Marin Retail Buzz

Marin retail sales bounce back

2012-01-20T16:11:00.000-08:00

After dragging along in a recessionary style for much of the year, retail sales in Marin got a very welcome boost upwards at the start of the holiday season. Distributions of the 1% sales tax to Marin's cities increased sharply to just over $3.2million in December, the highest monthly total since February 2008.

Nordstrom approved for 17,000 sf expansion

2012-01-20T15:53:00.000-08:00

The Town of Corte Madera has approved Nordstrom's plans for a 17,000 square foot expansion of it's store at The Village Corte Madera. The expansion will occur largely within the footprint of the existing store, which will be reconfigured to provide approximately 64,000 sf over 2 levels. The store currently has 70,000 sf on the first level and 40,000 sf on the upper level.

At the other end of The Village, Macys is working on plans to expand by approximately 20,000 square feet.

New CVS in Tiburon

2012-01-20T15:31:00.000-08:00

Construction in progress on the new CVS in Tiburon.

Peets eyes Tiburon for new store, while CVS pushes forward

2011-12-20T12:40:00.000-08:00

Peets Coffee and Tea has received planning approval for a new store in the Cove Shopping Center in Tiburon. The coffee shop will take the space previously occupied by Blockbuster. Retailers at the local shopping center have been struggling since the departure of first DeLano's market and then Blockbuster video earlier this year.

While Peets will draw a lot more traffic to the center, the news is double-edged for Sweet Things bakery, which has a robust coffee business, and Hearts and Flowers, which also sells coffee. As reported in the IJ:

Marsha Laske, who has co-owned Sweet Things for nearly 35 years, said coffee represents about 15 percent of her business, but she worries Peet's could also cut into her sales of baked goods. "I would not think it would be so good for either of us, quite frankly, when you have a very small population in a very small area where you have two businesses that are almost identical," Laske said.

Meanwhile, in downtown Tiburon, the new CVS drug store is moving forward, though not without ruffling the feathers of a few local residents, who are objecting to the store's large illuminated sign. As reported in the Ark:

More than 125 Belvedere and Tiburon residents have signed a petition demanding that CVS/pharmacy not be allowed to have a large, illuminated plastic marquee sign above the store.
The online petition drive was launched by Marcia McGovern of Belvedere, who earlier expressed her ire over the town's decision to allow CVS to remove the row of mature stone pine trees along their Beach Road and Tiburon Boulevard frontage.
"A 21-foot-long and 3-foot-high illuminated, red plastic, 'marquee' sign … is not in keeping with the small-town character and charm of Tiburon and should not be allowed," her petition language reads.

Disgruntled residents aside, the town of Tiburon can't wait to get these new stores up and open. Tiburon has by far the poorest performing retail sector in Marin County, with sales tax revenues down 38% since 2008.

Marinwood Market opens for business

2011-11-04T11:43:00.000-07:00

There's something very satisfying about the opening of a new locally owned business. And when that business is a supermarket in these times of economic uncertainty and chain store dominance it's even more satisfying.

Marinwood Market is not a totally new business - it's actually a transplant of the old Boardwalk Market in Tiburon. But it's a new location and a new larger 15,000 sq.ft store for the owners and the transplanted staff.

It takes many years for a grocery store to establish its reputation and customer loyalty in a new location, but the Marinwood Market can count on a lot of good will from the local community, which has been without a local market for more than five years since Marinwood Plaza's Bell Market closed.

More photos of the new store and the renovation are on the store's Facebook page.

As can be seen from these photos, the new store is bright and spacious and fairly well stocked, with just a few gaps still waiting to be filled. The produce and deli sections are modest but nicely presented and appropriate for a store of this size.

When I visited the store was quiet - but it was a midweek afternoon, so no surprise.

Overall a great improvement from two years ago, when it seemed the Plaza would never recover.

Marin Gateway Shopping Center lands a buyer (really this time)

2011-10-06T11:05:00.000-07:00

The San Francisco Business Times reports that the Gateway shopping center in Marin City has been sold to an affiliate of the Gerrity Group for $36 million. The center was sold by the Bay Area Council, and was previously reported as sold to a joint venture between Developers Diversified and BIG Shopping Centers, although this sale failed to finalize.

From the SFBT:

"Gerrity Group was formed to acquire well-located shopping centers where it can add value and create additional quality by investing in capital improvements, operations and management," (Dan Wald of Cassidy Turley) said in a statement.
A year ago, reports surfaced that a joint venture of The BIG group, an Israeli company, and Developers Diversified, a U.S. real estate investment trust, were going to buy Marin Gateway for $36 million. The property was first put up for sale in April 2010.
Wald said that BIG put out its press release about the deal while still in the due diligence phase, and that Developers Diversified chose not to move forward with the deal after the due diligence.
"That was unfortunate, because (BIG) announced the price, and that created a ceiling," Wald said

Congratulations to the new owners. They have a little work to do to lease up several remaining vacant stores.

Marin retail sales hit by economic worries

2011-10-05T16:11:00.000-07:00

Fears that the economy is sliding back into recession have had a negative impact on retail sales in Marin County. According to data released by the State Board of Equalization, just $2.6 million in sales tax distributions were made to cities in Marin in September. That total represents a fall of 6.5% over September 2010, and is also 3.9% less than the September total in the depths of the 2009 recession.

As the chart below shows, the rolling 3-month average for 2011 is tracking an almost identical path to 2008. Does this mean 2012 will turn out to be another 2009? Let's hope not.

Woodlands open at the Boardwalk, as the Boardwalk moves north to become the Marinwood

2011-07-12T11:00:00.000-07:00

Keeping track of all the grocery stores in Marin is quite the challenge. In Tiburon, the Boardwalk Market, a 25-year veteran of the Boardwalk shopping center, closed its doors at the end of April this year. Less than a month later, with a few cosmetic changes to the building, the property re-opened as Woodlands Market.

Meanwhile the old Boardwalk Market has migrated northwards to Marinwood, where renovation of its new home at Marinwood Plaza is taking place, with a September opening planned. The new store will be twice as large as the old Tiburon store, and will be renamed Marinwood Market. Not to be confused with the Marinwood Farmers Market, which operates every Saturday at the Plaza.

Waiting for a tenant at the Cove Shopping Center in Tiburon

2011-07-11T13:38:00.000-07:00

With both DeLano's and Blockbuster now gone, the Cove Shopping Center in Tiburon is looking somewhat deserted these days. Meanwhile, the small stores at the center are holding on, waiting for things to improve.

I'm sure it's only a matter of time before one the region's expanding markets, such as Sunflower Farmers Market, or Fresh 'n Easy, leases the grocery store.

Bliss Home Design at Strawberry Village

2011-07-11T11:38:00.000-07:00

First look at Bliss Home Design, which opened recently in the old Smith & Hawken space at Strawberry Village. Clearly a great place to stock up on statues, chandeliers, over-sized everything, and horses' heads.

Slow recovery for retail sales in Marin

2011-07-06T12:14:00.000-07:00

As the national economy teeters between recovery and falling back into recession, retail sales in Marin continue to show a slow and steady improvement. The 1% retail sales tax distributed to cities in Marin averaged $2.38 million over the three months to June, an increase of 7.6% over the same period in 2010, and 16.5% up on the same period in 2009. The question now is how long will it take retail sales to catch up with the level seen in 2008?

San Rafael Target Community Impact report lacks credibility

2011-04-13T11:50:00.000-07:00

The Community Impact Study for the proposed San Rafael Target found that impacts would be minimal and that the store would provide substantial net increments in tax revenues and employment.

When I first glanced over the report last week I sensed some weaknesses. Having now read the report in full, I find it lacking in credibility. Its approach and execution are full of holes, and its findings are inaccurate and misleading. There is not space here to do a page-by-page review, so below are just the key observations.

The report’s retail demand analysis is defective.

The core of the report’s findings are based on an assessment of retail demand and supply, with the basic economic reasoning that if demand exceeds supply there is a need for additional retail space:

“Based on the amount of money, on average, Trade Area residents spend on retail goods and food services annually, the total amount of retail goods and food services that Trade Area resident demand can be estimated” (Retail Impact Analysis, page 2-3).

The idea is right, but unfortunately the study then takes a faulty approach to estimating retail demand, that is ultimately meaningless.

First, the study estimates the amount that Trade Area residents spend on retail goods and food services by using average per capita retail sales for the state of California, and then adjusting these figures to account for differences in income between the California average and the Trade Area (Figure 2.1). The result is not an estimate of retail demand; it’s simply an estimate of what retail sales would be like if the structure of retailing in the trade area was the same as the state average. But of course it isn’t the same as the state average, for the simple reason that unlike the rest of California, Marin’s retail provision is not dominated by miles and miles of strip malls and the big box general merchandise discounters that inhabit them. One of Marin’s great strengths is it’s abundance of vibrant and vital downtown areas and smaller local shopping centers. As I pointed out last week, General Merchandise stores account for 18% of retail sales in California, but less than 10% in the trade area. I'm sure many people who have concerns about Target prefer the Marin model, and will object strongly to the underlying assumption in the report that Marin’s residents demand a retail landscape that mirrors the rest of the state.

The second departure from reality in the demand analysis is the segregation of retail demand by type of store instead of type of product. This is meaningless: people don’t demand General Merchandise stores or Personal Care stores – they demand clothes and shoes and books and cosmetics. Where they purchase these goods is irrelevant. Again, the only reason to categorize demand by store type is to pursue the same argument that there are fewer Target-type stores in the Trade Area than there should be (i.e. in the rest of strip-mall dominated California). A credible retail impact analysis has to categorize demand by product type, not store type.

The study presents a “Traditional” impact scenario that is unrealistic and misleading

What the study calls its “Traditional Impact Analysis” is an even wider departure from the real world. It’s reasoning goes something like this: because there are fewer General Merchandise stores than there should be in the Trade Area (see above for why this is nonsense), the dollars that want to be spent at these stores are either staying in peoples pocketbooks, or they are being spent at stores outside the trade area; because people who want to buy clothes or toys or DVDs or dishtowels from a General Merchandise store would never buy such goods from a different type of store, would they? Consequently the proposed Target store would simply soak up all these unspent and leaked dollars and the local stores would suffer absolutely no impact whatsoever. This notion is sheer fantasy: in the real world, retailers compete for the same customers in a constantly evolving battle for market share.

The “Conservative” impact scenario is flawed and contradictory

A welcome hint of reality appears when the study describes what it calls its “Conservative” impact analysis. It correctly notes that the $50+ million of retail sales at the proposed Target store would likely be transferred from various other retailers based on the types of competing products the Target store would sell. This is the right approach; if the Target store did not exist, those retail dollars would be spent at a wide variety of other stores, some of them in the trade area, some of them elsewhere. The object of an impact analysis should be to attempt to determine which stores would be impacted and by how much. Unfortunately the report only gets it half right because it continues to use the concept of “unmet demand” in Clothing and General Merchandise stores, ignoring that this unmet demand is only meaningful under the assumption that people who shop at General Merchandise stores don’t shop at other stores, which is a contradiction of the whole cross-shopping premise of its “Conservative” approach.

The “Anticipated” impact scenario repeats and compounds the previous errors

The third “Anticipated” scenario is the consultant’s considered estimate of impact, and presents a speculative analysis that reflects the same faulty reasoning as in the earlier scenarios. In particular, the study finds that retailers in all competing categories except Food and Health & Personal Care stores will not be impacted because:

“…customers are generally willing to travel far distances to find the specific product they desire at the specific price they desire. For this reason, it is likely that spending for these products at the proposed Target store will be the result of residents shifting spending from other General Merchandise stores outside of San Rafael to the proposed Target store.” (Page 2-13)

Read this carefully. It says that everyone who will go to the new Target to buy toys and clothes, books and sporting goods, dishes, shoes, towels and the thousands of other goods that are sold at stores throughout San Rafael – that none of these people currently buy any of these goods in San Rafael. They never shop for children's clothes at Gap? Never buy shoes or home goods at Northgate? Never shop at Best Buy? Never spend a dollar at T&B Sports or any of the specialty stores on Fourth Street? It’s another implausible assumption, but one the report needs to adopt to support its goal of providing analytical support to the proposed development.

As for the other findings in the report, the fiscal benefits to the City, which are derived from the “new” sales described above, appear to be over-estimated by a large margin. Furthermore, given the obvious intention of the report to support the development, it is difficult to believe that the case studies were conducted with any degree of objectivity.

I’m sure the City of San Rafael, who commissioned the report, and the developers, who paid for it, are happy with the report’s findings because they have gotten what they wanted. But if the City moves to approve the development at its April 21 meeting by claiming that this report justifies the project and provides a satisfactory answer to all of those who have raised concerns about the project’s impact, then someone needs to cry foul, loudly.

San Rafael Target gets the green light from Community Impact Study

2011-04-06T17:08:00.000-07:00

The Community Impact Study for the proposed Target store in San Rafael was released today, and essentially clears the way for the City to approve the project, finding that the impact on existing retailers will be minimal.

The study estimated that the highest impact would be on San Rafael retailers in the food and drug categories, with a decline in sales of just 2.9%.
In addition, the Target store is estimated to create 164 net new jobs and provide a net annual tax increase to San Rafael of $646,000.
The consultant's review of case study cities found that there were no store closures directly related to the opening of a Target store, and that generally downtown retailers adapted to the increased competition.

It's not hard to see that the report was written in order to support the proposed store. The primary reason for the absence of impact in the consultant's analysis is given in the Executive Summary:

"An analysis of retail sales compared to resident demand shows significant under supply, or retail leakage, in General Merchandise retail stores, both within San Rafael and in southern Marin County"

It appears that the consultants reached this conclusion by comparing the pattern of retail sales in central/southern Marin, where General Merchandise stores (i.e. Big Box stores) account for approx. 10% of retail sales, to the average for California, where Big Box stores get around 18% of sales. When you look at it like this, it is then logical that there is "unmet demand" for these types of stores, and hence that the proposed Target would be satisfying this unmet demand rather than transferring sales from existing stores in the area.

