They've left one by one: the cigar store, the bakery, the popular sandwich maker. Now, a dog-grooming business and a dry cleaners may need to find new homes as well if their landlord goes through with a plan to gut the first floor of the Hotel California building in Palo Alto's California Avenue shopping district, where they are located.

The two are the last retailers remaining in an increasingly empty 5,130-square-foot ground floor at the corner of California and Ash Street. The other three businesses operating out of the prominent beige building with the green awnings left starting in the summer of last year.

Cigar House, at 393 California, occupied a 581-square-foot space and closed on May 29, 2018. Palo Alto Baking Company, at 381 California, occupied 3,061 square feet and vacated Dec. 31, 2018. It was to remain a wholesale bakery elsewhere, according to a sign in the window.

Simply Sandwiches, the small grab-and-go spot at 2435 Ash St., occupied 207 square feet and suddenly shuttered in March 2019. The business owners of the three establishments did not return phone calls from the Weekly regarding the circumstances around their departures.

Matt Larson, spokesman for building owner Sand Hill Property Company, said Hotel California — a residence on the second floor offering single-room-only, extremely low-income units — will remain.

Sand Hill owners Peter and Suzanna Pau, through their foundation, made the top floor of the building into affordable housing for very-low-income individuals, with 20 units, in July 2016.

Sand Hill intends to renovate the first floor so it will be a larger, contiguous space, Larson said.

"They're rethinking the sizes of the space so there will be a better chance of filling it quickly," he said by phone.

Premier Properties lists the space for retail, restaurant and personal-services use and states that it is "divisible." Its website states that demolition plans are underway for an open layout. The company's executives did not return requests for comment.

Alexander's Dog Grooming and California Cleaners, which occupy 590 square feet and 685 square feet respectively, have been on month-to-month leases for years, the owners said.

They initially did not know that real estate developer Premier Properties, which posted signs advertising leases at the three empty spaces, was including their spaces as well, they said. When they inquired, the property manager told them they would not immediately need to vacate. Chris Choi, an owner of the family-run cleaners, said they have been at the location for 30 years and on a month-to-month lease since 2007. The family owns another dry cleaners on Middlefield Road. If the business is evicted, Choi would like to be able to work out a deal with Sand Hill, he said on Monday.

"I'm hoping they will give us a small space on the side for a pick-up and drop-off location. That's my request," he said.

Carole Brunning, owner of Alexander's Dog Grooming, said she has been at the location for 38 years. She learned about the plans to lease the entire ground floor after looking at Premier Properties' website, she said. Brunning said she invested in the building a few years ago by doing a total remodel. The landlord hasn't raised her rent recently, but a move would close her business.

"I can't afford to be here and to set up in a whole new building," she said.

Groomer Carol O'Connell, who has worked at the shop for 20 years, said she doesn't know what she would do if Alexander's must leave.

"I think it's really bad. We'll be dust. These big businesses, they're just running all the small businesses out," she said.

Whether the renovation leads to the loss of small retailers remains to be seen. The city's Comprehensive Plan Land Use and Community Design Element directs the city to "create regulations for the California Avenue area that encourage retention or rehabilitation of smaller buildings to provide spaces for existing retail, particularly local, small businesses."

Under city ordinance, the property is currently zoned regional/community commercial, which includes uses such as department stores, bookstores, furniture stores, toy stores, apparel shops, restaurants and non-retail services such as offices and banks, according to Palo Alto's Comprehensive Plan.

The city's zoning code does not allow the conversion of ground-floor retail to offices except where grandfathered in prior to March 19, 2001.