What is Sand Hill to do if no operator will step forward and run a market in the space? Is is Sand Hill's responsibility to maintain a market there even when it is not economically viable? Is this another instance of the City Council stepping into things they know nothing about? Mandating a market where it is not viable to run a market?

I've lived in Palo Alto long enough to see 3 markets close on the same site. If it was a viable location for a market one would be there.

The market closed because it was not profitable. Forcing the developer to lease to another market isn't feasible. Who would want to invest their resources in a venture that fails. If the neighbors had supported the market it might have remained open. There are too many market choices in Palo Alto to sustain the viability of another store. It's too bad. It was a nice store.

Yes. It is their responsibility. If Sand Hill was granted a zone change based on having a grocery tenant, then it is their responsibility to secure (and I would think keep) one.

Residents are tired of developers agreeing to the moon in exchange for variances from the City and then avoiding responsibility. Glad the city council and Planning Dept appears to have the backbone to enforce the agreement.

Fresh Market was a wonderful grocery store and I do believe it was viable, but merely subject to a corporate HQ decision to remove all stores in California.

---The market closed because it was not profitable.

The manager of Fresh Market apparently claimed this was the only profitable Fresh Market store in California. It had to close because the company was pulling out of the state.

I firmly believe a grocery store that takes into account the demographics of the area can be successful at this location (no monster candy isle please!).

I know I am not the only resident here who dislikes having to go to Trader Joe's at T&C, Whole Foods on Emerson, Midtown Safeway, or any of the others further out.

As a number of people commented in previous articles on this topic, Fresh Market didn't close its Palo Alto store because it was "not economically viable". The store was doing fine and the scuttlebutt is that the Fresh Market people were surprised by how robust the Palo Alto business was. However, they found that running a handful of stores in California, with all the rest in North Carolina, was unsustainable, so they closed them all.

In other words: viable location for a small grocery store -- yes. Viability of an East Coast-based company running a handful of stores in California and importing products and management across the country to run them -- no.

So could, in theory, one of our small, local grocers relocate to Edgewood and have a great, clean, new location near the highway? Yes! But is there a single one who is looking to expand or move -- that's a much harder question.

And finally, and sadly due to previous decisions made about the site in years past, the location is too small for a larger national chain like Whole Foods or Trader Joe's.

@ Marc

From the ordinance, it is the developer's responsibility to "ensure the continued used of the 20,600 sq. ft. building as a grocery store for the life of the Project."

If no operator will step forward to run a market because the current rent is not economically viable, then the developer needs to lower the rent. At some level of rent, that place will be viable for a grocery store.

Yes I also miss Fresh Market. We need another grocery store there. Maybe less expensive..... Not everyone in Palo Alto is fluent....

@ Fine them, fine them big. So how is it the fault of the developer that the Fresh Market chain pulled the plug on its west coast stores? It seems like a logical business decision made by corporate executives to cut their losses on west coast operations and focus on profitable locations back east.

Finding a replacement market won't be easy with the abundance of stores within close distance. People investing their capital don't want to take that risk. I don't blame them.

What flagrant violations of what rules did the developer violate? I'm sure they're as frustrated with this deal turned bad as are the neighbors.

"In other words: viable location for a small grocery store -- yes. Viability of an East Coast-based company running a handful of stores in California and importing products and management across the country to run them -- no."


Exactly. This isn't the first small grocery store in a new planned community in PA to close right after the developer built the homes (think Alma Plaza). The owners of Fresh Market didn't close all their California stores on a whim. They must have been considering that for a while. Could it be that the were "encouraged" to open this market short-term in order for the developer to fulfill the "planned community" requirement? The East Coast owners of Fresh Market never made any attempt to target their local market. I've never seen any business less interested in adapting to the needs of the surrounding community despite input from that community. And they were surprised that the store remained viable ? Sure, they never expected or cared about that. One has to wonder why.

@Marc "What is Sand Hill to do if no operator will step forward and run a market in the space?"

Lower the rent, then lower the rent again until it looks attractive enough to an operator. Right now Fresh Market is still paying the rent, so Sand Hill can sit around and do nothing.

Maybe the neighbors/city could approach Whole Foods to put in one of their upcoming 365 stores. See WSJ for more info on Whole Foods 365 stores planning.

All I need is a outfit selling foods, be it a small super market or a group of fastfood joints (like Subway, Round table, etc). With Fresh Market and Ming's being gone, I am having trouble getting a quick lunch or meal udner half an hour.

How about Grocery Outlet? The store on Alma seems to be doing well? Or Piazza's? They are a small, locally owned store with great stuff.
Yes -- developer lower the rent! $500/day fine is $15K/month. Take that off the rent. But, the City seldom collects on these fines. They can only put a lien on the property, and then try to collect when the property is sold. That will be years from now.

Please no fast foods...... Maybe a nice deli , like Eric's or the sandwich store, but no fast foods.....

Too bad Miki's didn't go there. Most likely would have done much better in that location than on Alma...

