By this fall, the vacant grocery store at Palo Alto's Edgewood Plaza Shopping Center will again be filled, two years and three months since The Fresh Market suddenly closed its store.
Landlord Sand Hill Property Company announced the deal on Tuesday, capping a search for a replacement grocer that was fraught with lawsuits, vocal criticism from shopping center neighbors, thousands of dollars in city fines over the vacancy, discussions with more than 70 grocery companies and more than a few false hopes.
The new grocery operators will be a couple that runs Crystal Springs Produce in San Mateo, Mustafa and Kyazi Mutlu. The 20,600-square-foot Edgewood building at 2170 W. Bayshore Road will be their business' second location.
A name for the market has not yet been identified, said Matt Larson, spokesman for Sand Hill.
Both companies expressed enthusiasm this week about their new partnership.
"We couldn't be more excited to open our new location in this wonderful community. We ... couldn't think of a better location for our expansion. We believe Palo Alto is a perfect location for carrying the local and organic offerings that we are so passionate about. We love Palo Alto and the people we know here, so this is an exciting opportunity for us," Mustafa Mutlu stated in a press release.
"We are thrilled to have found such a great partner for this space," John Tze of Sand Hill Property Company stated. "Mustafa and his family run a very popular location in San Mateo, and I'm confident a grocery store under their adept ownership will be a great fit for Edgewood and its surrounding neighborhoods."
Sand Hill has put up $300,000 in financing to facilitate reopening the grocery store, of which the Mutlus are beneficiaries, according to the company.
The agreement was signed last week, Larson said. It capped a nine-month negotiation with the Mutlus, who are originally from Bulgaria and immigrated to the U.S. in 1990.
Complicating the process, Sand Hill has previously stated, was The Fresh Market's retention of the lease, even though the business had moved out, and the deal needed to include The Fresh Market. Under the agreement, Crystal Springs will sublease the Edgewood space through 2023 under the terms of the Fresh Market lease, Larson said.
The Mutlus established their store in San Mateo by transforming a vacant sandwich shop. Crystal Springs Produce has received a five-star Yelp rating from 146 out of 154 reviewers who extol its fresh produce from local sources and reasonable prices. The store has been in operation for seven years and carries cheeses, dairy, fresh-baked breads and other items. It specializes in local and organic produce, according to the market's website.
Reached by phone on Wednesday, Mustafa Mutlu said he expects the Edgewood store, in addition to offering fresh produce, will sell meat, have a bakery, make sandwiches, and, if a permit comes through, offer a selection of wines. He expects to gradually hire 30 to 40 people. The store will be open daily, but not 24 hours a day.
Mutlu said the business does not plan to make major renovations to the existing interior.
Larson said that the opening depends on factors not in the Mutlus' and Sand Hill's full control, namely permitting from the city and Santa Clara County Public Health department inspections.
Sand Hill has had to pay more than $700,000 in penalties to the City of Palo Alto for not maintaining a viable grocery store in the spot, which the city claims is a violation of its planned community ordinance for the development. Sand Hill and its business entity for the project, Edgewood LLC, dispute that the ordinance requires the landlord to provide anything beyond the space for a grocery store. The company has said it has been hampered by constraints in a 10-year lease with Fresh Market that gives the southeastern grocer the right to sublet the property. Sand Hill sought to have a large portion of the penalties vacated or at least reduced at an administrative hearing, but an April 2 ruling went against the company.
On June 12, Santa Clara County Superior Court Judge James Stoelker denied the developer's appeal to stay the now daily $5,000 fines while the company argues before the court to reverse the administrative ruling and to determine that Sand Hill is not required to ensure the continuous operation of a grocery store on the site. But Stoelker ruled that the case was not ripe for his hearing. Sand Hill should first use Palo Alto's legal process for suspending penalties during an appeal before it can again return to the judge if the city denies the developer's request for a stay, he said.
Larson said that Sand Hill and Edgewood LLC, which filed the appeal, do not have any comment on the status of the litigation at this time.
Jeff Levinsky, Carla Carvalho and Lenore Cymes, residents who advocated for the City of Palo Alto to pressure Sand Hill to find a new grocer, expressed in a statement Wednesday their pleasure over the new grocer and thanked those who put pressure on the company.
Upon hearing the news of the new grocer, Edgewood neighbor Greg Brail said he and his family shopped at The Fresh Market at least once a week and they plan to do the same at the new store. The community has missed having a local supermarket, he said, adding that he hopes the grocery store will sell sandwiches and be a place his family can go for lunch.
Business owners and managers at the shopping center were divided in their opinions over whether the lack of a market has harmed business.
Steve Stivala, manager at House of Bagels, said he likes the idea of what the new market will bring.
"It sounds fantastic," he said.
But with or without a grocer, the shopping center has done very well, he said, as a line at nearby Starbucks stretched out the door.
Although Stivala has heard some people say that the lack of a grocery store is a setback, he disagrees.
"It's not a disaster," he said, noting the mix of stores attracts people and the look and feel of the Eichler development's restoration have served the community well.
"What I see without any biases is that Sand Hill did a very, very good job," he said.
Stivala is concerned that parking might be inadequate, however. He suspects that some of the spaces are currently used by commuters who park there all day but work elsewhere. If signage goes up or an attendant discourages that kind of use, there might be adequate parking, he said. One day last week one of his employees saw a construction truck drive up and deposit six workers, who promptly went to their individual cars parked in the center's lot at the end of the day, he said.
Elements Massage owner Mahshid Parsi said she hopes the market will be good for business.
"Our walk-in business dropped considerably and it never picked up after Fresh Market left. The business is going well with memberships, but I hope we will have more walk-ins," she said.
Supercuts patron Maria Arne said that she "cannot put into words" how glad she is a new grocery store will open.
"You don't know what it's like to have to travel so far for groceries. It is highly needed," she said, noting that there is no place nearby to easily pick up a few last-minute items.
Others who shopped at The Fresh Market said they are excited to have a small grocer in the spot even if it doesn't offer all of the items one would find at a Safeway or Lucky grocery store.