I'll let you decide on whether that makes sense. Meanwhile I'll read the rest of the report.

San Rafael Target debate heats up pending release of Community Impact Report

2011-04-05T09:49:00.000-07:00

The much-publicized and much-anticipated Community Impact Report for the proposed Target store in San Rafael is due to be released Wednesday April 6.

In preparation, both sides are firing up their engines and preparing to do battle. Opponents gathered outside San Rafael City Hall yesterday to protest the store's low wages and use of nonunion labor. And Target stated its case with a piece in the Marin IJ that emphasized job creation, sustainability and consumer choice.

The "No" camp seems to be winning the social media war: the "Heck No" opponents have 254 Facebook likes, versus the "San Rafael say Yes to Target's" 156. The petition against the proposed store has 699 signatures.

So who is going to pleased and who disappointed by the report's findings? With such divergent views it will be impossible to please everyone. My guess is that the fiscal benefits will be found to be lower than Target's estimate, and the commercial and traffic impacts of some concern, with a recommendation for a reduced footprint - say 90,000 sq.ft, and no grocery section.

What do you think?

Is the Commons at Mount Burdell on the rocks?

2011-03-23T11:18:00.000-07:00

The North Bay Business Journal recently published an outlook for the Marin office market, in which it was noted that the Fireman's Fund HQ in Novato was on the market. If you recall, this is the site of Marin's largest development project - the Commons at Mount Burdell, which is the proposed redevelopment and expansion of the site as a mixed-use community.

The project was announced in 2008 by San Diego based American Assets, who shelled-out $312 million to acquire the 65-acre site in 2007 in a joint venture (JV) with the GE Pension Trust. According to the proponents:

The completed project would be named the Commons at Mount Burdell and would upgrade the 710,000 square feet of existing facilities adding nearly 800,000 square feet of uses including residential, a first-class hotel, retail, health club, daycare, restaurant, meeting venues and a variety of other community amenities. In addition to implementing Platinum LEED standards, the projects' water, waste and energy systems are being designed to achieve 100% carbon neutrality; one of the first such efforts for a mixed-use commercial project in the United States

Utilizing the latest approach to master plan development, The Commons at Mount Burdell would actually expand the current amount of open and green space on site by nearly 15% through the removal of nearly 15 acres of surface asphalt parking and the construction of parking structures.

Given the economic problems of the last few years, it is not surprising that this project has not yet moved forward, but I assumed it had just been placed on the back burner for a while.

However, looking through some SEC filings, it appears that events have conspired to make the future of the project more uncertain. American Assets Inc. decided in 2010 to become a publicly listed real estate investment trust (REIT). In short, this involved an IPO and the transfer of their properties into a new entity - American Assets Trust. However, the terms of the lease allow Fireman's Fund the first right of purchase on any transfer or sale of the property. In anticipation of the REIT formation, the property was offered to Fireman's Fund in 2010. The offer was not accepted, but Fireman's Fund also didn't waive their right of first offer on any future transfer. In addition, GE Pension Fund, which is the majority (75%) shareholder in the JV, did not consent to allow its interest to be included in the REIT formation. These problems meant that American Assets could not transfer the property into the REIT, and it also caused them to recognize a $38.5 million impairment on the property's value in 2010.

So it looks like the original entity - American Assets Inc. - remains as the owner of the 25% interest in the JV, and will continue to manage the property. But given the owners' new focus on the REIT, it seems reasonable to assume that they would look to offload the site at the earliest opportunity.

It will be interesting to see whether Fireman's Fund decide to take the opportunity to purchase their corporate HQ, and if not, whether a new owner can be found who will continue to pursue the Commons development as proposed, or is it on the rocks? One complicating factor is the uncertainty over the Novato North SMART transit station, which would serve the site, but which was identified recently as one of the potential stations to be cut, as part of SMART's budget shortfall.

*Update: The NBBJ has ~~copied~~ also picked up the story.

Borders adds San Rafael store to the closure list

2011-03-17T16:31:00.000-07:00

News today that Borders Books has added another 28 stores to the list of bankruptcy closures, including the store on Francisco Boulevard in San Rafael.

The reprieve for the San Rafael outlet lasted just a month, and the store is now scheduled to close by late May.

In the short term the Borders closure will take some pressure off other book stores in the county, but the switch to digital media appears to be relentless - ebooks now outsell hardbacks. So is it only a matter of time before the bricks-and-mortar bookseller ends up at the same place in history as the video store and the music store?

Cool new retailers entering Marin in 2011

2011-03-14T12:29:00.000-07:00

There have been quite a few new store openings (including some very cool regional retailers), and some closings over the last couple of months. Here's a partial list of what's new and what's on the way:

First, at Marin Country Mart, James Perse and Poppy Store are now open, but Tam Cellars is closing. San Francisco retailer Unionmade ($225 vintage Levis) has also signed up for a store
At Strawberry Village there is a new chocolate store, Chocolatier Blue. Also at Strawberry, the ex-Smith and Hawken store has been leased to Bliss Home Design ("sophisticated, dramatic settings for the bedroom")
Up at Vintage Oaks, DSW Shoe Warehouse has taken over the space previously occupied by Benjamin Franklin Crafts. Other new stores at Vintage Oaks include Subway, Justice and Southern Pacific Smokehouse.
In Corte Madera, new stores at The Village include Free People, Ann Taylor Loft (relocating from the Town Center) and Restoration Hardware Baby & Child. Coming soon to the Village are Tommy Bahama, J-Crew's Madewell and North Face.
Lastly, and possibly a victim of the gourmet fro-yo craze, Baskin Robins in downtown Larkspur has closed.

Borders San Rafael store escapes the chop (for now)

2011-02-16T09:12:00.000-08:00

As Borders books seeks bankruptcy protection, the good news for Marin fans of the store is that the San Rafael location is not on the list of 200 initial store closures. Whether the reprieve is temporary or permanent will depend on the success of the company's restructuring.

Elsewhere in the Bay Area, the retailer is making big cuts. The San Francisco stores on Post Street and at the Westfield Center will close, as will Santana Row, Alameda Towne Center and others in San Jose and San Mateo.

*Update: the ~~good~~ bad news is....

Downtown Tiburon's problems? It's the economy, stupid.

2011-02-11T10:59:00.000-08:00

A front page article in the IJ today reports from last night's City of Tiburon meeting to discuss the poor state of Tiburon's downtown. As we noted last year, Tiburon's sales tax revenues have declined by over 30% since 2008, by far the worst performance in Marin County. With businesses closing and others struggling to survive, the City has been looking for answers and has reached the view that the downtown is tired and needs some revitalization. A design consultant noted "challenges to the physical framework" and recommended several measures including improvements to walkways, landscaping and signs, and more aggressive marketing.

It's good to see everyone getting motivated to do something about it, but you can't just change the physical layout of downtown. Tiburon has constraints, particularly the lack of free parking, that it shares with many other downtowns. While it's good policy for the City to make whatever improvements are necessary to keep the downtown area attractive, don't expect such measures to have a dramatic impact.

Tiburon's problem is actually quite simple (and temporary): it's the recession. Tiburon may be the wealthiest city in Marin, but it's also been hit the hardest by the economic downturn. Look at the personal income tax data, from the CA Franchise Tax Board:

Total Adjusted Gross Income (AGI) for zip code 94920 (Belvedere/Tiburon) in 2008 was $2.82 Billion. In 2010 it was $1.51 Billion, a decline of -47%.
Over the same period, AGI for Novato fell by -11%, Corte Madera by -3% and Mill Valley by -31%.

I confidently predict a strong recovery for Tiburon over the next year or two. The City may take the credit for implementing their decisive action plan, but I suspect it will have more to do with the improved balance sheets of the citizens of 94920.

Boardwalk Market likes Marinwood Plaza

2011-02-10T09:45:00.000-08:00

If you believe what you read on Facebook, things are looking up for the residents of Marinwood. The owners of Tiburon's Boardwalk Market, which is being replaced by Woodlands Market in the next few months, have announced that they will be relocating their business to Marinwood.

The grocery store at Marinwood Plaza has been vacant since Bell Markets vacated several years ago. Last year, new life was injected into the Plaza in the shape of a weekly farmers market, which has enjoyed huge support from the local population. If the Boardwalk move is executed it will be a great outcome for the property and the community.

*Update: some additional details from the Marin IJ coverage: Boardwalk's owners will be doubling the size of their operations, from the current 7,000 sq.ft in Tiburon to 15,000 sq.ft in Marinwood. Also, they attempted to do a deal to get the ex-Delano's space at The Cove in Tiburon, but could not agree terms with the landlord.

Marin retail sales best in four years

2010-12-23T10:21:00.000-08:00

Retail sales are surging back as customers across the nation head to the malls and exercise all the pent-up spending energy they've been accumulating during the recession.

For Marin retailers, this has been the best retail sales period for many years. The 1% retail sales tax distributed to cities in Marin in December (the purple line on the chart below) was over $3 million, a 10.7% increase over 2009 AND it was above both the 2008 and 2007 totals for the same month.

So is this the start of a new era of prosperity - or a blip in an otherwise unimpressive year?

San Rafael Target decision delayed again; and where did that sales tax come from..?

2010-12-21T11:27:00.000-08:00

San Rafael Council failed to come to a decision again on the proposed Target in San Rafael after another marathon session at last night's Council meeting. This time the loudest noises were being made by those in opposition to the store, who continue to ask questions about traffic impacts, minimum wages and the effect that the store will have on local Mom & Pop retailers.

Earlier in the day Target launched its charm offensive by stationing people around the city with large red "Yes Target" signs. There's also a website, Facebook page and twitter feed. The opposition group also has a "Heck No" Facebook page, and is attempting to get enough signatures on a petition to force a referendum.

As an aside, it is interesting to see that Target is claiming $675,000 in new sales tax revenues will be provided by the new store. If this figure is the 1% sales tax that goes to the City of San Rafael, that would suggest Target expects the store to make $67.5MM in annual retail sales, which just happens to correspond to $500 per square foot for the 135,000 sq.ft store. Add on to that figure sales from groceries (which aren't taxed) and you have what will be one of the best performing Target stores in the nation (Target's average sales performance was $287 per sq.ft in 2009).

Of course this won't be new sales tax, but will instead be the tax that would have been paid at wherever Target's customers shopped before the new Target appeared; so the majority of it will be a diversion of tax receipts to the City of San Rafael from other Marin cities, in particular the City of Novato, which is where locals buy their Target stuff now. A sizable proportion would likely also be diverted from other stores in San Rafael, so the net new tax receipts for the City of San Rafael would be somewhat less than $675,000.

Overall, I think $70MM+ in annual sales is rather ambitious for a store in this inconvenient and unattractive location, so don't be surprised if the numbers come in quite a bit lower than advertised.

CVS drug store to open in Tiburon

2010-12-13T13:16:00.000-08:00

Finally some good news for Tiburon: CVS is planning to open a new store in the space that was vacated by DeLano's Market nearly two years ago. According to the Marin IJ, the store will include a drive-through pharmacy.

(photo credit: Summit Model Train Kits)

Marin retail sales edge up in November

2010-12-11T19:19:00.000-08:00

Retail sales tax distributions in Marin showed strong growth in November, coming in18.6% above November 2009.

So far in 2010, some $25.5 million of sales tax receipts has been distributed to Marin's Cities, up 4.2% from the same period in 2009. There is still a way to go before retail sales recover to their pre-recession levels: sales to date in 2010 are 13.2% below those of the same period in 2008.

Can the Marin Country Mart lure upscale Bay Area shoppers?

2010-12-06T15:08:00.000-08:00

It's fascinating to see the first batch of new retailers appear at newly-landscaped Marin Country Mart. Owner Jim Rosenfield, who recently said that he had lost $7 million on the Brentwood Country Mart, has been successful in selling the Marin concept to some of his existing Brentwood tenants. So far, either open or in the pipeline, we have:

Malia Mills (designer swimwear)
Erica Tanov (Berkeley-based designer fashions)
James Perse (Los Angeles designer - women's, men's and home)
Twig and Fig (upscale stationery)
Miette (Cupcakes and pastries, small store in the San Francisco Ferry Building)
Rustic Bakery (Larkspur's own organic bakery, with stores on Magnolia Ave. and Grant Street, Novato)
Poppy Store (Kids designer clothing; another tenant of the original Brentwood Country Mart, and owned by "According To Jim's" wife Jenny Belushi)

Good to see lots of stores that will be new to Marin. There's a clear "upscale designer" theme emerging, that suggests the Mart is being positioned as a regional destination, which is something that no other Marin mall or shopping center has attempted.

The reason the Mart needs to pull customers from beyond the Marin area is that upscale designer boutiques only serve the top end of the market - the wealthiest 5%-10%. Marin is a wealthy place, but there are only 12,157 households that have incomes of $200,000 or more (according to the 2000 Census). That makes for a very thin market, which is why high-end fashion districts and malls are usually only found in the larger cities.

Los Angeles County, where the The Brentwood and Malibu Country Marts are located, had 108,889 households with incomes above $200,000 in 2000.
In the San Francisco Metropolitan Area (the Bay Area), there were over 150,000 households in this highest-income group. These shoppers tend to gravitate towards Filmore Street and Union Square in San Francisco, which are the two largest high-end fashion districts.

The owners of Marin Country Mart are trying to position the center to take a piece of this market. According to the Mart's marketing brochure there are 75,000 households with incomes above $200,000 within a 30-minute drive. That suggests a trade area that extends as far as Oakland, southern San Francisco and Santa Rosa.

For the concept to work the center will need a critical mass of upscale retailers. The three existing anchor businesses at the center are 24-hour Fitness, the Marin Brewing Company and Bed Bath and Beyond. These are strong business that are local destinations in their own right. They anchor the center, fill the car park, and provide the bulk of the rent. But they are not upscale and are not going to help sell the center as an upscale destination.