The Post's story earlier today (undoubtedly the source of this Palo Alto Online article) said that the rent would be $56,650/month, or $2.75-per-sq-ft. That's about three times what grocery stores normally pay. In fact, some landlords subsidize supermarkets because a big grocery store brings shoppers to other retail tenants. I don't think this property is going to be leased at that price. If the city really wants a grocery store there, they have to get the landlord to reduce the rent to $1.50 a square foot, or thereabouts.

And shopping center developer McNellis, who was quoted in the Post about Edgewood, is right when he says this is a viable location. But it's only viable if the rent is low enough to have a profitable business.

Palo Alto now has 3 PC projected tent-poled by a grocery store. All have had problems:
-- Alma Plaza had Miki's that failed. Grocery Outlet, with a very different model than one would have expected, seems to be doing better but the jury is out.
-- College Terrace Center: JJ&F closed shortly after this was approved, and the city had a big hassle with the developer before coming up with a new grocer and plan. HOWEVER, the building was supposed to be finished by "August 2015" (now!), and the site has been a large hole in the ground for several months with no apparent work underway. What is happening with that?
-- Edgewood Plaza: I loved the Fresh Market and went there a lot but I am not sure it was doing all that well. Apparently, the site has been offered to everyone and, even subsidized, no grocer is interested. If Fresh Market was going huge business, wouldn't someone be interested?

So what is going on here? I contend that this is a result of the PC process and there is plenty of blame to go around. My take:

1. DEVELOPERS: Developers glibly make promises that they should know they cannot keep. I think that Sand Hill is actually a good company but they were overly optimistic. Sand Hill built a great shopping center! But developers need to stop promising what they cannot deliver.
2. CITY: The city has a great deal of pride in its abilities to make things happen but they fall very short. True, they can use the PC ordinance to get almost anything built (3 groceries, really!), but what they cannot do is to get people to use them.
3. RESIDENTS: Residents support these PC projects without thinking about whether or not they will succeed. Miki's was the best-reviewed store that no one ever shopped at. I heard many of my neighbors say that they wouldn't shop at Fresh Market (and Alberson's and Lucky's before) for this and that reason.

All three of these groups need to start thinking about the underlying market economics of a project. They are all to blame and should all know better.

My rule is this: if a business cannot make it without a city subsidy, then it won't make it with a city subsidy.

Not true 'Want a Grocery Store.' That particular Fresh Market was making a profit, in fact, more of a profit in just 18 mos than would typically be projected for three years. It was the only profitable store out of the 5 they had in California. The CEO who was responsible for expanding to the West was fired, and the new CEO wants to concentrate on the East Coast development instead.

I miss Fresh Market every day. Hoping they don't put in a Ranch 99 or Mi Pueblo. Those stores start out clean, wind up looking dirty. Trader Joe's is too limited, no butcher or baker or candle stick maker (sorry, couldn't resist.)

I wish another market like Fresh Market would move in. Something with the community atmosphere, nice deli and meat selections that have no injections of anything unhealthy. It was nice to get lunch and sit outside, or grab a small cup of coffee and do a week's shopping there.

We have nothing else like it but Whole Foods. Safeway is now operating with a different grocer, and I'm sure people have seen the difference. It's going downhill fast. We need something that's not as expensive as Draeger's, and not that's not ethnically oriented. A nice basic market with the staples everyone needs with good meat dept. and produce would be amazing! Just like what we just lost, but with more everyday goods.

fresh market's products weren't great and the staff always had an attitude. Not a good combination for repeat business.

I supported this development and the developer, and I have been very disappointed. The lack of action over these months is not encouraging.
It is really hurting the center to not have Fresh Market or a similar store there.
I like the "look" and design of the center although when the market was open, it could have used more parking.
It might have been better for the developer to propose what he wanted in the first place, and the city to evaluate the proposal on those terms, rather than play around with "PC zones" and special deals, that always seem to fall through when it comes to the public benefits down the line/in practice.
They are making a TON on the sale of the houses there; little incentive to sort out the shuttered grocery store situation; but we nearby residents DO suffer from this situation.

In the meantime: Can we bring back the Edgewood Eats food trucks? Those were great times!

Location, location, location.

We used to go to Fresh Market just because they sold one type of hummus that we liked quite a bit. Unfortunately, everything else in the store was overpriced (even by Palo Alto standards). So, our trips to Edgewood were few and far between because we just couldn't justify the trip (or traffic) for a single container of hummus.

Personally, I think that Edgewood Plaza could be easily turned into office space or "affordable housing" -- since this is what Palo Alto seems to pushing for anyway.

Fourth generation........ Seems like greed is happening. What happened to Palo Alto??? Whose selling the land, leasing the land?? Profit .... Profit!! Where do these developers come from ?? Does anybody who lives in Palo Alto own their own store anymore? We keep losing all these stores. Who remembers Purity? Co-op?? Pills Bros? Ben Franks? Bishops Creamery? Monet's? I could go on. Thee was a little store on Channing now it's gone. Fran's is gone. Just makes me sad.....

