per day.

It remains to be seen however, whether Sand Hill will challenge the decision. In a letter that he sent to neighborhood residents Carvalho, Jeff Levinsky and Lenore Cymes last week, Tze questioned the legality of the council's fines.

“We understand the community's desire to see a market operating again,” Tze wrote. “We want the same thing and are doing everything we can. The store can only be used for a market; we have no intention to change that. We leased it to a market; they are still a tenant even though they are not actively operating; we have fulfilled our obligations. While we are being fined, we believe that fine is not legally enforceable, but we choose not to contest to avoid a messy situation."

Even if Sand Hill were to challenge the penalty, the city has another instrument in its enforcement toolbox. As City Council candidates Arthur Keller and Lydia Kou pointed out in a letter to the council, the “planned community” ordinance empowers the city to review the project three years after the building is occupied to “ensure that conditions of approval and public benefits remain in effect as provided in the original approval.”

If staff finds violations, the applicant has 90 days to correct them. Failure to do so would lead to fresh reviews by the Planning and Transportation Commission and the City Council, which would then “determine appropriate remedies, fines or other actions.”

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Comments

40 people like this
Posted by Why No One Trusts Sand Hill
a resident of Duveneck/St. Francis
on Nov 8, 2016 at 2:48 am

Buried in the letter quoted above, Sand Hill Properties says: "we have fulfilled our obligations." In other words, Sand Hill claims a vacant store space satisfies its promise to provide an actual grocery store. With that kind of arrogance, it's small wonder the Council unanimously sided with the neighbors and opted to raise the penalties.

This is the same Sand Hill Properties that demolished a historic building at Edgewood Plaza it had pledged to preserve, claiming it hadn't realized the building was in bad shape despite submitting plans detailing how the restoration would be accomplished.

Congratulations to the Edgewood community for standing up to Sand Hill.


9 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Nov 8, 2016 at 7:03 am

Will this be a trend?

How is Grocery Outlet doing. I have heard of very few people I know visiting it and those that do don't spend much.

Will the new College Terrace market thrive?

Midtown Safeway is always busy. Piazzas is generally very busy too. People will always need groceries and at present most are willing to drive out of town to get them. Will this trend continue or will a neighborhood grocery store be anything other than stop gap?


24 people like this
Posted by Profitable
a resident of Duveneck/St. Francis
on Nov 8, 2016 at 7:23 am

Profitable is a registered user.

Fresh Market was profitable but was closed because other West Coast locations were not. The developer had high confidence finding grocers would not be a problem before they sold the $30 million in townhomes they were allowed to build in exchange for the grocer but now claim its hard. Sand Hill agreed to have a grocer occupy that but did not write that into the contract with their leasee or are choosing not to terminate the contract because they are still getting paid rent. Thanks to city council for putting pressure on Sand Hill to meet their commitments.


20 people like this
Posted by Grocery Outlet
a resident of Barron Park
on Nov 8, 2016 at 7:57 am

Grocery Outlet on Alma is busy!


11 people like this
Posted by Random
a resident of Downtown North
on Nov 8, 2016 at 8:18 am

A bad situation and probably the appropriate remedy for now, particularly if Sand Hill continues to receive rent from Fresh Market. Realistically, there has to be a point of equilibrium where this becomes a net negative for Sand Hill (i.e. rents received from Fresh Market are far less than their total cash outflow in the form of their daily fine).

I do not presume to know the history of the deal in order for their PC zoning, but without judging their intentions, objectively, it may not be that simple to replace a grocery store. Many in Palo Alto and Mountain View have either failed or not been attractive to the big box chains. As a community, let's understand that business is sometimes not as easy as "hey, you promised me a grocery store, where is it?"

Unless Sand Hill is actively doing nothing, everyone should just recognize that grocery stores have to find profitability in their endeavors too, and perhaps Sand Hill is facing resistance.

In either case, at some point, it probably behooves Sand Hill to put in a grocer who pays slightly below market rent just to get someone in - I don't know how the financial numbers shake out, but there must be some equilibrium point between rent loss against daily fines. I also would imagine Fresh Market would have to cover the difference and still be responsible for rents below what their lease calls for.


