Promised "Destination Restaurant" Site Sits Empty For Nine Years

 Developer/City Scams Emeryville Citizens 

"Non-Chain Destination Restaurant" Promised for Parc-on-Powell Project Was Never To Be 

5700 Hollis Street
This was going to be a non-chain restaurant 
serving the community.  Instead, for nine years it has been
vacant like so many other Emeryville storefronts.

With promises of a non-chain destination restaurant made to the public from City Hall and a very visible prime central Emeryville location opening directly onto a park, people may wonder why the storefront retail at the ‘Parc on Powell’ project at 5700 Hollis has remained empty since the site was developed as a mixed use project more than nine years ago.  The storefront, over 3000 square feet in size sits below a large apartment block and has been ready for a tenant for almost a decade.  But it remains vacant like so many other empty storefronts in Emeryville, a festering wound on the town’s retail streetscape.  A recent Tattler investigation found there was never any intention to bring a restaurant here despite all the promises from the developer and the City.

A quick check reveals money is the primary reason this has not rented out to any retail tenant.  At $13,000 per month and the encumbrance of a minimum five year lease, so far no retailer feels they can turn a profit at this location at that price.  On top of that, we found out recently the space was built back in 2015 in such a way as to preclude a restaurant, so says Megan Basso of Walnut Creek’s Lockehouse Realty, the retail broker assigned to the address.  Ms Basso has been trying to rent out the space to anybody for years, it’s just that no takers have surfaced she says. 

The storefront sits right on a park, with an outdoor seating
area adjacent to the green.  Perfect for a restaurant.

After publicly made verbal guarantees from Emeryville’s former Planning Director, Charlie Bryant to the whole community that a restaurant would rent out the space, we find out nine years later that was never going to happen.  Plumbing, HVAC and other infrastructure necessary for restaurant use with apartments above, was not designed into the space from the beginning, rendering the space unworkable for restaurant use.

Heading off any opposition from the community for the proposed development back in 2015, the City sweetened the pot by dangling a destination restaurant before the public.  The development proposal sailed through the approval process without substantial community objection.  That might have been the only use of the "restaurant" to the City (and the developer).   

This is the green just off the small plaza fronting the 
would-be restaurant.  Perfect for outdoor dining with kids.
But, protecting the developer, the City lied to us.

Restaurant or not, libertarians among us might wonder why the property owners don’t start lowering the rent until they get any taker; the whole supply and demand thing.  In reality, many if not most apartment tower owners in Emeryville (usually large real estate investment trust corporations) are not interested in renting out their storefront retail spaces and they just write it off as a loss for tax purposes.  It’s the same reason why the Sherwin Williams developer on Sherwin Street  (called ‘The Emery’), Lennar Corporation, hasn’t rented out the retail associated with that property.  After years of promising local neighborhood serving retail at both the Emery and Parc on Powell and after the City of Emeryville refused to get the assurances in writing, now these developers are letting the storefronts sit empty, bringing down the neighborhoods.  

This scenario has repeated itself over and over again over the years in Emeryville.  The only reason why there is retail storefront at each new apartment tower is because the Emeryville Planning Department is forcing the developers to put them in so they can sell the project to the public as a General Plan conforming ‘mixed use’ development.  After that planning box is checked, there’s nobody minding the store (so to speak) and the retail sits empty for decades as the developer takes his tax write off.

Director Bryant has since retired and was unavailable for comment for this story.

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.  

City Calls For More Storefront Retail

Plethora of Pre-Existing Empty Storefronts Doesn't Faze City

City Hall: "We Need More Empty Storefront Retail"

Opinion/Essay

Emeryville's Department of Economic Development has been very busy recently working in conjunction with the Chamber of Commerce and are now calling for among other things, a City Hall facilitated plan of action to deliver more empty storefronts in "neighborhood centers" around town.  This plan, called the 'Economic Development Strategy', is to become policy at City Hall.  It would spend an unknown amount of taxpayer money to "expand retail" and other business promotion.