>> 38 year resident a resident of Old Palo Alto
>> The market closed because it was not profitable.

According to articles I read here, the Fresh Market closed
it's parent corporation expanded into California and the West and
did not do as well as they though they would ... but the Palo Alto
store was profitable is what was reported here I believe.

That does not mean that a grocery store in Edgewood Plaza
would be untenable or go out of business.

I had never heard any reason that Lucky or Albertson's went
out of business in that location, but any time I had ever gone
there they were much more busy than Fresh Market ever was.
If anyone know the history of this location let us know.

++

I think imposing a daily fine like this is OK if it is per the terms
of the contract, and the developer seems to be doing nothing.
They are big boys and they knew what they were doing when
they signed.

++

Also, what was the supposed building they demolished that
was an original Eichler. Everything seems pretty much as it
has always been in that location, in fact it appeared to me
when I visited for the first time that they had not done
enough.

Maybe this location would not be so hard to lease to a market
if they had gone ahead and done an actual rebuild so it
could have been larger or had an underground or rooftop
parking lot like Whole Foods or Safeway in Mountain View.

Thinking outside the "box":
As I have seen in Paris, why not encourage a managers of farmers' markets to open a permanent indoor farmers market?

The small stores in the shopping center are faltering, because of the loss of the market. The developer doesn't care. He is still getting rent from the market (even though they are gone) and selling the condos for high prices. This is a case of another developer tricking the city council and city staff. When will the city learn that developers outsmart and trick them...every time! The staff is naïve, doesn't do it's homework, and is generally out of its league when it comes to dealing with shrewd developers. Planning Director Gittelman and City Manager Keene needs to be relieved of their jobs.

>Maybe this location would not be so hard to lease to a market
if they had gone ahead and done an actual rebuild

Yep. The absurd demand that those old Eichler junkers be preserved was an indication that this site would not become economically viable. Reminds me, somewhat, of the old historical homes fiasco that was perpetrated on my (and other) neighborhoods...it was eventually reversed at the polls, but the mindset that created it is still (barely) extant...and they can do extensive damage to a neighborhood.

The Planned Community (PC) process is broken. It never worked, it was always a shell game run by the developers to break the zoning codes. The community benefits never developed and were never enforced when they did not develop. The City does not even know all the promised "community benefits" that were promised let alone that were met. Only recently have people started to catch on after being taken once too often. The last con was a step too far and actually got council members voted out of office. But hold on, the council wants to bring back the PC process. Seems the developers need to break some more building codes. Don't let them do it.

This is back to what we
We need a decent full sized grocery store in Palo Alto. We get boutiques that fail. This site would have been great for a full sized store, right beside the freeway and on the way home for so many people.

I agree that if there is no grocery store here then the other stores are going to struggle.

I don't just blame the developer. I blame Palo Alto officials with lack of foresight and common sense.

Sorry, half my first sentence disappeared.

This is back to what we need versus what we get.

I've said it once and I'll say it again. We need another market, but not an upscale boutique market. We have enough of those in Palo Alto. However, I think the space is too small for a traditional grocery store.

Currently, nearly a third of Palo Altans are Asian. A Nijiya market or a Ranch99 would do very well in Palo Alto. They're mainstream enough to serve everyone yet carry enough harder to find Asian food supplies that they're an attraction. Do it.

I'm betting on 365...I wouldn't doubt that there's was a very quiet deal made not that long ago...didn't want to tip TJ's or the other competitors.

I expect that Sand Hill will get another grocery store.

Then it is up to the community.

People who want a grocery store there should strongly consider shopping at the new store despite whatever objections they have.

The city will not forever try to enforce the PC terms (or the CCR's left over from the original construction). If grocery stores are not viable there, eventually something else will be done with the space.

Once again the city is reaping what it sewed, thanks to in competent past and present councils, so-called preservationists and micromanagement run amuck.
For decades our council has refused to allow the free market to work in palo.alto-- large supermarkets must be banned so that vocal neighborhoods would have protection for their dumpy little market. So we end up with substandard, under stocked, dingy grocery stores ( midtown Safeway, for example).
Now you want a market to succeed in a location that is way to small for any national chain to even consider. So we end up with an empty space.
What is even more laughable is that some people want miki, after his rousing success at alma village, to run a market at Edgewood.
And of course, we havE the " everything is historic" crowd who felt that the run down insignificant structures at Edgewood should be preserved. Why? Because Richler was involved!!!! ( everyone take a mi ute to worship Richler in silence)!!!
This was a recipe for disaster from day one.
But let's compound the matter, by denying people the right to buy a home they want and need in order to somehow get revenge on the evil developer.

Grocery Outlet is doing fine, in the location where Miki's failed.
Possible reason: Not pricy, Upscale selection. Just what average folk need frequently.
Smart and Final may not be trendy, but it is something that is not in the immediate area (Mt View or Redwood City are the closest)?