15 people like this
Posted by commonsense
a resident of Barron Park
on Nov 8, 2016 at 10:10 am

One question - what is the city doing with the money from the developer?


20 people like this
Posted by Its a big company
a resident of Duveneck/St. Francis
on Nov 8, 2016 at 10:20 am

If it is so hard to establish a grocery why did Sand Hill agree to do it? They aren't a small developer, they are a billion dollar company. Their web site lists Active Projects

3175 Hanover, Palo Alto
3251 Hanover, Palo Alto
3300 El Camino Real, Palo Alto
1050 Page Mill Road, Palo Alto
Edgewood Plaza, Palo Alto
Main Street Cupertino, Cupertino
The Grove, Los Gatos
Vallco Shopping Mall, Cupertino

No mention of 2600 El Camino, the Bank of America building that they were going to demolish for Stanford.


20 people like this
Posted by john_alderman
a resident of Crescent Park
on Nov 8, 2016 at 10:26 am

john_alderman is a registered user.

@Profitable - there is no source that supports the claim that the Fresh Market location was profitable - that's just neighborhood gossip. The market was always empty, there is no way it was profitable.

@Random - Sand Hill is sitting there collecting rent on an unused building, so they aren't particularly incentivized to do anything. That is why the increased fines make sense. Fresh Market is still an active participant in this process because they are still the lessee, and that complicates any deal or rent reductions for a new tenant. Everything has to be a three way negotiation.

A smarter city lawyer would have drafted an agreement that made an actively operating grocery story the requirement for selling the new homes. Let's make sure we learn that lesson for the future.


17 people like this
Posted by midtowner
a resident of Midtown
on Nov 8, 2016 at 10:33 am

Safeway on Middlefield has gotten out of hand (long lines, poor service), especially on the weekends, which has led our family to trek further south to Piazza's. While Fresh Market was noticeably more expensive, the convenience of location and speed of check out was undoubtedly welcome and savored.

I know it was Andronico's that nearly struck a deal, before backing out. Can we convince Whole Foods or *gasp* Lucky?


24 people like this
Posted by george drysdale
a resident of Professorville
on Nov 8, 2016 at 10:38 am

The Palo Alto city council would be physically thrown out of an Economics 101 class. First the Buena Vista rip off and now fines for not producing a store that is to bankrupt upon it's opening. Goofy politics like this spring up in college towns with their perfect world mind set. Adolescent idealism of the undergraduate. Fine the Palo Alto city council not a developer who's trying to improve a city.
George Drysdale economics teacher


16 people like this
Posted by Mountain View can open a small grocery, why can't Palo Alto?
a resident of Duveneck/St. Francis
on Nov 8, 2016 at 11:04 am

Safeway is opening a new store in Mountain View at the site of a closed Fresh and Easy (corner of Rengstorff and Middlefield). It is a 28K square foot space and Safeway rented it quickly after Fresh and Easy closed. Why are we having such an issue? Is it the rent amount or the size of the store or both?

Web Link


22 people like this
Posted by Mick Stranahan
a resident of Fairmeadow
on Nov 8, 2016 at 11:13 am

Regardless of whether or not a supermarket can be profitable it's a requirement of the CBA that one be there. If Sand Hill has to pay off Fresh Market to get them to abandon the lease, so be it. If Sand Hill has to offer free rent, or even pay another tenant to go in there, so be it. They got their money from selling the housing, and now they have to fulfill their obligations. If they agreed to something that is unprofitable for them, it's too bad.

I hope that Cupertino voters look at what Sand Hill did in Palo Alto and vote down Sand Hills massive boondoggle at Vallco.


11 people like this
Posted by Litgal
a resident of Community Center
on Nov 8, 2016 at 11:30 am

Re Grocery Outlet, I love the store. Great finds & great prices, especially in the wine dept. I doubt there's room for another GO in Palo Alto, but this kind of store is a hit. it is very busy every time I go and I don't mind driving from my neighborhood. There's got to be a good fit for Edgewood.


1 person likes this
Posted by not that simple
a resident of Another Palo Alto neighborhood
on Nov 8, 2016 at 11:39 am

The parking,access,traffic,circulation problems with the site were completely ignored last night.