It looks like Mr Rosenfield will need to add a few more big-name designer stores and some high-end eating and drinking establishments if he is going to succeed in tempting the the Bay Area's wealthy to make repeat visits to the Marin Country Mart.

*Update: the Mart's website now has some detail, including a mall directory

Smart move of the week: Good Earth to relocate to Fair-Anselm Plaza

2010-12-02T10:31:00.000-08:00

A photo-shoot and lease signing ceremony generated lots of press yesterday for the news that Good Earth Organic and Natural Foods Store is expanding and relocating to the ex-Albertsons store at Fair-Anselm Plaza. The store will grow in size from 8,000 sq.ft currently to 20,000 sq.ft and include an expanded prepared foods selection and more non-food items.

The Plaza was acquired earlier this year by LRG Capital Real Estate Partners, a Larkspur-based investment fund. In keeping with the green philosophy of both the store and the town, the project team is considering several sustainable features, including daylighting, solar PV and a grey water reuse system.

This is a smart move by the Good Earth owners. It's a relatively safe expansion in a town where they are already established with a store that residents like. It also prevents any competitors from opening in the Fair-Anselm space. And there is no chance a competitor will open in their old store: Good Earth plans to use that building for their school lunch business.

DeLano's closing in Tiburon and Mill Valley

2010-11-30T09:33:00.000-08:00

The Delano's grocery chain, which has struggled to maintain market share in the face of new competition and declining consumer spending, has folded. The two Southern Marin stores, at Tamalpais Junction, Mill Valley and The Cove, Tiburon, are expected to close in December. As reported today in the IJ, it looks like the Fairfax store will remain open but will drop the DeLano's name. The chain's three San Francisco stores are also closing.

DeLano's presence in Marin began in 2006, when they took over five Bell Markets. Poor performance led to the closure of the DeLano's market in downtown Tiburon in February 2009, and the store in Novato closed the following August.

The two Southern Marin stores have likely seen a sales decline following the opening of Whole Foods at the Alto Center in Mill Valley. The Fairfax store benefits from little local competition, although that would change if a market is found by the new owners of the Fair-Anselm Plaza.

So what now for the closed stores? According to Fresh & Easy Buzz, There are a few small-format grocers currently looking to expand in Northern California, including Fresh & Easy, Henry's Farmers Market and Sprouts Farmers Market. Any of these would be good new additions to Marin County. Local grocer Mollie Stones may also be interested, although the Southern Marin sites may be considered too close to Mollie's existing stores in Sausalito and the Bon Air Center.

New stores for Marin Country Mart

2010-11-29T15:37:00.000-08:00

News of several new stores for the renovated Marin Country Mart, all of which are new to Marin County and most of which are local Bay Area businesses. Designer Erica Tanov has opened a store at the former Larkspur Landing center, while other stores expected to open soon include James Perse, stationery store Twig & Fig, and Ferry Building cake seller Miette.

Making stores sustainable with LEED for Retail

2010-11-22T16:33:00.000-08:00

The US Green Building Council officially launched LEED for Retail and the LEED Volume program at Greenbuild last week. LEED for Retail is the result of several years of work and preparation, including a pilot version, three drafts and the input of several major retailers. The LEED Volume program is also largely aimed at retailers; it provides a tool for achieving LEED certification for a prototype building, which allows developers and retail chains to roll out multiple stores without having to go through the effort and expense of certifying each building separately.

Designing a LEED system for retail is challenging simply because of the inherent purpose of retail buildings. The original LEED programs were designed for office buildings and civic uses, which are essentially spaces for people to work in, and in most cases that implies low-impact activities, such as sitting at a computer or in a meeting room.

Retail is different because the physical space is a tool that the retailer uses to sell its products or services. Retail buildings are designed to maximize accessibility, display the product attractively and provide the customer with a rewarding shopping experience. The number one design concern of the retailer will always be to make their store as attractive as possible to customers, and traditionally that has often meant a brightly-lit store (inside and out) and plenty of heat and air conditioning to make the interior as comfortable as possible. That's not the best recipe for an energy efficient building.

For retail mall owners, the comfort and accessibility of the common areas and parking is equally important. The developer and owner have less ability to influence the behavior of customers, and are shy of imposing any rules or restrictions that could turn customers away. In Marin County, the redeveloped Northgate Mall is aiming to achieve LEED Gold certification. One of the LEED strategies was to provide preferential parking for low emission vehicles. This involved designating 154 spaces that were closest to the mall entries “for low-emitting vehicles”. Shopper confusion and anger was immediate, and the project owner responded by blacking out the signage soon afterwards.

Looking at the individual credit requirements, below are some of the key areas that are different in LEED for Retail.

Kitchen equipment. The commercial kitchens that prepare food in cafes, restaurants and grocery stores have a major impact on the sustainability of the building. The operations of these types of retail business are more akin to manufacturing facilities than the passive, low use office, school, residential and civic buildings that LEED grew up on. Meal preparation uses energy and raw materials, and creates waste and emissions. The LEED for Retail guide dedicates a full section to the issue of kitchen equipment, with a schedule of equipment types, efficiency ratings, water use and the ratings required to achieve credits.
Refrigeration units. Similar to the above, the nature of the freezers and large scale coolers used in grocery stores has required the inclusion of specific prescriptive standards within LEED for Retail.
Light pollution. When it comes to outside signage, retailers have received a partial pass from the USGBC: external signage that is internally illuminated is exempt from the light pollution credit.
Special provisions for multi tenant projects. In cases where the project is part of a master planned development, such as a retail strip or shopping center where several stores share common facilities, the new guide recognizes that certain requirements will need to be subject to a master plan for the whole development. Alternative transportation, parking, irrigation and landscaping are among the credit areas that require an overall plan for the whole project.
Daylight and Views. It is not clear how these credits will be interpreted. Retail stores are designed with big widows that should in theory provide access to daylight and views for staff. But those credit points will be of no practical value if the light and views are then blocked by window displays, merchandise and signage. Next time you are shopping in the middle of the day, see if you can find a store that uses natural light instead of artificial.

The new programs are a welcome addition to LEED. There will certainly be challenges in implementation, but overall, the programs should help to encourage more sustainable practices in the development of retail real estate.

Urban Outfitters - Opening Tuesday 11/23

2010-11-22T09:12:00.000-08:00

The store is fitted out, the shelves are stocked, the staff trained and the mannequins are clothed. It'll be a pre-Thanksgiving opening for Urban Outfitters at the Town Center Corte Madera tomorrow.

New stores spotted in Larkspur

2010-11-17T15:01:00.000-08:00

Two new stores have recently popped up on Redwood Highway in Larkspur/Greenbrae. First, the space at Cost Plus Plaza that was vacated by Party America has been filled by Mattress Discounters. Trader Joe's. also took a portion of the space that was adjacent to their store and expanded into it. The remainder was snapped up by the mattress store.

Further north, on the corner of Rich Street, the unit previously occupied by Golf Mart has been taken over by a toy store, going by the name of Toy World. Not sure if the business is connected to Solaria's Toy World in the nearby Bon Air Center, or whether the name is just a coincidence.

New store news: Target, Urban Outfitters and Woodlands Market

2010-11-15T10:11:00.000-08:00

In Corte Madera, the new Urban Outfitters store at the Town Center is taking shape. The shell is finished, staff are being recruited, and the store is being fitted out. The photo below shows how the covered walkway has been enveloped within the store footprint.

Over in San Rafael, the debate over the proposed new Target continues to hit the headlines. Last week the San Anselmo Chamber of Commerce passed a resolution in opposition to the development. Then, after a marathon 7-hour meeting, the San Rafael Planning Commission approved the project:

"Our working families need the convenience of economically priced items in one place that doesn't require a trip on the freeway," Chairwoman Maribeth Bushey-Lang said. While "there are a lot of reasons why this is not the ideal location by any stretch of the imagination," job creation, sales tax revenue and convenient shopping outweigh those concerns, she said.

Also last week the Marin IJ reported that downtown Tiburon will be without a grocery store for up to four months after the Boardwalk Market closes at the end of this year. The owners of the Woodlands Market, who are taking over and expanding the space, had been in discussions with the Boardwalk to buy their business and keep the store open through the transition. However, these talks have broken down, and it looks like the store will close while the Woodlands space is built out, with an opening date sometime in April 2011. This is further bad news for Tiburon, which has the worst performing retail sector in Marin. However, this surely is a great opportunity for a quick-moving operator to set up a grocery store in one of the vacant downtown spaces.

Retail sales track 2009, but some cities doing better than others

2010-10-19T09:43:00.000-07:00

Sales tax distributions for October indicate that the volume of retail sales in Marin County continues to track that achieved in 2009. Total distributions reported by the State Board of Equalization this month were $1.9m, a slight 1.8% drop from October 2009.

This month, we take a look back to see how much retail sales have fallen over the course of the recession, and how far they have to rise to reach pre-recession levels.

The chart below shows the change in sales tax distributions since June 2008, using a 12-month rolling average index to remove monthly variability. Overall, the County is pulling in just 85% of the sales tax it was generating in 2008. However, there are some notable differences between cities:

Fairfax lives up to its reputation as being somewhat disconnected from the rest of the county, having maintained higher levels of sales tax revenues over the last two years, albeit with a decline over recent months at a time when other towns are recovering.
Corte Madera was hit quite hard at the beginning of the recession, but has shown the strongest recovery this year, and is my bet for being the first city to break back through 100 on the index. Novato has followed a similar path and is not far behind.
Sausalito, Larkspur and San Anselmo were more resilient at the start of the recession, possibly because of their reliance on eateries and local services, but were hit hard in 2009 as residents were hit with job losses and house price declines.
San Rafael and Mill Valley are each still below 80% of their pre-recession retail sales. San Rafael accounts for approximately 1/3 of Marin retail sales but has been hit with 1/2 of the county's sales decline. Mill Valley's acute decline is likely connected to its population base, which includes larger numbers of workers in finance, business and other sectors hit with job losses.
That leaves Tiburon in last place. Despite being the County's wealthiest town, its retail sector has imploded in the last few years, with sales now at just 66% of their 2008 level. A small retail sector, with a heavy reliance on tourist spending, is likely the reason behind the poor performance.

Marin Gateway is gonna be BIG

2010-10-18T11:45:00.001-07:00

The Gateway shopping center in Marin City has been acquired by a joint venture of Developers Diversified and The BIG group. According to a press release, the JV will pay $36 million for the property, comprising $7m in cash and an existing loan of $29m. The center was offered for sale in April by the Bay Area Council.

The BIG Group is based in Israel, where it has developed and owns a series of power centers. And yes, they are quite big, with very big totem signs to announce the fact (photo shows the BIG center at Krayot). BIG already owns several US shopping centers through a joint venture with Kimco, though this is the first transaction for the DDR JV.

Update:

The Marin IJ put out a bizarre front page story today suggesting that the Marin City Community Services was hoping to buy the shopping center. Good luck with that.

Positive signs in retail sales

2010-10-08T15:39:00.000-07:00

This week saw the release of stronger than expected September retail sales results. There was also a dip in the mall vacancy rate - the first improvement in occupancy for three years. The rash of good news brought forth cautious optimism from several commentators that the retail sector is on the cusp of a period of sustained growth.

In Marin, our own radar on retail performance also surprised us with a strong September result. The 1% retail sales tax distribution to Marin cities for September was the highest since 2007, beating by a fraction both September 2009 and September 2008. This year's figure (the purple line on the chart below) was widely predicted (by me) to fall below 2009 due to the cash for clunkers stimulus that bumped up 2009 retail sales.

It will be interesting to see next month if the momentum can be maintained as we head into the holiday season.

The impact of Target in San Rafael

2010-10-04T12:15:00.000-07:00

The proposed Target store at San Rafael was in the news last week as the San Rafael Chamber of Commerce postponed making a decision on whether or not to support the development.

This is a familiar big-box retail situation that has played out across the United States. Typically, the City often favors the development because it creates jobs and provides fiscal benefits from sales taxes. Other retailers and their representatives denounce the effect that the proposal will have on locally-owned independent businesses and the historic downtown and neighborhood stores. And the proponents claim that they will be providing a service that will compete mainly with other big box stores and will allow people to shop locally instead of having to drive to the big box stores and malls in other towns further away.

The Chamber plans to research other communities where Target stores have located. There are many examples where unlimited development of strip malls has killed downtown retail areas, but fewer where the impact of one store is clear cut. Target and Wal-Mart have plenty of experience in making their case in these situations.

A 135,000 sq.ft Target store like the one proposed in San Rafael would probably generate $40m-$50m in annual retail sales. The size of the retail spending market in central and southern Marin in the categories of goods that Target sells is approximately $1 Billion. Often, retail developers will cite growth in retail spending as demonstrating a need for new development. This isn’t the case in Marin, where population growth is less than one percent annually, and retail sales have been in decline as a result of the recession and the longer term growth of internet sales. The new Target’s $40m-$50m annual revenue would instead come from existing spending, which means on average the new store would capture 4%-5% of existing stores’ sales. This average figure represents a fairly minor sales decline that could be considered as being within the normal scope of competitive business. However, the distribution of impact will not be even, but will depend on (1) geography: the closer, the higher the impact, and (2) comparability: customers are more likely to switch from similar stores selling similar products; therefore niche, gourmet and specialty stores are less likely to notice an impact, but department stores and big box mass-market stores would take a larger hit.

Among the retailers in downtown San Rafael, many of the fashion boutiques and niche stores selling gifts and accessories wouldn’t compete directly with Target. The stores selling more generic items, like toys, sports goods, household goods, books, electronics and cds are in more danger of taking a sales hit from Target. And all businesses, including the eateries and health & beauty services that don’t directly compete with Target, will suffer if the new store reduces shopper traffic along Fourth Street.

NBBJ Real Estate Awards

2010-09-12T06:55:00.000-07:00

I see it's time to send in nominations for the Business Journal's "fifth annual 2010 Top Projects Awards" (fifth... 2010...?).