The plan makes no reference to the vast amount of existing empty and boarded up retail throughout the city nor does it offer any policy change by way of attracting retail tenants to the new storefronts.

The strategy plan as an aside, also calls for putting more cars on our streets and encouraging auto use by improving vehicular traffic efficiency, presumably something good for business.

This is what high rent brings.

It should not be necessary here to chronicle all the cascading negative effects of boarded up storefronts in a town.  Suffice it to say the perception of this kind of blight tends to affirm and multiply it.

Emeryville, it should be noted, has long had an excess of empty storefronts, pre-dating the current recession due to our particular brand of land use public policy. City Hall has by myopic and rigid thinking, pursued a land use philosophy that just about guarantees we will see block after block of empty stores.

"Blight" Irony

The Redevelopment Agency in Emeryville is tasked with what it calls its mandate to eliminate blight.  It is the city council, through the Redevelopment Agency and their narrow, some would say surreptitious agenda that has gotten us to the place where we now find ourselves: awash in empty storefronts.  Perhaps they're incapable of seeing the irony of a government agency, dogged in its fight against blight, instead being the chief agent of blight proliferation.

General Plan Ignored

San Pablo Ave in Berkeley: This is
what cheap rent will get you.

Our $2 million General Plan calls for a policy that would help avoid empty storefronts.  The current general plan and the previous general plan both call for rehabilitating existing buildings, especially historic or architecturally significant buildings but unfortunately in Emeryville, the General Plan always takes a back seat to the whims of developers who are looking to maximize their profits.

Saving old buildings is more than just recognizing the value of the vernacular architecture of the past; leaving some existing buildings as the General Plan dictates, would keep retail rents low since new construction costs usually are added to the financing.  

What retail that CAN afford the high rents tend to be national franchise fast food and mattress stores and the like, something we the people have collectively said is not desirable.

  

Berkeley Model Superior

One only needs to look as far as San Pablo Avenue in Berkeley and its retail renaissance to see the benefits of keeping older, cheaper buildings around.  Berkeley, it seems has figured this out and they've left Emeryville in the dust.  

It should be said that Berkeley's much higher business tax has not served as an impediment to this flowering of resident and pedestrian friendly development.  On top of this, Berkeley is seeing this revitalization of San Pablo Avenue at the height of the recession; further evidence of the wrong-headed thinking in Emeryville.

Since Emeryville seems incapable of saving old commercial buildings regardless of the mandate from the General Plan, a fait accompli really, some other model must be introduced to stop empty storefronts from proliferating as they have been.  Other than simply not building anymore retail, a choice not embraced by the people and made clear in many public General Plan scoping meetings, a new idea needs to rise up.

A New Idea

A different approach would need to see a culture change at City Hall.  This can likely only be accomplished by  changing the ossified old guard city council.  A different council could see how Emeryville has been selling itself short to developers for many years.  A necessary change would involve the council being proactive in pursuing development and they would have to learn how to occasionally be able to say NO to a developer.

Future developers could be welcomed to make proposals for our town but when it comes to providing the street level retail that commonly accompanies the development, the developers must be told we expect the storefronts to be rented, and rented to an approved list of retail types as the General Plan dictates.  Rent could be controlled to make sure our goals are achieved; retail rent would slide down over time as the storefronts remain empty until a tenant steps up.  This rent sliding regime could be initiated in a number of ways to achieve our goals.  Skittish developers can be shown the door.

We need a culture at City Hall where this kind of dissent is not summarily attacked or ignored.  A debate should be allowed, even encouraged.

With the November elections looming, a change-up along these lines could be forthcoming, dependent upon who is elected of course.  Candidates for office should be told in no uncertain terms that new thinking is needed to stop the downward spiral of boarded up storefronts in our town.  Clearly what City Hall and the Chamber of Commerce is offering with the new Economic Development Strategy, is not rational and will only exacerbate this problem that only Emeryville seems to be flummoxed by.  Our neighbors have figured out how to deal with this, why can't we?