8 people like this
Posted by john_alderman
a resident of Crescent Park
on Nov 8, 2016 at 12:10 pm

john_alderman is a registered user.

@not that simple - that ship sailed 5 years ago when the redevelopment was approved.


15 people like this
Posted by StFrancis Resident nearby
a resident of Duveneck/St. Francis
on Nov 8, 2016 at 12:29 pm


Web Link

"The demand for organic foods in California is not the only sign that Fresh Market will miss out if it leaves the state. Interim President and CEO Sean Crane stated in the company's recent earnings conference call that the Palo Alto store is now growing in comps by double digits, and the Santa Barbara store is notably improving. "

There are also emails from John Tze of SandHill directly to a member of the local mailing lists, indicating that FreshMarket had confirmed personally to Tze that the store was profitable.

"John said that in the wake of the news, he contacted TFM corporate who expressed that they were very sorry to leave Palo Alto and its supportive community. It surprised them that the Edgewood store quickly became similarly profitable to their stores having 12-15 years operating history, so to close it is very unusual. However, they said it proved too difficult to bring the goods from 2,000 miles away and they have no economies of scale in California."

At this stage the rumor can be treated as established fact: that yes, the store was indeed successful & profitable.

It's time to move on from this particular sideshow and refocus on the major event: the battle to re-establish a grocer on the spot, as per binding legal contracts.


3 people like this
Posted by john_alderman
a resident of Crescent Park
on Nov 8, 2016 at 1:19 pm

john_alderman is a registered user.

@StFrancis Resident nearby - "growing in comps" does not mean "profitable", in any sense.

"There are also emails from John Tze of SandHill " - False, There are emails from neighborhood advocates, who talked to John Tze, who talked to someone from Fresh Market. So third hand neighborhood gossip, like I said. It is impossible for that store to have been profitable given the low traffic it was getting.

So the only established facts about Fresh Market are that it was empty most of the time, and got shut down after ~20 months of operation.


6 people like this
Posted by Be Positive
a resident of Duveneck/St. Francis
on Nov 8, 2016 at 1:21 pm

Does the agreement with Sand Hill require them to lease to a grocery store or to make sure one is operating there?


3 people like this
Posted by Mike
a resident of Southgate
on Nov 8, 2016 at 1:26 pm

Patience is like virginity. Once you lose it, there is no getting it back.


3 people like this
Posted by john_alderman
a resident of Crescent Park
on Nov 8, 2016 at 1:37 pm

john_alderman is a registered user.

@Be Positive - the specific requirement is somewhat ambiguous, but I think supports the community demand that there actually be a functioning, operating, open for business grocery store.

"Provision of a grocery store in the 20,GOO sq. ft. building. The
commercial property owner shall ensure the continued use of
the 20,GOO sq. ft. building as a grocery store for the life of the
Project; "

Web Link

The problem is that the main "stick" to enforce this was not allow Sand Hill to sell the homes until they complied. Now that they have built on sold the houses, there is less leverage.

"No building permit shall be approved (other than for model homes with
no more than one model home per plan type) for residential development
prior to submittal to the Director of a lease agreement or other legally
binding commitment from a grocery operator to occupy 20,600 square
feet in the Grocery Building. The Lease Agreement shall require that
Occupancy of the grocery store shall occur not later than 15 months after
the issuance of the first building permit for the Grocery Building or 15
months after issuance of the first building permit for the residential
development (other than a model home). Final inspection and occupancy
shall be allowed for not more than 5 homes (including model homes)
prior to final inspection and occupancy approval for the grocery store.
Bonding or other financial security may be considered in lieu of these
requirements only upon review and approval by the City Council as an
amendment to this PC ordinance. "


4 people like this
Posted by KarenP
a resident of Duveneck/St. Francis
on Nov 8, 2016 at 2:32 pm

Regarding what the City intends to do with the fines collected from Sand Hill, I hope some portion can be allocated to other businesses at Edgewood Plaza that are struggling due to lack of foot traffic that a grocery store would have provided.


11 people like this
Posted by StFrancis Resident nearby
a resident of Duveneck/St. Francis
on Nov 8, 2016 at 2:36 pm

@ john_alderman - you asked for evidence, it was provided, and now you are rejecting it based upon ... nothing at all.