There aren't a lot of Marin contenders (it's been a quiet year). A leading contender in the mixed use category will be the Tamalpais Commons project in Mill Valley (picture below). This higher-density development is the first of several planned for Miller Avenue and is still controversial with many locals who fear increased levels of traffic. I'm not sure whether the residential component is a success, but the retail is a great addition to this part of Miller, adding three new businesses: Dish restaurant, Yolo fro-yo and ToyHouse.

Another Marin mixed-use development that might receive an award is the Millworks project, which houses the new Whole Foods in downtown Novato. The City has been criticized for allowing such a large project. And in terms of design it's just OK. On balance I think it's a worthwhile project, bringing business, jobs and residents to the downtown area.

Northgate Mall probably doesn't qualify, as it opened last year. They did a great job of getting most of the space leased in the midst of the great recession, but I'm not a fan of the design: the inside of the place looks too much like a warehouse. And there are too many small design fails, such as putting the H&M entry right behind this structural column.

Meanwhile, over the street at Northgate One, the new Walgreen is my official entry for "Ugly Building Turning Its Back On The Street" category.

Buy your tickets for the gala awards ceremony now, folks.

Northgate Mall - Victoria's Secret coming soon

2010-09-08T10:53:00.000-07:00

Since the renovated Northgate Mall opened at the end of 2009, they've been steadily adding new retailers. I got my first look at the new Forever 21 store at Northgate Mall last weekend.

There's no missing the remodeled mall's identity - it's all about mid market fashion. There's the three department stores for the older generations, and for teens and young adults there's a host of specialty chain stores. In fact, I've never seen such a concentration of almost identical stores next to each other. I'm sure the kids will tell me that Tilly's is nothing like PacSun is nothing like Hot Topic, Forever 21, Buckle, H&M etc... but for me it's all a little repetitive.

Victoria's Secret, which will occupy a large unit at the center of the mall, will certainly add a little complementary variety to the mix

Target gets a grocery store

2010-09-07T09:36:00.000-07:00

I finally got a chance to visit the new grocery store that opened quietly earlier this year - the one inside of Target at Vintage Oaks. I expected to find an expansion of their existing packaged food section with some added fresh food and baked goods. But they have totally moved the food section to one side of the store so it more resembles a market. The expansion is part of a nationwide roll out as Target continues to battle Wal-Mart for market share.

The grocery section was larger than I supposed, with some 10,000 - 12,000 square feet dedicated to food, and set out along 10 short aisles at the far end of the store. The design was as expected, with clean, simple signs, bright displays and well-stocked shelves .

The product mix was also simple, based around packaged goods and mass-market brands. Target's own brands were also on display: Market Pantry is their discount brand, while Archer Farms is the premium alternative. The fresh food section (photo above) was quite small. As you would expect from Target, the emphasis is on price and convenience. There was a lot of processed food on display, though I didn't spot the wall of shredded cheese.

I can't see many people using this as their main grocery store. Traffic was light, with 10-12 people shopping the grocery section. Target is clearly relying on the convenience of picking up some cheap groceries while shopping for other household goods or clothing to make this a productive use of space.

Retail sales still tracking above 2009

2010-09-02T09:05:00.000-07:00

Despite the slowdown in the economic recovery and amid warnings of a double-dip recession, 2010 retail sales in Marin have so far kept ahead of 2009 levels for the comparable month. For the year to August, the 1% sales tax distributed to Marin cities was $18.2m, up 3.3% over the same period for 2009.

Next month's figures will be interesting because the September 2009 figures were inflated by cash for clunkers spending from August 2009, as shown by the green line on the chart above, which rose to 2008 levels for that one month before sliding back in October.

Car makers are already reporting their August sales comps look terrible. So it will be no surprise if the Sept. 2010 retail sales number comes in 10%-20% below 2009.

Marin Country Mart exposed

2010-08-31T16:14:00.000-07:00

Work continues on the transformation of Larkspur Landing Shopping Center to Marin Country Mart, with the most radical action so far being the chopping down of trees along Sir Francis Drake Blvd, exposing the naked and still rather empty shopping center to the eyes of passing motorists.

The large trees that were removed are to be replaced by smaller Olive trees, two of which have already been positioned in the center of the mall, which is currently closed off while the landscaping is underway.

The center has also now got a new online presence, which is at the moment just a placeholder while we wait for some retailers to arrive. There's also a pretty brochure, which gives a few visual clues to the desired positioning of the center - think Janis Joplin, kids with balloons, Dirty Harry, some cheese and a barber's pole. If that doesn't provide clarity, try the brochure blurb:

Exceptional boutique shopping, neighborhood services & fine foods. A community gathering place with a children’s play area, grassy lawn, raised gardening beds, wishing well, picnic tables & benches, a fire pit & a famous duck pond.

Any ideas who the famous duck is? Donald? Daffy?

The only helpful suggestion I have is to take a look at Napa's Oxbow Market. I think that concept could really work here. Although I do also approve of the idea (shown below) of replacing Sir Francis Drake with a bicycle path. Very Marin.

Montecito Plaza

2010-08-30T10:41:00.000-07:00

Montecito Plaza Shopping Center is located on Third Street in East San Rafael and is part of a wider commercial hub that also includes the grocers Whole Foods and United Markets.

The center is over 50 years old and is locally-owned by San Rafael's Seagate Properties. Total retail space is approx. 130,000 sq.ft, anchored by a popular Trader Joe's grocery store, PETCO, and Rite Aid.

The center has a simple timeless layout based on a U-shape set around the car park, with a covered walkway providing sheltered access between the stores. Traffic is good, and since Trader Joe's opened a store in Larkspur last year, it's not impossible to find a parking space.

The retail mix includes everyday convenience stores and services, with a good selection of places to stop and eat or pick up food to go. There are several independent local retailers, such as Mad Rags as well as regional chains (Performance Bikes).

Pinkys Pizza and Cafe Trio are two popular eateries located at the entrance to a courtyard that leads through to the San Rafael canal at the rear of the property. The canal isn't the prettiest piece of water in the world, but it would be nice to see some effort to open up the back of the center and face the water with some restaurants and cafes.

The eastern side of the center is quieter, and includes evening-trade restaurants (Puentez Taqueria, Runi) and lower-volume retailers. Worth looking for is Jasmine Market, a small Mediterranean grocery store.

Overall, there are few vacancies in the center, with exceptions being small units hidden at the corners. Pasta Pomodoro is the highest-profile vacant unit. It's getting harder all the time to find a video store in Marin that hasn't closed, so I was surprised to see Silver Screen Video still open.

Overall, Montecito Plaza is a busy and popular shopping center, with a great location and good tenant mix. Expect to see it remain so for the next 50 years.

Summer 2010 update

2010-08-05T13:44:00.000-07:00

After a long summer of non-blogging, here's a quick back-to-school update of what's been making headlines in the Marin retail world.

Starting today with a little news story in the Marin IJ about the City of Corte Madera's commercial real estate investment portfolio. Yes, that's right, this small city of approx 9,000 people decided it was a good idea to become a landlord, paying $10m for the Park Madera shopping center at the peak of the market in 2006. Come 2010 and the rent doesn't over the debt service on the city's bond. The city originally purchased the center as a possible site for a new recreation center, however, the recent construction of a new Bank of Marin branch suggests it will remain as a retail center for the foreseeable future.

In Tiburon, the owner of Woodlands Market announced his intention to have the new store in Tiburon open by March 2011. The store will be 12,000 sq.ft, which is larger than the existing Boardwalk Market, which will close before construction starts later this year. The redevelopment will also include the addition of a pharmacy, the first one in Tiburon for several years.

A few photos snapped from around the county:

First, I liked Mi Pueblo, the Hispanic market in San Rafael's Canal neighborhood. Offers a different selection from my usual grocery stores.

Also visited the new Whole Foods at the Alto Center in Mill Valley. Yes, it's expensive, but I do like shopping there: great food and a fun shopping experience.

Over at the Village at Corte Madera there are new Teavana and Brookstone stores, while Martin & Osa and Elegant Living Furniture closed their doors for the last time.

And what are they thinking at Restoration Hardware? The latest refurbishment of their store is in the style of a 13th century European castle, complete with stockade and banqueting hall.

Retail sales back on track (in Marin)

2010-06-11T14:50:00.000-07:00

The strength of the consumer recovery had another setback today, as the latest retail sales report showed a decline of 1.2% in May. Department stores, general merchandise, auto sales and gasoline were all below estimates, and analysts pondered over the possible causes, which included the seasonal effect of cooler weather or the lack of growth in employment. Interestingly, online retail sales grew by nearly 16%. Maybe in our focus on the recession we're missing the big picture, which is the structural change in our shopping habits caused by innovations such as iphone shopping apps and the like.

Locally, the news is better. Our monthly update shows that Marin retail sales are higher than they were this time last year. The 1% sales tax distributed to Marin's cities in May 2010 was $2.36m, or 12% above the May 2009 figure. This tax distribution relates to sales that occurred in stores in February - March this year.

Old Town Square Corte Madera

2010-05-09T13:47:00.000-07:00

Corte Madera's Old Town Square is located on the western side of Corte Madera, at the intersection of Tamalpais Boulevard and Corte Madera Avenue. As its name suggests, this was the original commercial center for Corte Madera, where stores and other businesses clustered around the train station. The station is long gone and a bike path now follows the railroad tracks through to Larkspur. Menke Park sits in the center of the Old Square and the commercial businesses and stores line the surrounding streets. Marin Nostalgia has a few photos of the train station.
The retailers around the Square include many long-established retailers that serve the local community, plus a few destination businesses that draw people from further away. There's a predominance of hair salons and personal & business services, with just a few stores selling goods, food and drink.
Businesses along Corte Madera Avenue include Stefano's Pizzeria, Passion Flowers, Eat My Cookies and Ricks Wine Cellar.

Next to Menke Park on First Street, there's clothing consignment store Swan Dive, A-Line hair salon and a furniture consignment store: Peterson's Consign & Design. There's also the Marin outlet of The Dailey Method, which is usually packed with Marin Moms after the school drop-off and is possibly the most-visited business on the Square.

One of the oldest buildings is the old horse stables on the Tamalpais Drive side of the Square, which dates from around 1900, and is now occupied by Stellar Spa. Next to it is the only restaurant, Benissimo, the Corte Madera Cafe, and M Clothing. Also on this side is the newest business, Mobile Tech, a computer repair shop that recently moved from its former home further east on Tamalpais Boulevard (which is now being turned into a Bank of Marin branch). Mobile Tech occupies part of the building that was previously Tamalpais Paint and Color. The remainder of this building remains vacant.

Around the corner of Corte Madera Avenue is a laundry and the Twin Cities Market & Deli, which specializes in deli sandwiches and has a selection of Australian wines, beers and candy, courtesy of Les, the Aussie owner.

April data shows new year sales plunge in Marin

2010-04-30T09:48:00.000-07:00

Last month's reading of the retail sales tax data suggested that Marin retail sales had finally turned the corner. But April's data suggests the recovery might instead have been nothing more than a dead cat bounce.

The total value of the 1% sales tax allocated to Marin's cities in April sank to just over $1.6 million, or 16.9% lower than April 2009. April's allocations represent retail sales tax collected in the first weeks of the new year and the total is the lowest monthly allocation so far in the Great Recession.

Marinwood Farmers Market

2010-04-27T10:41:00.000-07:00

Forget about the opening of Novato Whole Foods, the real big retail event of the year so far is the opening of the new farmers market at Marinwood Plaza. I stopped by towards the end of the market on Saturday and picked up some lunch.

There were approx 25 stalls and although the crowds had thinned by the time I got there, there were plenty of people from the local community sitting around in the sun and looking very happy to have the market there.

Let's hope the market continues to attract customers each week and helps spur redevelopment of the Plaza.

Urban Outfitters heading to Corte Madera

2010-04-26T21:11:00.001-07:00

Huge fashion news this week with details released about the proposed new Urban Outfitters store at the Town Center Corte Madera.

Outline plans for the store were discussed at the recent Corte Madera Planning Commission meeting. The Urban Outfitters store will take the 9,154 square foot space currently occupied by Pier One, a retailer which has been in financial distress over the last year. The plans include the enclosure of the covered breezeway on the mall side, which will give the store extra space. As seen on the sketches, the design stands out from the existing Tuscan theme in quite the same way that the new Crate and Barrel store did. I wasn’t a fan of the C&B design, particularly the way in which it thrust its big white façade into the mall, but I quite like the finished product and appreciate the impact that it had on keeping the mall up to date.

This is a big move for the Town Center, which has until now steered away from competing directly with the fashion-led Village at Corte Madera. Urban Outfitters is one of my favorite stores and well overdue a representation here. The company also owns Anthropologie, which is one of the best stores at The Village, with very good merchandise and a wicked sense of humor and creativity in its display.

It will be interesting to see whether the arrival of Urban Outfitters marks a shift in the leasing strategy at the center and is followed by the opening of more apparel retailers there.

Whole Foods opens in Novato

2010-04-25T21:19:00.000-07:00

The biggest retail event of the year so far happened last Thursday with the opening of the new Whole Foods in downtown Novato. The retailer timed the opening of the 39,000 square foot store to coincide with Earth Day, and got plenty of coverage in the local news.

I dropped by this weekend to check out the store. From the outside, the scale of the Millworks building is quite impressive. The development, which includes condo/apartments above and adjacent to the Whole Foods, is a lot larger than other buildings in the downtown area, most of which are single level.
The store was quite busy, with more people looking than were buying. Most popular was the bakery and the deli counter. Parking in the Millworks parking garage was easy, with access directly into the store on the main level or from the upper mezzanine.
The design is industrial, with exposed pipes and wires everywhere, and big signs and graphics within the store, including a container sitting atop the dry bulk goods corner.

Overall, a great addition for northern Marin shoppers; not so great for other grocers in the area...

