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City concern over retail is all talk, no action

Original post made by Marc Fleischmann, Midtown, on Jun 30, 2006

Do you hear that sucking sound? That's all of our tax dollars being sucked out of Palo Alto by the surrounding towns. The city's income is on a downward spiral.

Since we moved here in 1991, all we've ever seen is retail business leave Palo Alto. All the talk by the City Council and city management has been a waste of time.

All the coffee shops, all the restaurants and all the frou-frou French patio stores don't bring in the tax revenue that one big box retailer or car dealer does.

Here's my prediction for the next five years:

Magnussen's Toyota moves to Mountain View. Whole Food's sales drop 40 percent once the Mountain View super store opens. Magnolia HiFi closes due to the Best Buys in East Palo Alto and Mountain View.

Fry's moves to Menlo Park, just north of Palo Alto on the site of the closed auto dealers — plenty of room for a huge building and parking.

What will the City Council say then? That it's time to form another Blue Ribbon committee to develop a plan to save retail.

Comments (2)

Posted by Very Tas
a resident of Evergreen Park
on Jul 4, 2006 at 8:08 pm

The retail crisis has been coming for quite some time.

To your points, I don't see Fry's moving, but I do see Fry's being able to extract major concessions from s city that is going to be desperate to keep Fry's where it is.

Whole Foods is going to do just fine; in fact, Whole Foods Homer St. location is sizzling with new business from downtown housing development. It will only get better as a just-completed nearby housing complex - and others - fill up.

Magnolia Hi-Fi mat well go down. I don't see the payback in a retail environment that has almost no barrier to entry on the electronics side.

Regarding big box retail, Palo Alto IS badly outflanked by it's municipal neighbors. Big box stores that generate sales taxes for their respective municipalities will soon surround our city, leaving little remaining opportunity for large-scale retail to be built here.

So where does that leave Palo Alto? It leaves us with taking the "high-end" retail boutique and restaurant sector, and running with that. The sea change that took over University Avenue will soon overtake other commercial strips in Palo Alto. California Avenue is next on the list of commercial strips that will be beautified and prettied up. Property owners and developers have already begin to see the potential. Rents are climbing, and will continue to do so until a marginal maximum is achieved. That means chain stores, high end boutiques, high-volume and/or exclusive restaurants.

None of this can be called a bad thing; it's just the way our economy will have to unfold, given the failure ofo our city (in the past) to think ahead, and realize that Palo Alto's glory days wouldn't last forever.

In short, the days of the humble, hard-working shopkeeper are numbered. Small, quaint, affordable deli's, ice-cream shops, etc. - i.e., the kind of variated retail that most baby-boomers grew up with - is fast disappearing.

Posted by Billy D.
a resident of Old Palo Alto
on Aug 10, 2006 at 9:24 pm

It would be interesting to see a map of Palo Alto and surrounding cities showing the prime locations where sales tax revenues are generated/collected. What I think you'll find is that each city that sits on our border has cleverly attracted businesses and located them on our border (convenient for the people in that city plus convenient for Palo Altans to get to as well).

Right now we are surrounded by stores like Best Buy, Bed, Bath and Beyond, COSTCO, Home Depot, etc. All big money generators and probably frequented by many from PA. How convenient that a new Four Seasons Hotel is built right on our door step in EPA just as Hyatt Rickeys gives up and leaves town. We need to take a lesson from these other city councils they appear to be doing a good job (maybe elect a few of them to come and help us out. We just need to give them a house and we've done that before . . .).

Sadly some of this is our own fault. As residents of Palo Alto we have been a bit silly and down right snobish in constantly opposing some of the proposed developments. Recently we've let local supermarkets close down or move away by not letting them expand or not finding them a suitable place to grow. People will say there is a new super market coming to town - BUT it is a high priced supermarket so guess what . . . many people will go to the less expensive supermarkets that are sitting on our borders and spend their money there.

There is a lot of NIMBY as well. It's understandable to have a gut reaction to oppose something but we should try and look beyond that and really ask "is it such a big deal? Why am I really opposing this? Will it really affect me?

For some reason we were also happy to let some of these businesses be replaced with housing??? How bizarre is that when we have full schools, we have no money to fix roads, we have no money or place to build a new Police station, etc. etc. So we decide to add more housing that will add more burden to our city including increased levels of congestion and smog from all of the extra vehicles the new housing will bring. extra garbage that we'll have to pay to betaken out of PA because we don't want a public dump in our city.

Is there a plan to expand schools, firm up our basic infrastructure to be able to cope with the influx of people? I can't imagine what El Camino is going to be like once the housing is built on the Hyatt Rickeys space. I guess the new residents will be able to go play soccer on the lovely soccer fields sitting on prime business land just up the road on Pagemill & El Camino. . .

Property taxes!! people will say. Well based on the reports I hear, we don't have enough income from property taxes today so it's likely that any additional taxes from the new homes will probably only keep up with the cost of living increases and additional infrastructure we are facing and it's gets more expensive each year to pave roads, maintain buildings and infrastructure. Then there is still the question about new schools, new police station, etc.

As a city we (the residents)need to wake up and smell the coffee (Ah that should be easy because we have lots of coffee shops, we even approve new coffee shops to be opened close to existing coffee shops so that one of them is going to have to close and move away).

We really do need to think hard about our city's future. It's getting serious. We need to ensure that our city council is capable and able to attract new business to the city and also help existing businesses grow, etc. We need to make this city a busines friendly city not one that businesses would like to move to but can't afford to go through multiple planning and replanning loops then be held responsible for paying for numerous studies studies. Sigh . . it's so easy to go the the city next door and have them welcome you with open arms. Let's not forget in many places it is the local businesses who provide employment, taxes and those additional lifts to the community projects via donations or active support for community projects. They can also attract federal funding to help supplement local funding.

The future is in our hands. It's easy to bash the council (not that they don't deserve it sometimes) but we should each look in the mirror when we bitch and moan about something and ask ourseleves is this good for the long term of our residency in this great city?

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