I would like to see an Asian grocery store ( ranch 99, for example). But I have the feeling that ethnic stores are discouraged from opening in Palo Alto.

Perhaps the lack of public benefit ( compliance with the PC ordinance ) at Edgewood in conjunction with the willful destruction of the historic building that occurred should call into question the reputation of Sand Hill Properties ?

Sand Hill is currently seeking approval for a development at 1050 Page Mill Road that went to the architectural review board last Thursday. They are asking for more replacement square footage than is allowed.
The ARB did not see the square footage issue as in their purview, and understood both the planning commission and city council ( better equipped perhaps to discuss the issue ) would be reviewing this project, but all ARB members questioned the city's analysis of the size of the development, one commissioner called the analysis provided in the staff report "inflammatory" while another said " it didn't past the smell test"!

PC developments are on hold in Palo Alto. The zoning should be seriously rethought or abolished as so often it does not deliver promised benefits to the public and makes millions of $$$$ for developers.

All projects, PC projects or not should be brought forward by staff for public review only when they are compliant with the law and the municipal code. Applicants of large projects should not be given preferred status to skirt the law any more than any one else .

Applications like the current one for excess square footage at 1050 Page Mill road must not be approved if they "do not past the smell test" !

These oversized projects should not even be brought forward by staff for public review unless they are 100% legal or openly applying for some kind of legal variance.

"Perhaps the lack of public benefit ( compliance with the PC ordinance ) at Edgewood in conjunction with the willful destruction of the historic building that occurred should call into question the reputation of Sand Hill Properties ?"
The rundown dump that was destroyed was not historic in any way shape or form. Sand hill should be applauded for ridding the city of an eyesore.
Sand hill did comply by having fresh market as a tenant. The fact that the company HQ decided to pull out is not the fault of the developer. The fact that the developer cannot find a new grocer speaks more to the fact that retailers see Palo Alto as retail poison, when it comes to grocery stores.

An ethnic the grocery store in that location would be a disaster. Its location is central to people going home or coming into Palo Alto, to companies down off the Bayshore and the neighborhoods. A one note store would not serve enough people, those stores tend to get dingy and dirty and they do not have enough prepared food like Fresh Market had. Employees there were very nice, never had a problem with anybody. I was in that shopping center at least 3 times a week when Fresh Market was there I haven't stepped foot back in that shopping center since they left. The indoor farmers market sounds pretty nice. If it's kept clean.

Gorcys response to the suggestion of an Asian themed store is exactly what I expected from a palo,alto resident. Perhaps Gorcy should visit the ranch 99 on grant road to prove how wrong he is.
Let's be honest, no big national chain will take a substandard space like the one at Edgewood. When the only thing Palo Alto,has to offer is space for a small, under stocked store, they will end up with nothing. While wanting neighborhood serving store sounds nice, it is losing situation for the majority of people that want well,stocked, clean, large shopping choices.

I am shocked! Shocked to learn that yet another planned community / massive developer concession has turned out to be another pile of **** for the community, and a pot of gold for the developer.

#duplicitous city manager

#complicit city council

Maybe they can apply the fine to the rent, so if it stays empty long enough it will be quite attractive for a grocery.

@Agenda - For every mega-safeway on the peninsula, there are dozens of successful markets in comparable or smaller spaces than Edgewood, some local, some chains (e.g., Trader Joe's, Sprouts, Fresh n Easy). I agree PA needed a mega grocery, but Edgewood wasn't the right location for it, alma was.

I personally like Fresh Market. Maybe Fresh Market was viable, maybe not; I don't have that insight. However, whenever I went there, not a lot of people were shopping, and even those people were not necessarily buying a lot of groceries. In fact, the only time I found the store truly busy was at the end, when it was liquidating its inventory.

I would love to see a grocery store here; I don't anyone who doesn't. However, getting one to move in and stay seems to be a challenge. If someone found a solution, that would help our neighborhood and our city. A concerned neighbor sent out the following email to the Duveneck-St. Francis Neighborhood Association group. This is a pretty long list of "NO THANK YOUs":

"Many of you have asked about the prospects for a new store in the space formerly occupied by The Fresh Market. The developer, Sand Hill Properties, reports that the search continues. The City requires that the new anchor be a grocery store. Below is the list of stores who Sand Hill Properties have contacted over the past several months--all of whom have, unfortunately, declined.

Raleys
Trader Joes
New Seasons/New Leaf
Smart N Final
Draeger’s
Andronicos
Safeway/Albertson’s
Grocery Outlet
Mollie Stones
Roberts Market
Roxy’s Market
Sprouts
Whole Foods/365
Milk Pail
Miki Werness / JJ&F
Berkeley Bowl
Monterey Market
Ranch 99
Marina Foods
Zanotto’s
Bianchini’s
Willow’s
Country Sun
Canyon Market
Bi-Rite
Sigona’s

"As you will see, The Milk Pail is among those *not* currently interested in expanding to Edgewood Plaza. If any of you know Steve Rasmussen of The Milk Pail, feel free to encourage him to reconsider!