You have a "gut feeling" that the Store must have been unprofitable because you observed that it was empty, sometimes.
That's highly unscientific. It's preferable to base one's conclusions on reliable data. i personally observed it being quite busy on occasions, especially around lunchtime. So I guess our 2 highly unscientific point observations cancel each other out, eh?

Here is some more data for you to digest
- They were paying low rent - about 1/3 what other tenants were paying per square foot.
- the person to whom John Tze confirmed profitability is a reliable source. It is not false gossip as you are baldly stating, without evidence.
- "double digit comps" growth is unequivocally positive and healthy. It's better than how their other stores were performing. Here is the full earnings call transcript if you wish to go through it: Web Link


20 people like this
Posted by Incidentally
a resident of Another Palo Alto neighborhood
on Nov 8, 2016 at 2:47 pm

[Post removed.]


6 people like this
Posted by Scare tactics
a resident of Community Center
on Nov 8, 2016 at 2:59 pm

[Post removed.]


16 people like this
Posted by Incidentally
a resident of Another Palo Alto neighborhood
on Nov 8, 2016 at 3:22 pm

[Post removed.]


1 person likes this
Posted by john_alderman
a resident of Crescent Park
on Nov 8, 2016 at 4:05 pm

john_alderman is a registered user.

@StFrancis Resident nearby - He said she said he said is not "evidence". Evidence is a primary source. Provide a financial statement, newspaper article with a source, etc... I am on the same mailing list as you, and have same email from John F. It is third hand, there is no quote from John Tze (do you also consider him a reliable source anyway?) in the email, and there is no quote from Fresh Market. If that email is all you got, you got nothing. My question for is why are you so personally invested in believing it? Do you think it make it more likely a new market will come?


12 people like this
Posted by Carla Carvalho
a resident of Duveneck/St. Francis
on Nov 8, 2016 at 4:30 pm

@john-alderman - I have emails directly from John Tze. I would be happy to share them with you lest you believe I am rumor mongering.


9 people like this
Posted by @Scare Tactics
a resident of Professorville
on Nov 8, 2016 at 4:55 pm

[Post removed.]


6 people like this
Posted by margaret heath
a resident of Evergreen Park
on Nov 8, 2016 at 5:09 pm

margaret heath is a registered user.

he question is, why did the city allow such a loosely worded PC for Edgewood Plaza?

When the developer of the property on the corner of El Camino and College proposed that , instead of the 25,000 sq ft building allowed under the existing zoning, he be allowed to build a 65,000 sq ft building, to include about 40,000 sq ft of premium and profitable office space and 15,000 sq ft of retail on the first floor, the city's PC documents specified in detail what the terms for granting this were.

The developer lobbied for the PC by leveraging public support for the existing grocery store, JJ&F, (remember his "I love JJ&F slogan?), telling residents he would set aside 8000 sq ft in the new building for JJ&F as the” public benefit” in return. Whatever you think about the city micro-managing commercial space, or even the legality of a city specifying a particular commercial use, this was the bargain the developer wanted to strike.


7 people like this
Posted by margaret heath
a resident of Evergreen Park
on Nov 8, 2016 at 5:13 pm

margaret heath is a registered user.

part 2

Given the city's reputation for not enforcing public benefits, some residents were skeptical and urged the council to nail down the terms of the PC to avoid a repeat of the Alma Plaza PC grocery store fiasco. The PC terms specified the “public benefit” and a schedule of daily fines to be levied by the city if the building was not in compliance.




Like this comment
Posted by john_alderman
a resident of Crescent Park
on Nov 8, 2016 at 5:13 pm

john_alderman is a registered user.

@Carla Carvalho - please feel free to post any relevant excerpt.


