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Sunday, December 9, 2018

City Staff Fails at Sherwin Williams Project to Provide Required Retail Agreement

City Fails to Get Sherwin Williams Retail Agreement in Writing

City Council Comes Up as Empty as 
All the Storefronts in Town

Senior planning staff at City Hall revealed last week the retail component of the Sherwin Williams project mixed use residential development in Emeryville's Park Avenue neighborhood has no written protections that would keep storefronts from sitting perpetually empty despite the City Council expressly garnering a guarantee against that made in 2016.  The Council also directed the staff to protect against the developer renting to chain stores, another condition of approval from November 1st, 2016 that was ignored by the staff and now impossible to enforce.  Time has run out for Emeryville to ensure its retail plan at Sherwin Williams is brought forward; the developer cannot at this point be held to providing for non-formula retail at the site or providing against letting the stores sit empty as was established by unanimous Council vote.  "There are no such protections for either condition" a staff member told the Tattler, "nothing is in writing".
Councilman Scott Donahue
He told voters in October 2014:
"We should require developers to structure
rental agreements that provide for subsidies
and other support to help smaller,
locally serving businesses to succeed."

And so goes the Sherwin Williams project down the same path as virtually every other development with retail over the last 25 years; vague promises made by the developers to providing wonderful neighborhood serving non-formula stores in a timely manner, a paradigm that has spectacularly failed.  City Councilman Scott Donahue  summed it up best at the November 1st 2016 meeting, "It has been difficult for our city he said, The chains have more money, but we have a desire for retail expressed by our community, he added.

The loss of a written retail agreement so adamantly expressed by the Council is especially egregious for the Sherwin Williams project, watched so closely as it has been by community activists including by the Park Avenue Resident Committee (PARC).  Indeed, PARC's entire raison d'être is to make sure this kind of thing doesn't happen, specifically at Sherwin Williams.  Emeryville residents would be excused thinking if we can't get a retail agreement that addresses these issues here, we likely can't get one anywhere.

It's been a problem for years here.  Many residential developers in town build associated retail as required by the City but they aren't interested in the commercial rental business and so because the City has never required them to fulfill their retail assurances in writing, the developers simply let the storefronts go empty.  The retail component is chalked up as a cost of doing business by these developers.  Other developers, seeking more traditional profit maximization, will rent their retail spaces out but at the highest rate the rental market will bear.  That generally prices out the kind of retail the residents want, leaving only chain stores.
Amid the exigency of this closed loop paradigm, Councilman Donahue hit upon a new idea to force the developer of Sherwin Williams to underwrite the retail by written agreement with the City, an expanded cost of doing business that actually would deliver, but he and his colleagues failed to follow through, trusting the staff to do as the Council directed.
Councilwoman Dianne Martinez
"Another thing we're hearing from the community 
is the fear of the retail space going empty. 
The landlord might prefer a write-off 
than lowering the rent"
She directed the staff to get it in writing.

The idea that the developers themselves need to underwrite the cost of providing locally serving, non-formula retail has been kicking around in Emeryville for many years but the previous Council saw adding such constraints as anathema to the pro-developer coda engrained at City Hall.  Responding to citizen complaints in 2003, a previous Council attempted to lure better retail instead with a taxpayer subsidy to businesses at the 'Promenade' development, albeit with mixed results.  A coffee shop that received taxpayer subsidies at the San Pablo Avenue Promenade strip mall development promptly went out of business as did a small restaurant but Arizmendi Bakery, also the recipient of start-up help from City Hall has been a success.
The current City Council has so far tried a different approach, attempting to lure the kind of retail the citizens want with a Byzantine system of 'bonus points', an approach that up until now hasn't met with success.  With the failure of the Council to follow up on the staff's directive at Sherwin Williams, the new idea of forcing the developer to underwrite the locally serving retail is an idea that has still not been put into practice in Emeryville.

A viewing of the short video (below) from the November 2016 meeting shows how stark is the recalcitrance of Emeryville's city staff.  The two Council members whom had promised voters to deliver non-formula locally serving retail when they first sought election, Scott Donahue and Dianne Martinez, were adamant.  Councilman Donahue told the staff the developer represented by Kevin Ma of Lenar Development they could lower the rent for the retail if he (Mr Ma) can't find "non-chain neighborhood serving" retail at the market rate and that the rent should go down until it is rented out to the desired tenant.  "We can come up with something simple that they (Lenar) can agree to tonight that would solve this problem and make this a better community." Mr Donahue told the staff.  "I'm all ears to cutting a deal tonight about this" he added.

Emeryville Planning Director Charlie Bryant
Handpicked by former City Councilwoman
Nora Davis, Charlie did not require Lenar to legally
agree to the Council's requirements.  Lenar is free
to leave the Sherwin Williams retail empty
or to rent to Burger King.
Councilwoman Martinez agreed and expressed concern that the retail storefronts not sit empty as so many others have done over the years in Emeryville, "Another thing we're hearing from the community is the fear of the retail space going empty. The landlord might prefer a write-off than lowering the rent"  Ms Martinez said.
The developer however expressed concern that the development process not be held up for anything, "The biggest problem tonight is from a timing standpoint." Mr Ma told the five Council members  'If we would make any amendments to requiring the regulating of the retail tonight, that really throws us off our timeline...  We've gotten to a razor thin timeline with the current approval schedule".  He assured the Council "We will work with the Planning Commission to bring these commitments..." to which Councilman Donahue responded, "I'm satisfied we can say 'no' to your project if you don't come back to us with something definitive in writing that will deliver just what we're talking about."

And then the Emeryville City Council dropped the ball; they never checked on the staff about putting their directives in writing, leaving the citizens with nothing but the same assurances they've always gotten from developers over the last two decades about all the wonderful retail to be coming.  The staff for their part, refused to comment on why they served the developer rather than the City Council they are paid to, "It is what it is" one staffer tersely told the Tattler last week after affirming that the Sherwin Williams developer could rent to any chain store they want to at their project or to not rent out the future retail spaces at all if that serves their pleasure.  It's all up to the developer's whims now.

The November 2016 smoking gun video that 
reveals the Emeryville staff to be recalcitrant.  


  1. I watched the video and its obvious the developer isn't interested in chain store going in there. He wants good quality stores to help his project.

    1. Open your mind the the idea that developers lie....especially publicly traded developers like Lenar. In fact they have a fiduciary duty to their shareholders to lie if it helps deliver a project. It's not illegal for them to lie and that's part of the program. The shareholders expect two things from the executives:
      1) Don't break the law
      2) Maximize profits

  2. What recourse do we have when city staff, paid for by our tax dollars, impairs the quality of our life?

    1. Your only recourse to to tell the City Council you expect better.

  3. Bryant doesn't care about what the council says. He's doing it his way while we pay his salary. He should be fired for this.

  4. I guess "It is what it is," is intended to be a show stopper, but "It ain't what it ain't" is pretty heavy-duty, too.

  5. This is pretty crazy. I don't know why this is too much for Emeryville. Other cities have enacted laws against chains stores. And the empty stores thing is ridiculous. There's no reason why we should have to put up with that. Is it that the staff can't or won't do its job?