"Additionally, Sand Hill has reached out to these stores but has not received a response; they welcome your help in brokering a connection if you know someone there.
Bristol Farms
Lunardi’s
Piazza’s
Country Corner
Key Markets
Mulberry’s"

@Gorcy, as @Agenda points out, you have a narrow-minded view of ethnic stores when you call them dingy and dirty. Some are that way (Marina Foods in Foster City/San Mateo comes to mind), but so are certain "mainstream" chains. I can also easily argue that 99 Ranch has gone mainstream and attracts diverse clientele, and it is professionally run. However, I agree with you that it is not a fit for this site. It's a moot point anyway. As you can see from my previous posting, 99 Ranch already declined.

We shop at 99 Ranch on Grant Rd. because of their prices. We also shop at the Indian grocery stores in Sunnyvale like India Cash & Carry. However, based on my conversations, one reason why such ethnic stores would not appeal to our neighborhood is because people want high-quality, locally produced, organic produce, among other things. More often than not, this comes with a high price tag (sadly). Ethnic stores want to offer value for a lower price.

Doesn't really matter if any of the usual suspects want to run a market there or not. If that's what Sand Hill agreed to, their job is to get a market installed there even if it's a money loser for them. Perhaps there's another concession they can offer. 450 parking spaces and a shuttle bus downtown sound good to anyone else?

Makes you wonder which staffer wrote the PC contract. If it's enforceable: enforce it. If it's not enforceable: find out which genius gave away a bunch of concessions for free.

The only ones who are making a great profit now are the Sand Hill Property people~ and they are laughing all the way to the bank. Bend over Palo Alto and tie up your shoe strings............... What a mockery to the City, to the residents. You don't go into a contract, hurry to fulfill the work you want done~ almost to completion~ and then boohoo you can't finish because of this or that. For starters, fine them. I hear hitting people in the pocketbook usually works ( even though they can afford to pay a piddley fine~ "oh ,ouch"...) BUT will NOT be collected until the property sells? Some things here in Palo Alto really stink......and it's not the Palo Alto Refuge in the Bay Lands either.**************Thanks Gail (above) for this summery.."The developer doesn't care. He is still getting rent from the market (even though they are gone) and selling the condos for high prices. This is a case of another developer tricking the city council and city staff. When will the city learn that developers outsmart and trick them...every time! The staff is naïve, doesn't do it's homework, and is generally out of its league when it comes to dealing with shrewd developers. " The End.

Truthseeker--thanks for blowing a large whole into the claims of the anti-development crowd that falsely claim the developer is not trying to replace Fresh Market.
I, for one, am not at all surprised that the long list of grocers has said no to Palo Alto. Palo Alto has long had a reputation as being anti-business and for putting roadblocks in the way of those that do attempt to open in Palo Alto (the gourmet hotdog place is but one example)
However this presents an opportunity for the local crowd, including many of the council members, that moan and groan about the lack of mom and pop stores and the influx of "chain" stores. Holman, Filseth, Dubois et al should pool their resources and open a grocery store at Edgewood.

They didn't say no to Palo Alro. They said no to the rent.

"They didn't say no to Palo Alro. They said no to the rent."
Care to actually provide proof for this claim?????

Anonymous,

In theory you are right that Sand Hill must supply a grocery even if they have to subsidize the operation and lose a lot of money.

In practice, I doubt that it will play out this way. If, after a number of serious attempts, the developer argues that the community just doesn't want to support a grocery store, I think it likely that the city will find a way to allow another kind of business into the property.

Follow the money. The city craves new revenues more than anything else. Grocery stores simply don't pay much sales tax since most food items are not taxed. The city has a built-in incentive to get something else into the space.

As to the residents, they will tire of the hassle and decide that, after all, a grocery store was not a winning idea.

My guess is that there will be one more serious try before everyone gives up.

Again: if you want a store, SHOP THERE!

Sounds like an Alma Village redux. There's a Grocery Outlet doing well there now when Miki's failed.

Putting pressure on the developer is the only way to ensure you'll have a market. The right one will success. If the developer can't sell the homes before a market goes in, they'll manage to deliver. It's all about the money.

They should check with New Leaf. It would be a great addition to Palo Alto.

Elizabeth,

Putting pressure on the developer is useful but the real question is: will people shop there?

Underlying market economics really dictates what happens about these things.