14 people like this
Posted by anonymous
a resident of Duveneck/St. Francis
on Nov 8, 2016 at 5:27 pm

The Edgewood shopping center did not previously have housing. The developer made a large profit quickly by being granted the ability to install ten (10) homes. The developer was not supposed to wash his hands of this development at that point, however.
Meanwhile, it was crystal clear that a grocery store was required to fill the space there.
Some may recall there WAS a grocery store there years ago but the center had fallen into disrepair after many decades. We are pleased that the center was fully renovated. We walked to The Fresh Market and regretted that the corporation based far away decided to move out of the western parts of this country. I understood when they vacated that this had nothing to do with a notion that the location could not maintain a grocery store. I also have no idea how much TFM is still paying the developer on the lease.
What I DO see is that we don't have a grocery store. I know grocery stores are not a high profit margin business. So what, that fact was and is known. The developer DID get his profit. If he had not intention of providing a grocery or felt it was impossible, then he should not have contracted to do so.
There IS a risk that deals may be proposed and concocted for the developer to "get out of" his contract with the City of Palo Alto to provide a grocery store tenant. I OPPOSE allowing the grocery store space to be divided into smaller spaces for far-less-desirable low value tenants such as a nail salon, hair salon or barber, liquor store or 7-11 or etc. These are NOT acceptable. Terms may need to be made appropriate for another grocery store tenant to take up a lease. OK, fine. I will be happy to be able to walk over to Edgewood Shopping Center again (no need to drive for hundreds if not thousands of us in the vicinity of the center).


9 people like this
Posted by Sand Hill Losing in Cupertino Too
a resident of Crescent Park
on Nov 9, 2016 at 6:42 am

In Cupertino, Sand Hill put Measure D on the ballot to gain voter support for its massive redevelopment of the Vallco Shopping Mall. As of right now, the measure is losing, with only 45% of tallied votes in favor. Sand Hill reportedly spent over $4 million to push the measure (per Web Link) and vastly outspent opponents, while also promising over $76 million in public benefits.

Perhaps voters realize Sand Hill is not to be trusted. In fact, Cupertino opponents of Sand Hill cited its failures at Edgewood Plaza (knocking down a historic building it pledged to preserve and not keeping a grocery store operating) as reasons to vote against Measure D.


11 people like this
Posted by Larry Kavinoky
a resident of College Terrace
on Nov 9, 2016 at 7:06 am

Sand Hill is looking for the grocery store to be a profit center.
They need to see the grocery store as an obligation to have the increased rents/profits from everything else.

Make Sand Hill adjust the rents or inventory financing so that a grocery store can make a profit. That must be the focus, even if they have to pay a grocery store to operate. That will be cheaper than 5,000.00 per day fine. It should not be Palo Alto residents who take the hit because of the way Sand Hill chose to write a lease with the grocery store.

While the city is looking at this, how about making sure in the future they have a big financial club on these developers who make empty promises. Let Sand Hill declare bankruptcy and the new owner take over with much less debt and honor the terms of occupancy that the city set down.

Please, in the future, make this type of fine automatic if not rectified in 60-90 days except perhaps in case of earthquake or fine.


Like this comment
Posted by ChrisC
a resident of College Terrace
on Nov 9, 2016 at 12:01 pm

I'm all for neighborhood grocers and am appalled by food deserts, however this stuff about requiring a grocery store, either at Edgewood or College Terrace just isn't right. Grocery is a very low profit margin, 1% or even less, and can only exist on volume sales. Grocers have looked at these "opportunities" and have turned them down. Honestly, why should developers have to pay fines for that? Last I heard Michael "Miki" Werness would open in College Terrace He'll make it a lovely store, I'll shop there, then it will close as people just stop by to pick up a bottle of wine on their home because they don't have time to go to BevMo or Trader Joes.


2 people like this
Posted by resident
a resident of Charleston Meadows
on Nov 9, 2016 at 12:13 pm

Given the size of the property maybe it can be used as a "food court" in which different groups can use it to serve ready made food. It would be like the food trucks without the truck. The trouble with how that property is used is that there is not enough traffic during the day. It is not serving any local businesses in the area. Maybe a local grower can have a stall in there like at the Farmer's Markets. So it would be a collection of tiny food suppliers vs one store.


Like this comment
Posted by Kik
a resident of Old Palo Alto
on Nov 9, 2016 at 4:54 pm

@resident a food court is a great idea! i was just thinking the same thing. maybe they need to think outside the box of a traditional grocery store and offer a variety of prepared foods similar to food trucks. I don't know if the this business model would make sense in that space, but it would be much better than an empty grocery store. Many food trucks are looking for the opportunity to get into a brick and mortar space and it would offer the option of eating there or taking out. Definitely food for thought!