Prepare for Fro-yo Wars in Mill Valley

2010-04-21T12:51:00.000-07:00

I stopped by the new Swirl frozen yogurt store on Miller Avenue at the weekend. It's one of the self-serve operations where you can combine different flavors in a carton and then pile on a hundred different toppings. Nice stuff - but gets pricey if you fill the carton up. The store is at 417 Miller Avenue in the space previously occupied by the Lolipop cup cake store.

I wonder if "fro-yo frenzy" will become the 2010 version of the "cup cake craze" of 2008? Two years ago Lolipop opened at the same time as Frosting Bake Shop, another cup cake store, in downtown Mill Valley, and the Teacake Bakeshop in Corte Madera. Suddenly there were more cup cake shops than you could shake a stick at, and it was clear they wouldn't all survive. So there was a sense of deja-vu today when I read in the IJ that another self-serve fro-yo store, Yolo Yogurt Lounge was preparing to open just one block away in the new Tamalpais Commons development at 505 Miller.

Good luck to both stores, because I think they'll need it.

Marin City Shopping Center for sale

2010-04-20T10:09:00.000-07:00

One of Marin's largest retail centers, the Marin Gateway center in Marin City, is being put up for sale. According to a report in The Registry, the center, which measures 182,000 sq.ft and is anchored by big box stores Best Buy, Ross and Babies R Us, is expected to fetch around $40 million.

Marin Gateway is currently held by the Bay Area Council in it's Smart Growth Fund I, which is a fund dedicated to real estate investments that have an impact by providing jobs and incomes to local communities in need of revitalization.

Previously, the center was owned by Burnham Pacific Properties, which acquired the property for $22.3m in 1997.

Although the big boxes are solid performers, the smaller tenants have had less success, and there has been a history of tenant turnover and vacancy at the center. Four years ago, Sutter Health proposed taking over the site to build a new hospital to serve southern Marin.

Water Feature News

2010-03-31T16:33:00.000-07:00

Readers of the blog will know that I have quite a fondness for water features (there's no property you can't improve with a good pond or waterfall) so it's a sorry duty for me to report the sad demise of the once magnificent fountain at Larkspur Landing Shopping Center.

The old fountain, pictured above, was once a glamorous spouting frenzy of water wonder that enthralled young and old and kept alive an army of potted shrubs.

Sadly, Marin's version of the Trevi Fountain is now is now a sad pathetic spurt that looks more like a sewage pond than the Bellagio it once was.

I guess the new fountain is more appropriate for the minimalist retailer-less and shopper-less shopping center as it goes through its transition to become the Marin Country Mart. But alas, the worst indignity for the poor fountain is yet to come; the unkindest fate for any water feature: replacement by a fire pit.

Retail sales jump

2010-03-29T15:54:00.000-07:00

The volume of retail sales in Marin has finally turned upwards after 18 months of recording year-on-year declines.

Distributions of the 1% sales tax allocated to Marin's cities in March 2010 totaled $2.59 million, or +21.5% up on March 2009's $2.13m, and takes the county back to the same amount that was distributed in March 2008.

It's the first positive year-on-year change since the +1.5% increase in August 2008.

A reminder that taxes distributed to Cities in March represent retail sales that occurred over the 2009 holiday period.

Grocery Stores Gone Wild

2010-03-29T11:12:00.000-07:00

This might sound strange, but the most dynamic sector of Marin's economy has to be grocery retailing. The transformation in this sector over the last few years has been remarkable and is set to continue this year with more new stores opening and - very likely - more old stores closing.

Ten years ago, the grocery scene in Marin was dominated by mid market regional chains such as Albertsons and Bell Markets that operated 15-20,000 sq.ft stores. By 2006 Albertsons had closed or sold all their stores. Also in 2006 DeLano's took over five Marin Bell Market stores, although the ones in downtown Tiburon and Novato have since closed.

Over the last couple of years we've seen new stores from Trader Joe's in Novato and Larkspur, a large new Safeway at Hamilton Marketplace, the discount Grocery Outlet opened in Novato and Paradise Foods took over the old Safeway store at Pacheco Plaza.

And the action is set to continue in 2010. First out of the blocks this year is Mi Pueblo, which opened March 20 in the old Circuit City store in San Rafael's Canal neighborhood. Of all the new supermarket openings in Marin, this one seems to make the most sense, providing a large format grocery store targeted precisely at the local Hispanic market and serving an area that didn't already have such a store.

But grocery retailing will get really wild in the next few months with the opening of two new Whole Foods stores. The first will be a 40,000 sf store in the new Millworks development in downtown Novato, which will open on April 22nd. This will be followed early June by the new Mill Valley store, which will occupy the 23,000 sf ex-Albertsons space at the Alto Center.

The Whole Foods in Novato will no doubt make life tough for other grocers in the local area, in particular those competing at the higher price points, such as Paradise Foods and Harvest Market. The smaller WF store in Southern Marin will pull customers from Tiburon and Corte Madera as well as Mill Valley, so any sales impact will be spread among several existing stores. Whole Foods will also provide some serious competition for the various farmers markets around the county, some of which are already under strain.

If any other grocers want to try their luck in Marin there are several vacant stores available, including those at Fair Anselm in Fairfax, the ex-Delano's in downtown Tiburon and The Square Novato, and Marinwood Plaza. Unfortunately, as the current crop of new markets get established, this list is more likely to get longer than shorter.

Retail sales yet to turn around in Marin

2010-03-12T13:36:00.000-08:00

The San Francisco Business Times kinda missed the point yesterday when it reported that Bay Area cities got 1/3 more in sales tax revenue than they did in January. What they missed telling us was that sales tax distributions are always up in February because that's when they dish out the taxes that were collected during the previous year's peak holiday shopping season.

As the chart above shows, the real story for Marin is that February distributions (the purple line) were -5% down on the same period for 2009 (the green line), and -19% below the same month in 2008 (brown line). So we have not reached the bottom yet. Having said that, I'm hearing that market conditions are improving, so I don't think it will be long before we see the purple line cross the green to show the retail sector moving out of recession.

Trader Joe's to expand in Larkspur

2010-03-07T22:33:00.000-08:00

A proposal before the Larkspur planning commission this week reveals that Trader Joe's intends to expand its Larkspur store into part of the adjacent unit which was recently vacated by Party America.

The grocer is seeking approval of a circulation assessment permit, which will allow it to take over a 2,600 square foot piece of the unit, which was offered to the market last month for $42 per square foot. The Larkspur store has proved very popular since opening last year, despite some fears of major traffic congestion at peak shopping times.

Marin Country Mart signs first new tenant

2010-02-20T20:18:00.000-08:00

The first new retailer at the Marin Country Mart (formerly Larkspur Landing) will be a transplant from new owner JS Rosenfield's Brentwood Country Mart.

Malia Mills is a swimwear designer who has a small number of boutiques, most of which are in New York. This is what to expect from the Marin store, which is slated to open this spring:

We opened our own Malia Mills stores especially to redefine the experience of shopping for swimwear. We strive to create a shopping environment that is anxiety-free and liberating. We want women to enjoy the experience as much as they might enjoy treating themselves to new shoes or lipstick. We can't afford the biggest stores but we make our cozy spaces look more like a living space so you feel comfortable when you're getting undressed.

Friday news update

2010-02-11T10:18:00.000-08:00

Some of the Marin retail news buzzing around this week. Bonus points to anyone who can match the correct story to this picture.

As reported in the Marin IJ, CVS won approval to take over the former Elephant Pharmacy store at 909 Grand Avenue in San Rafael.

The Square in Novato is caught up in a downward spiral, with more retailers planning to vacate the center following the closure of DeLano's market last year. The loss of customer traffic and the presence of an undesirable element hanging out in the car park were cited as key reasons.

Eddie's Ross Grocery store has been bought by the owner of Kentfield's Woodlands Market.

In Corte Madera, Napa Style has closed its store at the Town Center. Over the highway at The Village, Brookstone has closed, but Elegant Living Furniture is soon to open.

The Twin Cities Times chronicles the latest plans for transforming Larkspur Landing Shopping Center into Marin Country Mart. Details are pretty light, save an intention to hold farmers' markets, flower shows and pony rides. Also interesting to note some of the owner's proposals that were denied by the Larkspur Planning Commission, including the construction of a 40 ft water tower and an entrance gate to charge for parking.

Tough times at the Farmers' Market

2010-02-11T08:38:00.000-08:00

An interesting article in the Wall Street Journal today about the problems facing some farmers' markets in the Bay Area. The growth of farmers' markets has been one of the great success stories of the last few years, prompted largely by increasing public awareness about and concern for the quality and origination of their food.

Marin currently has 12 farmers' markets (a list is here), with the biggest being the Sunday market at the Civic Center, and other new markets are planned, such as the one proposed for Marinwood Plaza. But as the WSJ reports, there are not enough customers to support all the markets, so income for the farmers is falling to a level where it is not worth their while setting up their stalls. The problems caused by an over-saturation of farmers' markets in Marin were highlighted last week in an op-ed piece in the Marin IJ by the Marin Agricultural Institute, which organizes farmers markets in Marin.

The WSJ reveals that there is (or was) good money to made at farmers markets:

Amber Balakian, a fourth-generation farmer from Balakian Farms in Reedley, about 20 miles south of Fresno, has experienced the deteriorating economics firsthand. Her family sets up shop at the San Francisco Ferry Building farmers' market on Saturdays. While they used to ring up sales of $10,000 per trip, there are so many other markets drawing visitors away that "now we make half that" at the Ferry Building market, she says.
This past year, Ms. Balakian, 24 years old, drove more than 200 miles each week to a one-year-old market held in a Whole Foods parking lot in Mill Valley. The market started at 9 a.m. each Friday, so Ms. Balakian often arrived the night before and spent the night in a hotel before selling the tomatoes, peaches and carrots her family grows on its 75-acre farm. On a good day, she sold about $3,000.
But Ms. Balakian recently tried selling at farmers markets in Pleasanton and Los Altos, where "we didn't make enough to cover our expenses," she says. She adds that she sold "maybe $500" in produce at the Los Altos market.

Let's hope that we keep supporting our local farmers' markets. But as organic and local produce catches on with mainstream supermarkets, and additional permanent organic markets open (such as the new Whole Foods in Mill Valley and Novato), we may see fewer farmers' markets operating in Marin in the future.

Sausalito - Bridgeway South

2010-02-07T17:04:00.000-08:00

Below are a few more photos from my tour of Sausalito. This set covers the southern part of Bridgeway, from Horizons Restaurant to the intersection with Princess Street, and including the stores on Princess Street itself.

It's a mix of cafes, boutiques, art and gift shops, most of which are independent, or mom & pop stores, though there are a couple of national chains, including Starbucks and Benetton.
There are only one or two vacant stores in this part of the town, and many of the retailers have been present for many years. The architecture is an eclectic mix that includes older style single storey retail units, some modern additions, such as the arched-roof 660 Bridgeway, and converted residential buildings, where small boutiques occupy what looks like someone's front room.

The party's over for Party America

2010-02-05T15:42:00.000-08:00

It looks like it's time to sweep up the confetti, pack away the party poppers and haul out the trash. The Party America store at Cost Plus Plaza in Larkspur is soon to close it's doors. A victim of the recession, you ask? I'm guessing it's more likely a victim of the success brought by it's busy new neighbor: Trader Joe's.

I don't know what rent Party America was paying, but I reckon it's way below the $42 per square foot the owners are asking now. For a shop this size (3,700 sf), that's one of the highest NNN asking rents in the County, and too much for the party people to afford.

So who would take this on? For the whole unit, Walgreens would be my bet. As I mentioned last year, the space may end up subdivided. Then we might get a Starbucks, Panera Bread, or a good local version like Larkspur's Rustic Bakery.

West Marin has a retail sector too

2010-02-04T10:08:00.000-08:00

Think of West Marin and you think of rolling hills and wild beaches, with some farmland, a few small villages and a lot of national parkland. And while West Marin contains more than half of Marin County's land, it is home to just 3% of the county's population.

The size of the retail sector is quite small. According to the West Marin Chamber of Commerce's business directory there are 14 retail stores in West Marin, with a similar number of places to eat and drink (for some reason this list doesn't include any stores in Bolinas or Stinson Beach).

Small grocery stores and services provide for the everyday needs of the population, with a larger number of gift, art and produce stores catering to tourists and other visitors. For larger purchases, most residents travel to the malls, markets and shopping centers in the population centers in the eastern part of the County.

And I didn't just make that last bit up: I took it from a study published last year. The West Marin Taxable Retail Sales Analysis, published by the California State University, Chico, set out to quantify the amount of retail sales that leaks out of West Marin to other areas. Using sales tax and census data, and employing an input/output modelling approach commonly used in economic development studies, the report reckons that West Marinites spend 80% of their retail dollars (or $200 million) outside of the West Marin area. The other key finding is that visitors to West Marin provide an estimated 73% of the sales at retail establishments in the area, with locals providing just 23%.

The study is being followed by a survey of local residents, designed to find out where they shop and why. Then it will be up to local organizations, such as Think Local First of West Marin, to make sense of the findings and put a plan into action to preserve and maybe expand the role of local retail businesses in the West Marin economy.

The store windows of Sausalito

2010-01-30T13:47:00.000-08:00

Sausalito is Marin’s leading tourist-oriented retail destination. While towns like Tiburon and Mill Valley have one or two stores that cater to visitors, the downtown Sausalito area is bursting at the seams with a cornucopia of gift shops, leisurewear boutiques and art galleries.

Walking around Sausalito, you can’t help but be impressed by the sheer variety of merchandise that people must feel compelled to purchase while on their vacations. Sausalito caters to every taste, from the arty (retro sports photographs at the Mark Reuben Gallery) to the artsy (glass guitar sculptures at Petris Gallery) and the artistic (porcelain figurines, everywhere). And while many of the goods on offer can be generously described as hideous, you have to admire the manner in which they are displayed: Sausalito provides an excellent lesson in the art of shop window dressing.

In order to grab the attention of the wandering tourist, it seems the most important tactic is to make eye contact. To do this you will need a multitude of assistants, preferably small, cute, humorous or simply gorgeous. Arrange these assistants in your shop widow in small coordinated groups and in no time the store will be swamped by Germans, Canadians, Taiwanese and the like.