Elizabeth--perhaps you should read truthseekers posting. New Leaf is one of the many grocers that said no thanks to Palo Alto and it's anti-business environment. Too small and bad location is a no go for most of them. Plus many of them have stores in the area--does not make sense for them open at Edgewood and siphon off customers from other locations.
But by all means, let's prevent families from buying a home they need. That will show the evil developer
I say again, the best solution is for a local venture--it will be mom and pop and not a chain store. If they could only guarantee no traffic, then the council will be in heaven

Good point, Robert. Everyone was cooing about having a Miki's at Alma Village, but apparently no one shopped there. And he did not have to pay any rent either!!! Hard to believe the city wants him back at the old JJ&F or Edgewood

The new units at Edgewood are not family oriented with no yard and in
that location. More than half are indicated as sold but are any of them
occupied? None seem to be for rent either. Who are the buyers here?
As for the shopping center, the traffic chaos surrounding the Shell
station at Bayshore,Embarcadero, and with cut-through traffic through the shopping center on the narrow lane to St Francis is dangerous in the mornings especially around the Starbucks. All this, and there is no market
even there.

@anon

"PC developments are on hold in Palo Alto. The zoning should be seriously rethought or abolished as so often it does not deliver promised benefits to the public and makes millions of $$$$ for developers."

It seems to me that having Planned Community zoning or a functional equivalent for affordable housing projects still makes sense. The housing itself is the community benefit.

>It seems to me that having Planned Community zoning or a functional equivalent for affordable housing projects still makes sense. The housing itself is the community benefit.

Jerry, you and I fundamentally disagree with respect to subsidized housing. It was originally sold as housing for essential jobs in Palo Alto (police, fire, teachers). Almost none of those people make incomes that qualify (nor do they, necessarily, want to live where they work). Subsidized housing subtracts from PA, it does not add. PA should put an end to it...liberal guilt is not a reason to support it...if it were, then the elite limo libs in PA would offer up their own neighborhoods. Which elite neighborhood will raise its hand first, in our opinion, Jerry?

@six of one - there has been a market operating in the edgewood space for decades. The space has been substantially upgraded. We know the rent per square foot is high. What makes you think rent isn't a primary concern for the grocers who have declined? Do you think they would decline if the rent was 0?

@Robert Smith - of course a money-losing grocery is a problem, but the root cause is some genius(es) traded off an economic benefit to a developer for a specific benefit in exchange: a grocery.

A grocery, which many people are now debating may or may not be needed and may or may not be a benefit if it does or doesn't sell the items they want at the price they want to pay for the items.

Since we haven't seen the agreement we have no idea if the developer agreed to "continuously provide full-service grocery availability for the lifetime of the project" or if he merely agreed to have "a grocery-operating business as a tenant at the time of final inspection.” Or to make “best efforts to offer grocery services.” If it's the latter two, then what genius made that trade? If it's the former, I'm sure once we know how big a subsidy it would take to bring a grocer on the site we can start negotiating with the developer to find an equal-value benefit. Quite likely if Sand Hill told Safeway "We'll pay you $1M / year for ten years to put a store on the site," Safeway would say "Yes.” Then we can tell the developer what we’d like for $10M as an alternative.

That's kind of what free-market contracts are supposed to do: bind parties to perform.

Anonymous,

I believe the ordinance passed requires a grocery for the lifetime of the project. I think this is a public document.

Something like the scenario you suggest may well end up happening after some more time has passed, with the developer paying something to the city (not the residents!) to get the ability to repurpose the space.

A complication (in only the case of Edgewood) may be that a group of the residents have a right to oversee the use of the space. Eventually, they will grow tired of the situation however.

I guess I am coming back to my basic point: if a business cannot survive without a city subsidy, then it is very unlikely to survive with one.

@Robert Smith - agree with your analysis and agree this is the problem with a PC requiring a specific business with no easy recourse for nonperformance.

Sadly the developer will probably get a wrist-slap $250K "fine", will repurpose the building as under parked offices at 4X the rent a grocery would pay and will pass the $250K fine on to the first tenant as an "occupancy fee".

Slow down-- I would venture to guess it is a combination of many reasons:

Too large or too small a space ( mentioned in the Daily Post story), the rent, the location, no desire to cannibalize same area stores from the same company and who knows they may also recall the miki fiasco, or maybe palo,altos reputation.
And having zero rent does not mean success-- look at Mimi's sad run-- no rent paid and they still failed.

@Agenda - We know the rent paid by Fresh Market, which Sand Hill is still collecting, was relatively high. We know a market operated for decades in the same location, in much worse conditions. So not sure why a market couldn't operate there now given a low enough rent. I agree the Palo Alto reputation is bad for doing business, and the looming threat of minimum wage increase isn't going to help motivate a grocer to move in.

Slow down-- also remember that when the market operated at that location there were no large, full service, clean, well stocked grocery stores on both borders of Palo Alto. Things have changed here. We no longer have to shop at our local u dee sized and/or over priced stores. The days of making sure that JJ&f having no competition are over.

Opening a New Market location is an incredible amount of time and work and huge up front cash outlay.
I know, as I installed POS systems a number of years ago for some of the names on both lists.

Weeks of just stocking shelves (assumes shelves are now in place.)
Then there is a chance, that their market does not fit with the client and it fails.

Some of those names make little sense:
They have a PA location.
The store is too small to fit the corporate plan.
The 'brand' is too high end for MANY nearby residents.
Some may simply not want to deal with the issues of crossing a county line.

