Sunday, February 17, 2008

Developer unable to bring Centerville supermarket + Q&A

The latest effort to secure a supermarket for Fremont's Centerville district failed.

Blake Hunt Ventures, the firm picked by the city to develop a 6.6-acre lot near the Centerville train station, couldn't find a grocer willing to anchor a planned retail hub.

Grocers turned down the site, bounded by Fremont Boulevard, Post Street, Bonde Way and Thornton Avenue, because it didn't provide enough new housing developments, according to a city report.

With a grocery store out of the mix, the City Council, acting as the Redevelopment Agency, will consider Tuesday whether to find a new developer or continue working with Blake Hunt on a retooled development.

The firm has proposed either building housing on one-third of the site, or leaving one-third undeveloped for future use either as a parking lot or a different development.

The proposed supermarket would be replaced by a drugstore or a bank as principal tenant.

Council members voted 3-2 last October to enter into exclusive negotiations with Blake Hunt primarily because it was the only developer proposing an all-retail project.

The Centerville Business and Community Association has strongly opposed building housing on the redevelopment site, according to a city report.

The long-vacant site has a star-crossed past.

More than five years ago, a Ralphs was supposed to anchor a new shopping center, but the supermarket chain ended up pulling out of the Bay Area market.

More recently, developer James Tong couldn't find the money for a mixed housing and retail development or a retail-only development with an emphasis on restaurants.

Blake Hunt co-founder Brad Blake told council members last year that landing a supermarket would be easier with the expansion of Save Mart, owner of Lucky, and the entrance of British grocer Tesco in the Bay Area.

Fremont officials said last month they expect Tesco to open a Fremont location. The company was looking at locations along Mowry Avenue and Stevenson Boulevard, Economic Development Director Daren Fields said.

TCV: What has changed?

Blake: We are proposing to develop approximately five of the six plus acres at the site. The undeveloped land would be retained by the city and would be developed in some manner in the future. It was decided to reserve it for better economic alternatives.

TCV: What happened to the concept of a small market on the site? Is this change the result of an unrealistic expectation or a shift in market conditions?

Blake: Probably a combination of both. If you look at where grocery stores are located in Fremont and Newark, the demographics and traffic patterns, from a purely analytical perspective, it appears there is a hole to fill. However, when discussing this with possible tenants, the added business from a store in this location does not appear to entice them. Tesco (U.K.) which had initially shown interest in the site appears more interested in existing buildings around the Bay Area.

TCV: The example being used for a major tenant of the complex is a full service pharmacy. Why?

Blake: This type of business uses a different model and a pharmacy is a bit more neighborhood-oriented. A couple of major pharmacies have indicated interest in that site.

TCV: What is envisioned for the remaining buildings?

Blake: One of the buildings might house a bank. That plus the pharmacy will leave about 30,000 plus square feet. We anticipate a 15,000 square feet of food-related/restaurant business with the balance used by various retail and service businesses.

TCV: Is this still considered a pedestrian oriented development?

Blake: Yes. The ultimate pedestrian oriented tenant is the restaurant. Shops need to have storefronts that interact with the sidewalk and pedestrians.

TCV: Is this proposal a major shift from the initial plan?

Blake: I do not consider this a big change in building tenancy and layout. The major changes are:

No grocery store, but we began with the premise that the 15,000 square foot space would possibly be a grocery store but could be something else such as a pharmacy.

Addition of a 'town green' element

Retail orientation toward Fremont Boulevard without a major internal street.

TCV: Are you still optimistic about moving forward with this site?

Blake: Our interest is in retail development. If the council decides they want to vertically integrate this site with residential units, we are probably not interested. In that event, we will withdraw from the project.

TCV: How do you envision the architectural design for the Unified Site?

Blake: Classic and timeless rather than trendy. We are not trying to create more historic buildings, rather a development that compliments the area.

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