Today’s photo essay pays tribute to the window display artists of Sausalito, and the little armies of people, creatures and things that stare back at you from inside almost every store.

New leases signed, and others refused

2010-01-13T12:40:00.000-08:00

It looks like fans of Peets Coffee will miss out on having a local outlet in Sausalito after the City voted 3-2 to refuse the zoning change required to locate a store on Bridgeway in the town. Despite being a Bay Area operation, Peets is considered "formula retail" because of the number of outlets it has; and chain retailers are banned from the waterside part of downtown Sausalito.

It's good to see local retailers expanding to new outlets in Marin. New leases have been taken in Novato for the Rustic Bakery at 1407 Grant Avenue and Stefano's Pizzeria at the Nave Shopping Center. The Rustic Bakery will be opening their second Marin location (the original bakery & cafe is on Magnolia Avenue, north of Larkspur), while Stefano's will be opening their third store, adding to their existing outlets in Mill Valley and Corte Madera.

Another new eatery expanding in the Novato area is Boca Pizzeria and Wine Bar, which has signed a lease at the renovated Pacheco Plaza. It's an interesting location choice by the owners of Boca Steak and Seafood, who must not be worried about opening a competing restaurant just around the corner from their existing eatery on Ignacio Boulevard.

In Mill Valley, crafts fans can look forward to February 1st, which is when Once Around will (finally) open their doors on Miller Avenue.

Missing in action

2010-01-05T08:50:00.000-08:00

I can't believe that this blog has been around for almost two years and there remain several retail places that I've yet to feature. So here's my top 10 target list for 2010:

Sausalito (a) Bridgeway & (b) Caledonia Street
Marin City
Downtown Mill Valley
Downtown Tiburon
Corte Madera Old Town Square
Magnolia Avenue in Larkspur/Kentfield
East San Rafael / Montecito Plaza
San Rafael to San Anselmo (4th Street)
South San Rafael / Bellam & Andersen
Terra Linda / Scotty's

Any other requests?

Retail Sales Update

2009-12-30T15:23:00.000-08:00

The latest sales tax figures from the California Board of Equalization show that Marin retail sales for the third quarter of 2009 were down 14% from the same period last year. Worst hit was San Rafael, which saw a 21% decline. Novato fared better, with a decline of 8%, while Corte Madera scored the best results, with 0% change from Q3 2008. Over California as a whole, retail sales were down 17%.

The chart above shows the annualized rate of change in retail sales. For the 12-months to September 30 sales fell to approximately $2.7 billion, approximately 18% below the peak of $3.3 billion achieved in 2007, and would have been even lower had it not been for the $100m+ impact of "cash for clunkers" auto sales in August.

Reports from malls and stores around the county suggest plenty of shopping activity over the holiday period. We'll see if this leads to a turnaround for retail sales in the new year.

Larkspur Landing / Marin Country Mart: landscape plans revealed

2009-12-21T11:09:00.000-08:00

The plans for reviving Larkspur Landing Shopping Center (or as it will be known, Marin Country Mart) were revealed today in the North Bay Business Journal. The center's new owner, JS Rosenfield & Co. hopes to find retailers to occupy the 50,000 square feet of space that is

currently either vacant or occupied by non-retail uses.

Goodbye Fountain

The landscape plans approved last month by the City of Larkspur, include renewing the perimeter with $1 million worth of olive trees. In the plaza area, the plans call for removal of the fountain, to be replaced by a play structure and a fire pit.

Landscape improvements will help to freshen the center (although I think it's a mistake to lose the fountain) but the new owner will have to do some impressive leasing to turn the center around and make it relevant as a shopping destination.

Retail sales back on downward track after Cash for Clunkers blip

2009-12-15T17:25:00.000-08:00

As reported in the San Francisco Business Times, California's Cities and Counties are losing millions of dollars because of falling sales tax revenues. As of October, consumers were stubbornly refusing to open their purses and wallets and flash the plastic at stores statewide.

The chart below tracks the annual change in the 1% retail sales distributed to the largest cities in Marin, using data from the California Board of Equalization. The distributions take place 1-2 months after the sales are made; so it looks like the September bump was largely caused by the one-off impact of August spending on "Cash for Clunkers". Distributions were up in the main car dealer locations: +40% in Novato and +14% in Corte Madera.

For Marin County in total, sales tax distributions in September were at the same level as in September 2008. That's an improvement over the year to August, where sales tax revenue averaged $2.2 million per month in 2009, compared with $2.7 million for the same period in 2008.

Come October however, and the sales tax distributions were back on the downward track, averaging -14% below October 2008 for the county as a whole. This is somewhat better than the May-August period this year, when the year-on-year sales decline ranged between -20% to -30%. It could be that retail conditions are improving, or it could be that some of the Clunkers payments carried over into the October numbers. The November figures will be out soon, at which time we will find out more. National indicators suggest an upward trend.

Commercial real estate finance

2009-11-23T20:56:00.000-08:00

Today I went to the Fairmont Hotel in San Francisco, to listen to the speakers, sages and pundits at the Fisher Center's annual Real Estate and Economics Symposium.

The main economic take-away was that the recession is over, employment is not falling as fast and may soon start growing and the housing market has bottomed out.

Great news then: but not for commercial real estate, which has a whole different set of problems. CRE values are down 41% from the peak. RCA's Robert White estimated there's $1.8 trillion of real estate loans originated over the last 6 years where values have fallen more than 25%, effectively wiping out any equity holdings. The value drop hasn't led to many foreclosures yet because net operating income remains cushioned by long leases. Also, banks are choosing to "pretend and extend" while properties can still cover their debt service payments.

This won't continue for long. Around $800 billion of CRE debt will need to be refinanced over the next two years, and commercial vacancy rates are rising and rents still falling. While the banks' cost of capital is essentially zero, they are willing to extend the loans on any property that is cash flow positive, and only foreclose on the weaker under-performing assets. But zero percent Treasuries aren't sustainable. Once they rise (and Ken Rosen expects T-Bills to be at 2.1% by the end of 2010) the performance hurdle will also rise and that will result in many more foreclosures of commercial properties. Only then will the real CRE losses begin to be recognized.

And it'll also be a great time to buy.

The sad saga of Marinwood Plaza

2009-11-19T15:11:00.000-08:00

The village of Marinwood is located midway between San Rafael and Novato. Marinwood Plaza, which is located just west of Highway 101, used to house a Bell Market, which served the neighborhoods of Marinwood and Lucas Valley.

However, the Bell Market closed several years ago, and the Plaza has been mostly vacant and decaying since then. Only a liquor store and dry cleaner somehow survived, and the cleaner is soon to relocate to Hamilton.

Attempts to renovate and relaunch the center have been well-documented, and a summary follows.

Marin County Supervisor Susan Adams viewed the Plaza as an opportunity to develop affordable housing, a view not shared by many local residents. The Marinwood Association is a neighborhood group that has been at the forefront of attempts to get the Marinwood Village off the ground.

Marin County adopted the Marinwood Plaza Master Plan in 2006, with 30,000 sq.ft of retail space and around 100 multifamily residential units, as detailed in the Conceptual Design Plan.

At the end of 2007, hopes were raised when Trammell Crow showed interest in redeveloping the center. The Pacific Sun posted this account of attempts to rebuild the Plaza in January 2008.

And throughout 2008, residents hoped that Trammell Crow would make it happen. But by 2009 it was clear the plan wouldn't work, and activity on the redevelopment stopped.

With a population of just 6,500, the local area just isn't big enough to support a full market, so it makes sense to plan any future redevelopment around residential units, with a smaller retail plaza of 5-6 units at the Miller Creek Road end of the site. Let's hope that another developer sees the opportunity to make this happen when the economy picks back up.

Marin retail news update

2009-11-02T10:07:00.001-08:00

Mill Valley residents can cast their vote to help select a design consultant for the Miller Avenue Streetscape Plan. All fourteen proposals are on the City of MV website, and those with time on their hands can use the evaluation tool to select their favorite consultant.

Over in Corte Madera, The Village will be getting a not-so-glamorous new neighbor when The Home Consignment Center takes over the Lay-Z-Boy space at 801 Tamalpais Avenue.

Nearby, the Old Town Square will be losing one of it's most popular stores when Tamalpais Paint and Color moves to a location in East Corte Madera in January. The current building was offered for sale last year, at which point the paint store was "in the middle of their 10-year lease". Any local residents care to suggest what they would like to see in that space?

Good news for leopard-print throw rug fans: Z Gallerie (Town Center Corte Madera) has emerged from bankruptcy.

A new proposal was unveiled for the Hannah Ranch site in Novato. The development proposal includes a 116-room hotel and a small amount of office, retail and restaurant space, and was greeted with much more enthusiasm than the previous attempt to build a Home Depot at the site.

Paradise Foods opens (partly)

2009-10-26T10:47:00.000-07:00

Took a quick look at the new Paradise Foods market, which quietly opened its doors last week at Pacheco Plaza. The "soft" opening was no doubt engineered to get their staff and systems fully functioning before the official grand opening, November 2.

The photos below show that the store has the wooden floors and shelving units that will look familiar to fans of the original Paradise Drive market. Also present are the deli counter with gourmet sandwiches at $6-$7, and the well-stocked meat and fish counters, which were getting the most attention from the small number of shoppers in the store.

Another hallmark of Paradise Foods is their range of prepared foods and meals, which are made on site. Lots of these to choose from, including salads, burritos, meat and rice dishes. prices range from $7 for a meal for one, through to $35 for a party-sized lasagna.

The Pacheco store is much bigger than the Corte Madera Store, so the aisles are wide, and there are open spaces at each side of the store and plenty of room around the checkouts. Some of the shelves are also empty, though we'll assume they'll be fully stocked by the time of the official opening next week.

As for Pacheco Plaza itself, the remodel is coming together, with nice landscaping and new shading that's brought the center into the 21st century. The photos I took last year look like they came from the 1970s. What they need now is a few more new specialty stores to breathe some new energy into the mix.

Oh, and is it too late to do something about that huge electricity pylon...?

Weekly news update

2009-10-20T09:17:00.000-07:00

A few stories from around the County this week...

DeLano's in Tam Valley is to get its own Post Annex.

The Marin Store is a new on-line store promoting food, fashion, art etc created in Marin, or made by companies based in Marin.

Peet's proposed new outlet in Sausalito has to pass the "no chains" rule that blocks formula retailers from locating on the waterfront.

Restoration Hardware relaunched it's Corte Madera store last week with a cocktail reception. The store shall be know from here on as something like The Gallery at Restoration Hardware. To emphasize the point, they've hung curtains outside the entrance (see photo). The merchandising matches Resto's recent strategic decision to position themselves at higher price points, and the store has some impressively huge sofas, industrial chic tables and massive metal floor lamps. There's also a new children's section.

Finally, as the opening of the new Paradise Foods at Pacheco Plaza draws near (planned for November 2), I couldn't help but notice a very candid quote in the IJ from the owner, David Gilmore, who said of the new store, "I had been kind of talked into doing this at the start". And while he "feels really good about it now", let's hope the people of Novato feel good about paying top dollar for the store's premium product.

Coming soon... Marin Country Mart

2009-10-12T12:39:00.000-07:00

Marin Country Mart is set to become the new name for the Larkspur Landing Shopping Center. While not much more than the logo has been made public to date, BVN Architects (Ferry Building, Oxbow Market) have been quietly working on plans for refurbishing the mall, which was purchased by JS Rosenfield in January this year.

The LA Times last week carried an article about Rosenfield and his retail philosophy, which is based around the Brentwood Country Mart:

Built to woo shoppers in a more rural Brentwood neighborhood after World War II, the red wooden structures evoke a country marketplace with stores and stalls that ramble around a courtyard. Along narrow walkways, doors open horse-stall style, offering views inside the smudged shoe repair stand, tiny post office and other shops.

But make no mistake, the Brentwood Country Mart is filet mignon masquerading as meatloaf. A posh Beverly Hills restaurant runs the humble-looking taco stand. Wealthy locals and a sprinkling of celebrities come here to hang out, maybe get a haircut or shop at 20-odd stores that sell merchandise such as mouth-blown Italian vases and hand-painted furniture.

Bring it on. If there's one thing we're short of in Marin, it's hand-painted furniture.

Kohl's arrives in Marin

2009-10-04T11:34:00.000-07:00

It's not every week we see a new department store in Marin, so the arrival of Kohl's at Northgate has to count as a major retail event. The owners of Northgate had some good fortune when Mervyns went into bankruptcy last year and closed all their stores. What could have been a problem turned out to be a bonus when Kohl's snapped up the Northgate anchor store, along with many others across California. And the timing was perfect, with Northgate embarking on a major renovation that is heading for completion at the end of this year.

Externally, the main change, aside from the new name and a lick of paint, is that the Kohl's box is now separated from the rest of the center. The internal mall that used to connect to the old Mervyn's has gone, replaced by what will eventually be an outdoor "Oak Plaza", with roadside restaurants and stores. You can see the tree in the photos below, plus the new units attached to Kohl's, which will include Panera Bread and Roadside BBQ.

Inside, the transformation is more dramatic. There are no structural changes to the Mervyn's box, and the floor plan is a simple racetrack layout, with a pair of escalators in the center to move between the two levels. But the internal furnishings and displays are all new and the presentation of the merchandise is very well done. It looks, feels and smells like a new store.

The store is not very large, so apparel takes up the majority of the space. The lower level is mostly clothing, with a jewelry/accessory section. A lot of the upper level is taken by kids clothing, together with shoes and a home/bath section.

Most department stores place checkouts throughout the store, but here the checkouts are all located together close to the main entrance, which is more like a Target or other discount store.

The customer service desk is on the upper level (pictured below).