@Craig Laughton

"It was originally sold as housing for essential jobs in Palo Alto (police, fire, teachers)."

It was always a mistake, in my opinion, to dwell on those three occupations when making the argument for supporting affordable housing. When I hear politicians support affordable housing by pushing the police, fire, educator line, I cringe. Some households with members in those professions do benefit from affordable housing programs, including BMR home purchases, but without programs targeted specifically at them I don't think their percentage of households benefiting from affordable housing is high.

I don't hear that argument much in Palo Alto, where: a) public employees are pretty well paid, and b) much of the public understands that without some affordable housing all manner of residents who make valuable contributions to our community will vanish from our midst.

To the point of this thread–disappointment with the Planned Community process–almost all local politicians I've heard speak about community benefits over the past two years have been careful to distinguish affordable housing from the trivial or unrealized benefits of other kinds of Planned Community projects. I agree with them.

SteveU is raising a very important set of points.

Grocers are not going to want to enter into something without thinking about it, opening a grocery store is a lot of work.

It is not just about the rent being charged, it involves a lot of strategic decisions for a grocer. It takes a couple of years to establish a new store, and this location is now perhaps tarnished.

Look, it's pretty simple, when you are trying to rent a location, whether it is commercial or residential, and no one is interested, you have one lever to pull, price. The problem is that Sand Hill has no incentive to lower the price because they can sit around and do nothing and collect the current high rent from Fresh Market. If you really think rent is irrelevant, then we are doomed to a derelict mall again.

Sand Hill Properties are big boys. They knew the grocery store deal when they proposed it originally to the City. If they committed to a grocery store in that space, then then Sand Hill should provide it or face the consequences.

So for all the complaining about the current situation, I suppose you all would have preferred the previous situation of derelict buildings that were falling apart?

If a developer promises a grocery store in exchange for various, and valuable, zoning changes, then it must be incumbent on the developer to do what ever is necessary to keep a viable grocery store on site. Lower the rent, make parking easier, offer discounts to neighbors, adjust hours.

The fact that a developer did not correctly estimate the cost of compliance is no reason why the neighborhood should lose. Require the developer to sell to a landlord who will be able to comply with the requirements. If the developer goes bankrupt then maybe the next developer in Palo Alto will not promise the moon to the residences knowing full well he will never comply.

Is the city council complicit in this by knowing they will not enforce the contract? This attitude just perpetuates profits for the developers at the expense of the residents. Since this has been going on for 50 years, the city council must know the results will be of their approvals.

>To the point of this thread–disappointment with the Planned Community process–almost all local politicians I've heard speak about community benefits over the past two years have been careful to distinguish affordable housing from the trivial or unrealized benefits of other kinds of Planned Community projects. I agree with them.

Jerry, if you are right, then the elite (liberal) neighborhoods should be standing in line to welcome subsidized housing. Which ones are at the top of list, in your opinion?

First, I wish to thank Robert Smith and SteveU for bringing up the really important points as always. I look forward to reading your sensible commentaries.

I would like to interject that I think the LAST store that is needed in that vacant space is anothe Whole Paycheck! A Smart and Final, another Safeway, or another Grocery Outlet (and in a more accessible location, at that) would be great. However, in all fairness, a Nijiya would be great! Even a Ranch 99; I think a lot of Asian customers would find it far more convenient than going all the freaking way to Mtn View or RWC or Cupertino!

It may take negative rent to get a grocer! At some point it gets attractive enough.

@SteveU

Grocery Outlet is upscale?!! What is lower scale than this? a taco van? If this is indicative of the people who speak their opinions in Palo Alto, soon the whole city will be full of dumps!

so, how long does FM have left on the lease before Sand Hill has the need to find a replacement?

Larry Kavinoky,

Your comments are a fair but legalistic reading of the situation as I understand it. The developer contracted to supply a grocery store, and so he should be required to conform or held in breach. End of story.

Maybe.

I feel exactly this way about the College Centre development because of the way in which that developer proceeded. However, I think Sand Hill and Edgewood are a bit different.

In the case of Edgewood, the neighbors used the CC&R's to enforce their vision. Both the neighbors and the developer should be credited with building a beautiful center. But, the neighbors and the city absolutely insisted upon a grocery store. This was virtually forced on the developer, who also found a good grocer.

Everything I have seen of Sand Hill is that they are trying hard to do what they were told to do, rather than trying to manipulate the situation.

Also, the strength of the neighbors' role in forcing a grocery store needs to be considered. People seemed to have asked for something that they wanted to EXIST without any idea or commitment that they would actually use it.

I do want the developer held to find another grocer and give this a serious try. Frankly, I think the onus of responsibility is beginning to shift to the community to actually use the store.

My family had used the Lucky/Albertsons for about 80% of our shopping. People didn't use that store, and it was the biggest loser in Albertsons' portfolio when they shut it down. Ok, maybe some good reasons.