15 people like this
Posted by margaret heath
a resident of Evergreen Park
on Nov 9, 2016 at 5:20 pm

margaret heath is a registered user.

@ChrisC

You miss the point. If a developer comes to the city asking to exceed the zoning for a bigger profit, the developer has to offer the city something substantial in return. Or the developer can build within the current zoning with no strings attached. Their choice.

Sandhill wanted to strike a special deal with the city. For their part of the bargain, they were willing to sign onto a legally binding contract requiring Sandhill (or any future owner of the property) to keep a grocery store operating, and remain operating, in the space that had been occupied by a previous market. In other words, this space could not be converted later to another, possibly more profitable, use.

If Sandhill miscalculated what it would cost to maintain an operating grocery store in that space, after reaping their profits, do you think Palo Alto should tear up the agreement, pat them on the head and tell them it is okay to renege? What kind of precedent would that set for the city?


15 people like this
Posted by margaret heath
a resident of Evergreen Park
on Nov 9, 2016 at 5:35 pm

margaret heath is a registered user.

Sandhill offered and legally agreed to provide a market for the local residents to buy all the basic household items (milk, bread, meat, pantry staples, deli, etc.) to use in the home. Not fast food from a food court, however delicious.

The convenience of a grocery store that could be walked to was agreed to as a way to offset the impacts of having a a large development. Particularly as that part of the city is not served by a local grocery store, which would also contribute to the city's goal of minimizing car use.


5 people like this
Posted by Stan
a resident of Downtown North
on Nov 11, 2016 at 11:08 am

So, does the city actually collect these fines, or are they simply posturing and effectively meaningless?


Like this comment
Posted by Lynne
a resident of Crescent Park
on Nov 11, 2016 at 6:49 pm

I live one block from Edgewood Plaza. Fresh Market could not have been profitable as it was always empty. Terrible produce; aging fish and meat; no customers.

More to the point at present: All of the parking has now been taken by other businesses since established.

What do you need for a grocery store?

1. Groceries
2. Parking

Sad to say the dream is over.

City Council: How about looking at the plaza today and tell me how a grocery store would function without parking?


3 people like this
Posted by anonymous
a resident of Duveneck/St. Francis
on Nov 11, 2016 at 10:24 pm

@Lynne, I found The Fresh Market to be reasonable for a neighborhood grocery. It wasn't Costco and it wasn't the most elite big city grocery, either. It did fill a need.

I also think people are using the parking lot as one of those commuter lots so carpoolers can meet.

I see you are from Crescent Park. Many of us from Duveneck neighborhood like me as well as from Crescent Park can walk to the store. I am just far enough to get a bit of exercise out of it (1/2 mile? I should check) and it was GREAT to be able to walk over there. I won't do it for any hair salon, nail salon, spa, yoga place, 7-11, though. I will do it again for a neighborhood grocery on a frequent basis. I look forward to a new grocery tenant occupying the attractive grocery space.

Once a grocer is in, perhaps carpool parkers can be discouraged from using what was an available lot for some months.


Like this comment
Posted by Build It And They Will Not Come
a resident of Crescent Park
on Nov 12, 2016 at 10:35 pm

Perhaps the City made Sandhill Properties mad with their edict to keep the old Safeway, like it was some kind of heritage site. It is an OK building if it was all alone with plenty of parking, but in that little place when Fresh Market was there it was a real pain in the neck to get in and out with all the small parking spaces. Not everyone in Palo Alto drives a SMART car or bicycle ... really not even that many.

What they should have done is something like they did in the Mtn. View Safeway, build a new building and put parking on the top.

I went to Fresh Market several times a week when it opened and then off and on. I was sad to see it leave because they had some good stuff and a friendly staff. But after a while they got lazy, the produce and meat were not managed well, or were not selling. I think that could have worked itself out as the managers learned what sold and what didn't over time, but they didn't get the change.

I don't think Safeway would even consider seriously putting another store so close to the one in Midtown ... unless they were going to remodel Midtown or do away with it ... but why would they want a smaller store, and the Menlo Park or Mountain View stores are very close for most Palo Altans.