Kohl's branding strategy includes the usual mix of own-brands, industry favorites and exclusive designers. A lot of the merchandise carries one of Kohl's own store brands; I saw names like Sonoma Life and Croft & Barrow. Nike, Fila, Levis and Lee jeans are heavily promoted. The exclusive brands include Dana Buchman and Simply Vera Wang. I also noted Tony Hawk skatewear, Elle clothing, Chaps and Lauren Conrad.

Overall, first impressions of Kohl's were very positive. The staff are clearly motivated, and there are plenty of them. The merchandise looks good and the prices look competitive. The whole experience is completely different to the sad state that Mervyn's had reached towards the end. It is also clearly superior to the Sears and Macy's stores at Northgate, and hopefully it will spur those stores, particularly Sears, to make improvements.

Friday news update

2009-10-02T12:55:00.000-07:00

Walgreens is poised to take over the space vacated by Pier 1 Imports at Northgate One in Terra Linda. The move is likely to be less controversial than the proposed new Walgreens in Novato, which will be built on the Mission Lodge Hotel site at Diablo Avenue and Redwood Blvd.

A big disappointment to the well-dressed man around Mill Valley is the closure of Wilkes Bashford.

Social media is finally catching on with Marin's shopping malls. The Town Center at Corte Madera now has a Twitter page, as does The Village. Also on Twitter are Andy's Market and Northgate, which also has a Facebook page.

But the big news event of the week was the arrival of Kohl's department store, which opened at Northgate this Wednesday. A full report will be coming soon.

999 Grant is back on the market.

2009-09-28T12:48:00.000-07:00

News from the Novato Advance that Catlin properties has given up on it's proposed mixed use development at 999 Grant Avenue in Novato and has put the planned project up for sale.

Occupying a prime site at the intersection of Grant Ave and Redwood Blvd, the developers failed to attract any interest for the 10,000 sq.ft of retail space, which was initially offered at $4 per sq.ft - which is almost twice the going rate for retail space in the area.

Weekly news roundup

2009-09-21T16:03:00.000-07:00

In San Rafael there is a public hearing tonight (9-21) at 8.00pm where the City Council will be discussing the proposed Mi Pueblo grocery store at 330 Bellam Blvd.

If you want to have your say on the revised plans for the relocation of Corbett's ACE Hardware store to 800 Magnolia in Larkspur, there's a Planning Commission hearing September 22nd.

In Novato, All Star party rentals has relocated from Grant Avenue to Olive Avenue. Meanwhile, eleven stores on Grant Avenue have signed up for Novato Redevelopment Agency's Grant Avenue Facade Development Program. The program provides up to half the cost of improvements to the building's exterior.

The renovation of Northgate continues on schedule, with the grand opening of Kohl's planned for Sept 30th. In case you missed it, the latest announcement of new stores to take space in the mall includes a 2-level, 28,000 sq.ft Forever 21, and new-to-Marin fashion stores Hot Topic (think Twilight T-shirts) and North Bay shoe retailer Sole Desire.

Marin retail sector shrinks below 2002/03 levels

2009-09-15T09:35:00.000-07:00

Retail sales in Marin are now lower than they were during the last economic slowdown. In 2002-03, following the tech crash, the annual value of taxable retail sales in the county fell to $2.85 billion. In the following five years, the economy recovered and sales increased to a peak of $3.3bn at the beginning of 2007. Today, just two years later, that gain has been reversed, and retail sales are heading fast towards levels not seen since the 1990s.

The chart above shows trailing 12-months taxable retail sales and the average annual % change for Marin County. The estimate is based on data released by the California State Board of Equalization, which tracks the 1% of taxable retail sales that are distributed to local cities and counties where the retail sales are originated. Trailing 12-months sales are now -14% down from the previous year, with most of this impact occuring in the last few months: June 2009 distributions were -29.8% lower than June 2008, -18.2% lower for July 2009 and -24.1% lower for August 2009.

Marin’s experience matches the US trend. Retail sales data released by the US Census Bureau today show that retail sales dropped sharply earlier this year, although the 5.3% y-o-y decline in sales for August may be an indicator that the worst is over.

Several of Marin’s cities will be hoping that sales don’t fall much farther because retail sales tax provides a large slice of their income. In August 2009, the 1% sales tax distributed to the City of San Rafael was down 28% or $350,000 from August 2008; Novato declined by 22.4% ($125,000), and Corte Madera was down 19.4% ($78,000).

Gap is 40... but sales are down.

2009-08-20T16:28:00.000-07:00

Congratulations to Gap on its 4oth birthday tomorrow.

"On August 21, 1969, Don and Doris Fisher opened a shop in San Francisco called Gap that sold jeans and records. Now Gap is one of the most iconic brands of our time and jeans have become the foundation of everyone’s wardrobe,” said Marka Hansen, president of Gap North America.

To celebrate, there will be simultaneous acoustic performances at 700 Gap stores across the country on the evening of Thursday, August 20 (tonight), including the store at The Village at Corte Madera.

Unfortunately, there is still no end in sight for Gap's deteriorating sales performance. The retailer has now recorded negative sales growth for a staggering 20 quarters. That the company has managed to survive for so long on such poor results is due to its huge $2 billion cash reserves, plus cost cutting and inventory management that has helped to maintain profit levels.

The downside of Gap's cost cutting is the impact it has on merchandising. The group's stores are struggling to remain relevant in the face of strong competition from the likes of American Apparel and Abercrombie & Fitch.

Meanwhile, merchandise quality at Banana Republic is noticeably poorer. Right now I'm wearing shoes I bought from BR three years ago. They're Italian made and excellent quality. Similar shoes for sale today at BR are poorer quality stock made in China or India and selling for the same price. The result is improved margins for Gap in the short term, but bad news for long term customer retention.

Novato DeLano's to close

2009-08-06T09:40:00.000-07:00

The Novato Grocery War claimed it's first victim yesterday, with news of the closure of DeLano's at Novato Square. DeLano's was always the weakest of the incumbent grocers in Novato, so no major surprise that the store was getting hit by the slowdown in consumer spending and the new competition from the Hamilton Safeway , Trader Joe's at The Village and Grocery Outlet.

Despite the DeLano's exit, there are more battles ahead for Novato's markets, with Whole Foods and Paradise Foods scheduled to open within the next few months. I wouldn't be surprised to see either of these stores postponing their opening given the current state of the economy, and in particular a lot of negative press about the viability and impact of the Whole Foods / Millworks development, which has switched from condos to apartments after only 2 of the 124 units were sold.

But if the stores open as planned, the underlying problem will remain - that with these new stores, Novato will have too much grocery space for its population, and the grocery war will surely claim another victim.

Trader Joe's Larkspur to open Friday

2009-07-22T07:43:00.000-07:00

Get out your Hawaiian shirts and head down to Cost Plus Plaza for the grand opening of Trader Joe's new store this Friday.

Trader Joe's is privately owned by the German group that also owns Aldi, and is notoriously reluctant to disclose information about its operations. This is something that has earned the wrath of organizations like Greenpeace, which set up the spoof Traitor Joe's website to highlight their concerns about the company's seafood purchases.

Miller Avenue: vacant store update

2009-07-12T11:08:00.000-07:00

An update on the retail space available to lease on Miller Avenue. There are usually one or two units on the market as part of the normal cycle of business openings and closures. At the moment there are a few extra vacant spaces, with several businesses being hit by the recession and there being few start-ups to replace them.

First, the fast food joint previously occupied by Jack in the Box has been sitting vacant for a long time. The chairs are out, the sun shades are up, but nobody's home.

Ciao Bella we previously mentioned. Disappearing under ivy on the east side of the Avenue. The store is close to the new new Tam Commons development, so might benefit from new activity in this area.

Opposite Whole Foods are two adjacent units in a prime location, but previously occupied by retailers with marginal business models: Lolipop candy store and Gourmet Garden To Go, a provider of take-out entrees.

Further north on the west side are two larger units whose long-time businesses closed in recent months. One was the auto parts store at 360.

The other was previously the toy store at 352. Now being fitted out by a new business venture called Once Around, which will be a craft/gift shop when it opens in the fall. You can follow their progress on their website as they get ready to open.

Finally, the unit previously occupied by the electric vehicle showroom now stands vacant. Concept maybe a year or two ahead of its time?

Smith & Hawken to liquidate

2009-07-09T08:31:00.000-07:00

News today that Smith & Hawken, the chain of garden & outdoor stores that started out in Mill Valley in 1979, is to liquidate, closing all 58 stores by the end of the year. It's a double blow for Marin, with 70 jobs lost at the company's head office in Novato, and another 30 at the store in Strawberry Village.

Miller Avenue, Part 2

2009-07-03T06:53:00.001-07:00

This is Part 2 of our look at Miller Avenue in Mill Valley. Let's start with Whole Foods, which is the main anchor store that draws a lot of shoppers to the area. How important WF is for the viability of Miller Avenue may be tested in the future if the company decides to shutter the store after opening its new MV location at the Alto Center next year. The Miller Ave store is the smallest Whole Foods store in the nation, but is believed to have one of the highest sales intensities (sales per square foot). The combined size of the old and new Mill Valley stores will be less than 40,000 sq.ft, which is the typical size of most new WF stores (such as the one in Novato), so I would expect that while it is not very efficient to operate two stores in the same market, there are enough dollars in southern Marin to keep both stores running profitably.
To the south of WF is the coolest furniture store in Marin: Design Within Reach.

Directly opposite Whole Foods, at 401 Miller is a commercial block that includes the Marin Theatre Company, Cactus Cafe, Jolly King Liquors, and to the rear, the unbeatable Mama's Royal Cafe.

Hidden away behind the Theatre Company is a small retail center that includes a General Hardware store, a small Sloat Garden Center, a deli and a nail salon. There's also the pet grooming store with the unforgettable name: Doggie Style.

It's a ramshackle little center that is earmarked for removal by the Miller Avenue Precise Plan. If that ever happens, it's unlikely that stores like General Hardware and the garden center would find alternative affordable sites in the Miller Avenue area.

Weekly news update

2009-07-02T13:21:00.000-07:00

The Novato Advance opens up a debate around development planning for the North Redwood Boulevard corridor, including the usual shock and outrage that it will ruin the small town feel of Novato, and landowners manouvering to sell plots for development, in this case it's the Dairymans Feedmill, which would make a lovely mall.

There are several new retailers and restaurants opening in Tiburon, including Bistro 35, which will replace the Sweden House. May Madison kitchen store on Main Street, and on Ark Row there's Elixir, Prima Palate and Pure Elegance.

For gadget fans, Brookstone will be taking over the space vacated by Shabby Chic at the Village at Corte Madera. It's second time around for Brookstone, after it's previous store was dumped last year to make way for Lacoste. (btw, has anyone out there ever seen a shopper in Lacoste?)

Miller Avenue in Mill Valley

2009-06-29T21:35:00.000-07:00

Miller Avenue is the long boulevard that leads into Mill Valley from the south. It's a historic street that follows the path of the original railroad and contains a mix of uses, including many retail stores that serve the local neighborhoods of Sycamore Park and Homestead Valley. The area's history is covered in detail in this excellent piece by Matthew Stafford in the Pacific Sun.

In recent years Miller Avenue has made the news through the preparation of the Miller Avenue Precise Plan (MAPP), which is the City of Mill Valley's attempt to beautify and enable limited development in the area, make more efficient use of the commercial spaces and add affordable housing. This being southern Marin, the MAPP caused quite a stir, particularly among those that want to retain the small town atmosphere in the neighborhood. A local group called the Friends of Mill Valley were very active in the debate and produced an alternative MAPP, pointing out that the City's proposal could result in a lot more development than was anticipated, with resulting impacts on traffic and local services. With no final resolution on the Plan, the City has focused on developing a Streetscape Plan for the Avenue.

One new project that is typical of the kind of development envisioned for Miller Avenue is Tamalpais Commons. This is a mixed use development at the southern end of the Avenue's commercial area, which includes street level retail uses, upper level residential apartments and a separate block of 12 townhouses.

The commercial part of Miller Avenue starts at the southern end with a mid-sized Safeway supermarket. The area immediately north of Safeway is sparsely developed and is one of the main areas of focus for increased density by MAPP. A solitary Taco Bell / KFC stands on the west of the road. On the east side there's a medical center, Wells Fargo, the Tam Commons site, Grilly's mexican diner and Malugani TiresMy favorite building is the Caletti Construction building, which looks like a huge pile of sticks.

Other stores along this part of the commercial strip, south of Whole Foods, include the Art & Paper store and Cafe of Life Chiropractic.

It's not easy to make a living on this part of the strip - ask Ciao Bella, gradually succumbing to the ivy.

I'll put up some more photos in Part 2 of the Miller Avenue story, later this week.

Whole Foods unveils Mill Valley store plans

2009-06-23T08:51:00.000-07:00

Now that Trader Joe's has started to fit out its new Larkspur store, the much-delayed development of the new Whole Foods store in Mill Valley is lurching another step forward with a public meeting to review the store's exterior design plans, at the Mill Valley Zoning Administrator (3pm Wednesday).

When it opens, the Whole Foods store will look very different to the Albertsons store it is replacing. According to the staff report, the plans for the exterior include a new brick facade and wooden pillars, with the intent to resemble a farmers market.

Green features will include a 400 sqft recycling/composting stucture at the rear of the store. The renovation will be designed to LEED Silver level, as required by the City.

The traffic study projects that the new Whole Foods will generate approximately twice the number of visits as the old Albertsons, with an estimated 5,890 average daily vehicle trips to the store, compared with 2,945 for Albertsons. However, the report claims that this will have a "less than significant" impact on traffic in the local area, and that the existing car parking and traffic intersections can adequately cope with the increase. Hmm... My guess is that anyone who regularly passes through the Blithedale/Camino Alto intersection might beg to differ.

After gaining approval for the exterior design, permits can then be issued for the building work to commence, with an opening date in early 2010.

UPDATE: additional reporting from the Mill Valley Herald, IJ and More Marin.