We used the Fresh Market for about 40% of our shopping, which is great considering the prices and limited selection. Yes, they could have done better at the selection. But, I heard a lot of people say that they were "happy to have the new store there" but "wouldn't be shopping there much" for this reason or that.

If we get a store, I think it is now up to the residents to use it and make it a success. I cannot see holding the developer to forever providing something that people just don't seem to want, especially considering the role that the neighbors and community played in this process.

Use it or move along to something else.

Carlos, I never said Grocery Outlet was up scale.
Upscale is just not my kind ((or in budget) of store.

I am trying to avoid specific names (protecting any inside information I might have gleaned).

I have performed POS work at 9 on the list.
I helped (POS Install/setup) Open new or new ownership, on at least 8 stores (5 on the list, 3 of those have failed, not for trying. They miss judged their neighborhood appeal. At least 1 had very lean times recovering from a much needed remodel.)

IMHO Lucky/Albertsons were a good fit (Edgewood and Alma). The problem was PA blocked all attempts to keep the stores current. Finally, corporate gave up.
Don't you think, they (those on the list) don't all know that dealing with PA is a money sucking PITA?

Well stated, Steve U. Your last paragraph is spot on.
As I stated before, PA is reaping what they sewed. This all goes back to the desire of the council to micromanage the free
market and protect a certain neighborhoods little grocery store. Also of interest is one of the grocers that protested a larger store at alma plaza, saying that that 20k square feet is big enough for a grocery store in Palo Alto is not larger than that side. Why bother grocery shopping in Palo Alto, when you have so many well stocked stores in our surrounding communities?

The Planned Community zone has been corrupt for many many years; not broken, corrupt. The city does not enforce the agreements. It checks the statue in front of the Sheraton, yes that's a Public Benefit and others like it.

It's been said above, SandHill is laughing all the way to the bank. The grocer is still paying rent and SandHill is making MILLIONS on all the houses they let him build.

The bizarre design of the parking lot is no accident, it is SandHill's idea of a parking lot. I avoid it and rarely shopped at the market except when I needed gas as well.

I would great if Mollie Stones or Grocery Outlet could move over to the Edgewood location.
I think Grocery outlet would do very well there, and their trucks wouldn't have to park in the center of Alma to restock the store everyday - (fault of the planners and developers, and not the grocers). The Edgewood property has a rear loading dock backing to the feeder road. It was a good original design and easy access on / off the freeway.

The developer should drastically reduce his rent to save his property from potential vandalism, or having the other stores leave in fear of this.

I know Raley's did not want to consider this location due to the size restrictions. They didn't think it would be worth it. I tried hard to get them to reconsider many years ago.

Maybe a lot other people can ask (beg) Raley's/Nob Hill Foods to reconsider, and put a satellite store there. Their real estate headquarters are in Sacramento, but you can email them just as easily. Their email address is on their website.
I am sure Sandhill would love having them at this site too. They would definitely keep the property up.
We (as a community) need to convince Raley's to think smaller - that the profits would be there in a smaller store.
It been years since I last spoke with them, and perhaps they might reconsider if asked again.
It takes more than one older resident to convince an entire corporation.

I confess, I rarely used Mikis or Fresh Market - But I appreciated having them there.

The few times I used either was because they were handy on the way home to stop for a couple of staples I was low on or something for a quick meal when supplies at home were low.

These places were just above the convenience store for me. I could run in quickly, get what I needed, perhaps see an impulse buy or two, and get out and on my way as quickly as possible. They were not what I needed for major routine shopping trips. I strongly feel that most of the shoppers that used these were in the same category. I have never used Grocery Outlet because I am told that they are very hit and miss in what they carry. They are possibly a destination store for those who need rock bottom prices and can stock up on what they have available.

In the UK, one of the largest big name stores, Tesco, started Tesco Express in neighborhoods. These stores are stocked with exactly the convenience store items that people may need in a hurry, bread, milk, breakfast staples, quick dinner staples. They have now become a brand within a brand.

I agree that for a grocery store at Edgewood needs to be used to be successful. However, don't expect people to use a boutique store when it doesn't fulfill their needs. I myself appreciate a convenient place on the way home to use when I run out or plans change. I prefer a full service supermarket for routine, regular shopping, and I drive out of my way, out of town for that.

We do need both styles. The closer to Edgewood people live the more likely they will use it. Ask those local residents whether they want an express convenience store, or a boutique that may be pricey or not fit their niche?

Resident,

I like your thought process here.

People need to be thinking through what their real needs are and whether or not they will use a store, or what kind of store they would use and how much they would use it.

I live in Palo Alto (Edgewood Plaza neighborhood)and work in Redwood Shores.
Having to go to midtown or downtown or T&C on my way back from work is such a hassle.
Was really disappointed when FM closed down.
Now, I stop by at Nob Hill in RWS before I hit 101.
they just renovated that place and it is *exactly* what we need here at Edgewood (ok, we could with a tad smaller one!)
I encourage you to visit the place and email Raley's/Nob Hill HQ.