Now we seem stuck with a small store that no one seems to want to rent, or maybe the asking rent is too high. I think to the extent the City can it should maximize the fine to Sandhill until SH can show as a certainty there is no one that will move in at a reasonable price for rent.

Then what? If the City is not competent to figure out what to do with these properties or how to manage development in Palo Alto, maybe there should just be a moratorium on development until a decent system can be in place that allows the public to comment and provide input or have a veto. I think most Palo Altans would vote to have another nice grocery store in town.

I still have never gotten any answer to the speculation that the existing markets are somehow influencing, lobbying or sabotaging plans to prevent increasing competition.


9 people like this
Posted by Rajesh
a resident of Los Altos
on Nov 13, 2016 at 6:15 pm

The key thing is that they MUST provide a grocery store. It's up to them to figure it out, and not to wring their hands and insist it's impossible. They agreed to have a grocery store in exchange for the highly profitable housing that they were allowed to construct.

If they have to offer free rent, so be it.

If they have to pay someone to operate it, so be it.

If they have to operate it themselves so be it--I can see Pau up there whining "we don't know how to run a grocery store."

It's Sand Hill's obligation to have a store there, it's not the City of Palo Alto's obligation to figure out how Sand Hill should do it. It's not the city's problem if a grocery store there is not going to be a big money-maker. Sand Hill should have thought of that before they agreed to the terms of the development agreement.

Even $5000 per day is not enough. The fine structure should have been $1 for the first day, then doubling every day. They'd have found a way to solve the problem very quickly

I know that area since my friend lives up Channing from the plaza. What would work there is a store like Oakmont market in Campbell and Cupertino. Produce, ethnic foods, fresh bread, dairy, and the one in Campbell has a meat counter. Those stores tailor their product selection to the neighborhood. Sand Hill might have to pay a store like that to go in there and subsidize it initially, or forever. Tough luck. Maybe the Milk Pail would go in there with a larger store if they got free rent.

One more reason for SHP to find a way to comply with the CBA is because groups like the one that led to the defeat of Measure D in Cupertino would not be able to point to Sand Hill's failure to comply with the CBA in Palo Alto as evidence that they can't be trusted. They need to work A LOT on their reputation given what transpired in Sunnyvale with Town Center, Cupertino with Main Street, and Palo Alto with Edgewood Plaza. If not for their poor reputation, Measure D might have passed, but a lot of voters just didn't trust them despite their $6+ million campaign.

Now they are threatening to just close everything in Vallco and let the building sit there vacant. After they evicted all the stores that didn't want to leave they based their whole campaign on "look the mall is empty, let us build high-rise commercial buildings," without explaining that the reason that the mall was empty is because they kicked everyone out instead of trying to make a go of it.

Hopefully all cities in the Bay Area will be a lot more careful in the future.


3 people like this
Posted by Curmudgeon
a resident of Downtown North
on Nov 13, 2016 at 7:18 pm

Sand Hill is not The Donald. They cannot just stiff us and walk away.


4 people like this
Posted by john_alderman
a resident of Crescent Park
on Nov 13, 2016 at 10:49 pm

john_alderman is a registered user.

@Curmudgeon - They totally did stiff us. Not only is there no grocery store, they are collecting rent on an empty building, and sold off all the houses. It was shoddy legal work by city hall that allowed the loopholes Sand Hill ran through.


1 person likes this
Posted by Old timer on Edgewood
a resident of Duveneck/St. Francis
on Dec 5, 2016 at 12:21 pm

Having lived on Edgewood for 55 years, we have seen them come and go: Lucky's, Albertson's and now Fresh Market.

Perhaps we should try to entice Amazon to open and "Amazon Go" store. If Palo Alto isn't techie enough, where is? Web Link

I don't know where anyone is going to park however.


6 people like this
Posted by Big Time Crooks
a resident of Leland Manor/Garland Drive
on Dec 5, 2016 at 1:35 pm

Sand Hill Properties has a very tarnished reputation, and Cupertino just passed legislation to get them out of their hair and out of their city.

The upper management/owners of this company are from outside the US, and despite living in California for several years, have never been interested in changing their citizenship status. Legally speaking, this makes all of the primaries flight risks should business " go south" for them-- and at the present time, more and more of Sand Hill's clients are catching on to their improprieties.


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

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