UPDATE: On Nov. 16, the City Council approved a request from Khaled Taffi to open the Real Produce International Market at College Terrace Centre.
A family-owned and operated grocer could open in the College Terrace Center before the holidays if the Palo Alto City Council approves its proposal on Nov. 16.
Real Produce International Market could occupy the vacant 8,000-square-foot space in College Terrace Centre at 501 Oxford Ave. as soon as two to six weeks after the vote, according to a report from the city's Planning and Development Services Department. The new market would offer high-quality fresh produce, meats, organic and international products, coffee service, a deli, a grab-and-go area, fresh flowers "at good prices," online shopping and free, same-day delivery to Palo Alto residents, CEO and manager Khaled Taffi said by phone on Wednesday.
Taffi and his partners own and operate two produce wholesale businesses in South San Francisco and Oakland and a retail grocery store in San Jose.
"The grocery business is in my blood," he said, noting that he has been involved since his youth. His father was also a grocer.
Real Produce International would take over a space that is mandated by city ordinance for use by a grocery store. The Oxford Avenue site was once the longtime location of JJ&F Market before the lot was redeveloped into a mixed-use building.
The center's developer was required to provide space for a grocer in the 57,900-square-foot, mixed-use building at 2100 El Camino Real. The ordinance made the grocery tenant subject to city approval. Residents had fought hard and long for a replacement for the beloved JJ&F Market, which served local families and businesses for 65 years. The council approved a restrictive covenant requiring the grocery store in 2014.
But maintaining a viable market has proven difficult. The first market that moved into the center, College Terrace Market, owned by investors The Grocery Men 1 LLC, was met with fanfare when it opened in 2017, but it closed after six months, in part due to a failure to obtain adequate signage, the owners said at the time.
A second grocer, Khoury's Market opened in January 2019 and operated for about a year, closing this past January. The building had been enshrouded by scaffolding and netting for exterior modifications and repainting, causing an unattractive appearance and reduced visibility, according to the store's owners.
Taffi said Real Produce International Market has a good chance to succeed where the other two markets failed. He can source fresh produce from his wholesale businesses, so the market will offer the freshest products at lower prices, he said.
The family's grocery store in San Jose has thrived even while competing with Trader Joe's and Costco in the same shopping center. Customers of the San Jose store had been asking the family to open in Palo Alto, he said.
"We have invested a lot of money in this business. ... A lot of people think the success of the business will be difficult, but we will bring quality and good prices. We will be the life on the block. It will be a magnet," he said.
College Terrace resident Melanie Grondel has been actively recruiting potential grocers since Khoury's Market closed. She noted that Palo Alto residents had driven down to San Jose to shop at Real Produce, and she was among those who encouraged Taffi to open in Palo Alto.
"It's very much in a JJ&F spirit of a grocery store. They have the basic product line of JJ&F and are very committed to being a part of the community," she said.
Every two weeks or so, Grondel said she looked in the store's front windows to see if anything was happening. One day she met Taffi outside the door.
"We talked about what he is planning to do. He wants to have a nice outside terrace like Sigona's and have sandwiches outside with parasols and seating and a deli and the grocery store with a butcher and fresh produce," she said.
Grondel said she thinks the neighborhood and surrounding community still need a grocery store.
"I walk with a cane," she said, and many people are older or can't drive to a store. Adjacent Stanford University has many young families, and despite the pandemic, there are still many people on the campus, she said.
Doria Summa, a city planning commissioner, said as a College Terrace resident and not on behalf of the commission that Real Produce "seems like a good fit to me."
The property owner has repainted the building and fixed up the parklet behind the building.
Photos of the San Jose store online remind Summa of Sigona's, the Stanford Shopping Center grocer, she said.
"There are tons of fresh produce and a little bit of everything else you might need," she said.
Summa said she hopes the new store will prosper.
"We've had two grocery stores fail," she observed. "I'm really concerned about the finances for a grocer in such a small store."
Fred Balin, who supported the previous two markets, said in an email: "Disappointed twice, but (I) am encouraged by Mr. Taffi’s enthusiasm, track record, and plans. Opening the rear parklet for customers is a new opportunity. If the city stays firm on penalties, the landlord provides adequate signage, shop local is more than a slogan, then the public benefit can be both real and lasting.”
Opening the market in advance of the holiday season is important, Taffi said in an Oct. 9 letter to city Planning Director Jonathan Lait.
"While times are tough right now for so many businesses with (the) COVID-19 pandemic, safety concerns, and increased regulatory restrictions for businesses in these times, we take the long view and have signed a long-term lease for the grocer space at 501 Oxford Ave. We are excited for the opportunity to serve the community. We want to open our doors as soon as possible and if there isn't a delay from the city or county, we would love to open before Thanksgiving," he wrote.
Staff is recommending the council approve the market.
"A stable market at this location has been a long-desired goal by the City Council and neighborhood when it approved the College Terrace Centre development. Having another grocery store that provides essential services and goods to the Palo Alto community is particularly beneficial during the pandemic, which will provide in-store and same day delivery service," a staff report in advance of the Nov. 16 council meeting noted.
The proposal for approval is scheduled on the council's consent calendar, but it could be pulled for additional discussion. If three council members vote to pull the item off of consent, staff is recommending the council vote on the proposal that same evening to help the market's owners quickly open -- if the tenant is approved.
AGB Pact, a partnership between Blox Ventures and Angelo Gordon, owns College Terrace Centre. Jason Oberman, CEO of Blox Ventures, deferred comment on the proposed grocery store to Taffi.
A grocery store is required at College Terrace Centre as a "public benefit." Under the planned community ordinance, the city can levy daily penalties of $2,000 after a cumulative six-month grace period if a market is not operating at the site. The repeated absence of a grocery store at the site over the years has resulted in penalty assessments in the hundreds of thousands of dollars for AGB Pact.
New York-based Greystone Property Development sold the center to AGB Pact for $78 million on June 29, 2018, just prior to when the penalties were due to begin.
AGB Pact has appealed the fines. Some of the appeals are currently undergoing the city's administrative process and others are being litigated in Santa Clara County Superior Court. The council's approval of Real Produce International Market is independent of the legal issues, according to the staff report.
Editor's note: A previous version of this story incorrectly identified the parklet as one of the public benefits required under the planned community ordinance.