More pain ahead for retail real estate

2009-06-18T11:10:00.000-07:00

News for retailers - and especially retail real estate - continues to get worse. The rotten housing market and rising employment are pushing consumer spending down. Retailers are shuttering stores and heading to the bankruptcy court in record numbers. This week it was JJill, Eddie Bauer and RUEHL. Which retailers will it be next week? And there's a tidal wave of commercial real estate loans due for maturity in the next two years.

Seeking Alpha sums up the pain with an article about how to profit from the fallout. The unhappy answer is: go short on mall REITs.

Now the good news: Trader Joe's will open August in Larkspur! Yay!

RREEF's retail outlook is too dismal

2009-06-11T11:45:00.000-07:00

RREEF yesterday published a dismal view of the outlook for retail real estate. “Done Shopping: Structural Shifts in the US Retail Sector” concludes that the retail sector is going through profound structural changes that will result in lower rates of growth in retail spending in the future, which will translate into fewer stores and more failed retail centers: up to 10% of shopping centers may be forced to close.

Whilst the cyclical impact of the recession is causing pain throughout the sector, with store and mall closures in abundance, the report identifies longer term structural changes that will have a lasting effect, causing retail spending to grow at only half the rate that it achieved over the previous cycle.

RREEF’s main argument is that consumer spending in recent years was boosted by the housing boom and stock market rally, and without these factors spending will expand at only half the rate. The problem is that the data doesn’t show any evidence of such a boost:

“real retail spending including motor vehicles actually grew at about the same rate during the housing bubble as during the preceding four decades”.

I guess what RREEF is implying is that retail growth over 2002-2008 should have been below the historic trend rate, but the housing and stock market booms kept the growth rate artificially inflated. So when the recovery occurs without these factors, retail spending will reset at a lower rate.

The report claims that the key structural changes that will impact retail sales growth are demographic. As the baby-boomer generation moves into retirement, boomers will cut back on retail spending. Census data shows retiree age groups tend to spend less than pre-retirees. That may be true historically, but this is the baby boomers we’re talking about. They are wealthier than previous generations of retirees; many will be retiring with generous pension plans, mortgages paid off, kids left home, medical plans in place and plenty of leisure time. I’ve heard a lot of talk about the great opportunities that will be provided by the huge baby boomer retirement market. I don’t buy the RREEF line that

“as they age, baby boomers will have decreased needs for retail goods and will be conserving more cash as they retire.”

I think they’re more likely to take their spending habits with them into retirement.

RREEF also concludes that that population growth will be regionally focused and will be biased towards ethnic groups, and these ethnic groups tend to live in different locations and have different shopping habits. This is certainly an ongoing trend, but this is nothing new and nothing that retailers and retail real estate owners aren’t already fully aware of. And at the macro level, unless this trend has a negative impact on household income growth, I don’t see it impacting retail spending growth.

Overall, I disagree with RREEF’s pessimistic view. The data shows that retail growth didn't accellerate during the housing boom, and there's no evidence that structural changes will have a negative impact on retail spending. I don’t see any significant reasons why the retail sector won’t bounce back strongly when the economy recovers. Innovation will fuel economic growth once more, household incomes will grow again and retail spending will too. New retailers will emerge to challenge the existing chains and retailing – and retail real estate – will continue to change, adapt and grow.

This week's news stories

2009-06-08T17:30:00.000-07:00

Lots of buzz this week about the new farmers market at the Alto Center in Mill Valley. "Where's the Alto Center?" was the question most asked, because most people know the strip of stores as "y'know, next to Albertson's", or "by the MV Post Office". Alas, poor Albertson's still stands empty, despite being snatched up by Whole Foods after it closed in 2007. According to a WF manager quoted in the IJ, we won't be seeing the store open until 2010 because the City has asked for a traffic study. Do they really need a traffic study when the building is changing hands from a market to... another market..? Anyway, apparently the farmers market was a hit and will be a regular attraction Friday mornings until at least November. Anna has some photos here.

More great news if, like me, you can think of nothing more enjoyable than wasting the occasional hour hanging out at Sports Authority. The store at Vintage Oaks is set to expand into the adjacent space that was vacated by the Shoe Pavillion bankruptcy last year.

Meanwhile, design firms are among the retailers being forced to shut their doors by the slow economy. The Marin IJ reports on Paper White and Green Fusion, two such businesses that are closing in San Rafael.

Finally, worth checking out is the Tavern at Lark Creek, which opened in Larkspur last week.

What to do with Marin's vacant car lots?

2009-06-02T09:11:00.000-07:00

In the wake of GM's bankruptcy, the Marin IJ reports on the last of the remaining Detroit automaker dealerships in the county: Novato Chevrolet and Novato Ford. Sales at the Chevvy dealer are down 40%, but the owner is hopeful that they'll be able to stay in business. Sales at the Ford dealer are flat, indicating they've picked up some business from San Rafael Ford, which closed last year. In addition to San Rafael Ford, San Rafael Chevrolet closed in February this year, and the John Irish Chrysler dealer closed in 2007.

With the future outlook for auto sales looking bleak, what other uses might we see coming in to take over the vacant sites? Retail Traffic identifies a few options:

Approximately 25 percent to 30 percent of the dealership sites about to hit the market will likely be taken over by other car brands, estimates James Mitchell, director of the national automotive group with Marcus & Millichap Real Estate Services, an Encino, Calif.-based real estate brokerage firm. The rest of the sites, however, face an uncertain future. In the past, car dealerships were considered attractive acquisitions by developers of strip centers, small office buildings and hotels as many boast good frontage, are in high traffic locations on major thoroughfares and sit on parcels that have already been graded and require minimal site work.

And this CNBC pundit sees opportunity in the land vacated by car dealers.

But considering the rise in vacancies in commercial real estate over the last year, there are plenty of alternative sites available in Marin County, including office space vacated by Autodesk, and big box retail vacated by Circuit City, plus planned development sites that have now been abandoned. Developers are unlikely to go to the effort of permitting and developing a car dealer site when other easier alternatives are available.

So do not expect to see any new concepts opening anytime soon on the abandoned car lots. But smart operators with an eye on the long term might snatch up sites with good visibility and access for conversion to retail development when the good times come back.

News in brief

2009-05-29T14:36:00.000-07:00

Some retail-related news stories kicking around this week:

Marin County retail sales in the fourth quarter of 2008 were 14.1% lower than the same quarter in 2007. Novato's sales were down 7.1%. (That's taxable retail sales) Source: the Quarterly Sales Tax Update prepared for the City of Novato.

The City of San Rafael is to complete the Environmental Impact Report for the proposed Target superstore, even though the project is on hold. Source: Marin IJ

The Tavern at Lark Creek will open next week (June 3rd), replacing the Lark Creek Inn. According to the blurb, the Tavern will offer "a seasonally driven menu that highlights elevated crowd favorites. Main courses will be under $15". Sounds great - unless you're the nearest competing restaurant in the under$15 category, which just happens to be the Yankee Clipper, also owned by the Lark Creek Group...

The Marin IJ sent a reporter to the community meeting for the North Redwood Boulevard Corridor and found a surprising degree of consensus: Yes to a new hotel (because it will create tax revenue); Yes to narrowing Redwood Boulevard; Yes to large format retailers; but No to the proposed Walgreens.

Northgate is leading the race to adopt social media. The mall now has a Facebook page to go with it's Twitter account. Unfortunately the mall is still under serious renovation, so to make up for the absence of stores, it is posting some delightful photos of piles of construction rubble.

Downtown Novato Community Workshop

2009-05-26T12:59:00.000-07:00

If you have an interest in the future shape of downtown Novato, make sure you go along to the Community Workshop tomorrow (May 27) to review the North Redwood Boulevard (NRB)Planning Study.

The NRB corridor encompasses the majority of the downtown area, from Grant Street northwards as far as Atherton Avenue. The area currently has a mix of land uses, including residential, automotive, retail and industrial buildings, and some vacant and unused lots. In March the City of Novato released an Options Study (large file) that discusses the constraints and opportunities for development in the area. One of the key items on the agenda for tomorrow will be how to promote new retail/commercial development in the area without compromising the viability of existing downtown businesses along Grant Avenue. It will also be interesting to hear views on the impact of the decision not to position a SMART railroad station in the downtown area.

For me, the biggest opportunity to revitalize downtown Novato is to develop more medium/high density housing. Housing creates activity and vitality and supports the development of retail and commercial businesses. It needs excellent planning, to overcome the conflicts with existing non-residential uses, and specific issues in the area, such as freeway noise and flood zones. And it really needs great transit. But with the SMART budget already $150m in deficit, the chances of getting that downtown station back on the agenda are looking slim.

*UPDATE

The City of Novato has put up some alternative plans for development of the corridor on its website here.

Store of the Week

2009-05-15T09:34:00.000-07:00

Yesterday I checked out a few recently-opened stores in downtown San Francisco. I was expecting to see some vacant spaces as more retailers fall victim to the slowdown in consumer spending, and there were certainly a few around, including the Gap store at Post & Kearney and Ann Taylor on Post Street. The Crocker Galleria has always had a few empty spaces, and looked like it had recently lost the Malm luggage store.

But it was great to see several new stores around Union Square. Here's a few to check out next time you're in the area:

ILORI at 238 Post St for sunglasses - they had an extensive range from the top designers.

7 for all mankind for limited edition jeans and more at 224 Grant.

Tory Burch has been open a few months at 50 Maiden Lane.

But the Store of the Week award goes to Paul Smith at Grant & Geary. This is the kind of store that will get you excited about retailing. The product is innovative, fun and cutting edge, and the presentation is inspiring. I found a review of store and an interview with Smith here.

H&M moving forward with Northgate store

2009-05-13T22:49:00.000-07:00

According to the IJ, fashion retailer H&M is moving forward with plans to open a store at the renovated Northgate Mall in San Rafael, and has submitted tenant improvement plans to the City for approval.

H&M has been getting a lot of good press recently with its limited edition ranges from major fashion designers. The Mathew Williamson collection nearly caused riots in some stores last month. However, most stock competes in the Gap / Zara / American Apparel price range.

The addition of H&M is in line with the teen-market positioning of the fashion component of the revamped mall, but is not news. The leasing plan released last year by Macerich identified H&M as the proposed tenant of unit 129 (view the current leasing plan on the mall website, but with store names now removed) in one of the largest specialty store spaces, at 14,200 square feet, with a 12,800 sf mezzanine level.

Other stores to look out for, according to my copy of the original leasing plan, are A&F's Hollister in unit 014; Forever 21, proposed for unit 139; American Eagle Outfitters in unit 078; Aeropostale in 074; Charlotte Russe in 145; and Wet Seal in 151.

On another note, it looks like Northgate is the first shopping center in Marin to start Twittering! You can follow them here.

Attack of the acid wash

2009-05-13T08:36:00.000-07:00

Insight from the WSJ today on how retailers like Macy's are pursuing customers of bankrupt rivals such as Mervyn's. Apparently, they are adjusting their product mix to target the local market, using techniques such as this bit of fabulous ethnic stereotyping:

Retailers are getting help from manufacturers eager to cut their own losses. Levi Strauss & Co. recently advised its West Coast customers how to take advantage of Mervyn's closing. Robert Hanson, Levi's president of the Americas, said the company urged retailers to buy smaller sizes and more "extreme finishings," such as acid washes, to attract Mervyn's Hispanic customers.

After yesterday's quote from Mi Pueblo Foods about men working and women shopping with their kids, it looks like we can add political correctness to the list of casualties of the recession.

Mi Pueblo heading to East San Rafael

2009-05-12T09:44:00.000-07:00

Mi Pueblo Foods, a Bay Area hispanic grocery store, is aiming to take over the old Circuit City store on Bellam Blvd in East San Rafael. According to the North Bay Business Journal, the store submitted a planning application to the City at the end of March and there will be a hearing at the City May 19th.

Juvenal Chavez, CEO of Mi Pueblo explains what the store is about:

Mi Pueblo’s competitive advantage comes from high standards for operational efficiency, respectful service and store environment as well as a selection of products that is sensitive to the interests of a given community and cultural distinctions between Hispanic consumers. That means understanding how color and decor cues differ between the states in Mexico and with southern Mexico, Central and South America.
Also, included in store design are large inside and outside areas that provide gathering places for groups of men who work or live together as well as women with children while shopping.
Employee training also is key to the appeal. The 200 or so employees to be hired for the San Rafael store may come in without a lot of skills, but they will learn how to meet cost targets for each department as well as how to win each customer with common courtesies such as looking them in the eye.

Great to see new businesses entering the county and taking advantage of opportunities as underperforming stores close.

San Anselmo (continued)

2009-05-05T22:59:00.000-07:00

Some more photos of San Anselmo. All of these were taken on San Anselmo Avenue, which is the town's main street, located just to the west of Sir Francis Drake Blvd where it meets Red Hill Ave. San Anselmo Ave. runs along the infamous San Anselmo Creek, which is responsible for most of the interesting events in the town's history, as it tends to flood every few years, most recently on new years eve 2005.

The Avenue has around 80 retail stores and eateries, with a good mix of old style services (barber shop, watch repairs), a few ancient-looking boutiques and specialty stores (Chadwicks of London, Vintage Flamingo) and old & new antique and home furnishing stores (French Nest, Studiolo). Other stores worth seeking out include Rosetti (Italian notebooks), Kismet (ladies boutique), Fig Garden and the new Primo Regali (ceramics).

Northgate Mall's makeover taking shape

2009-05-04T17:51:00.000-07:00

At last the scaffolding has come down around the first phase of Northgate Mall's renovation. And the Macerich team have kindly posted some new photos of the work in progress on the mall's website.

The retro/industrial warehouse look is evident in the photo below, which shows the renovated eastern mall and the existing Gap store. (Click on the picture for larger version).
The US Bank has some nice brick detailing. Shame about the ugly black windows.

I'm liking the new entry adjacent to the Century Theatres.

Here's the food court, complete with chairs and tables, but no sign of any eateries.

Another view of the eastern mall, next to the Macy's entrance I think.

Follow the link above to the website for more pictures. And here are some of the previous pictures.