Montecito Plaza

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.

Grocery Stores Gone Wild

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.

Trader Joe's to expand in Larkspur

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.

The party's over for Party America

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.

Novato DeLano's to close

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

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.

Whole Foods unveils Mill Valley store plans

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.

Marin Retail: nothing much happening here...

Credit to the North Bay Business Journal for making the effort to report on the state of Marin's retail market. The content was not that exciting, but did include some dry real estate statistics and commentary. Let's interpret:

"Vacancies rise modestly". The vacancy rate in Marin shopping centers increased from 4.0% in 2007 to 6.2% in 2008. So the amount of vacant store space increased by more than 50%. Modest increase? No. But we're still way below the national average of approx. 10%

Average asking rental rates in the county are approx. $28 per sq.ft NNN, and are highger in the south of the county ($36 per sq.ft) than the north ($25 per sq.ft).

"Both Whole Foods and Trader Joes set to add stores in 2009". But don't form a line at the door just yet. The last time I looked, the Novato Whole Foods was not expected to open until spring 2010. And in this economic climate I would be surprised to see any activity at the sites acquired by Whole Foods in Mill Valley and Trader Joes in Larkspur.

Weekend News Feed

The Marin IJ agonizes about dowtown Tiburon becoming a retail wasteland (yes, there are a couple of vacant stores). And see the comments following the story to find out why the popular vote reckons the TPD is to blame. And a plea from Tiburon Town Manager Peggy Curran for residents to patronize their local stores.

Have you seen the Trader Joe's song on YouTube?

Sales are booming for Novato florists. (Okay, it was Valentines Day)

Ann Taylor Loft is smoking hot..http://tinyurl.com/bq3ayp

but there's no smoking at the Town Center Corte Madera..http://tinyurl.com/afz97h

Pacheco Plaza

In Ignacio, just south of Novato, is one of my favorite Marin shopping centers: Pacheco Plaza. This local grocery-anchored center was built in 1967 by the Kieckheffer Company and is still owned by the family. I love it simply for the architecture, which has something modern and typically Californian about it – it’s the shopping center equivalent of an Eichler house. The entrance to the center is framed by the Bank of Marin and West America Bank, with the latter having a neat drive-through tucked under its slanting roof that looks like an upturned planter. The other key elements that I like are the stylish monument sign and the big red Safeway signs on the supermarket. Alas for poor old Pacheco, those big red “S” logos won’t be there for much longer. A gleaming new Safeway in steel and glass is growing out of the ground at Hamilton on the eastern side of 101. In a matter of months the Pacheco store will close, the customers will disappear and the specialty shops will exit.
But of course the Kieckhefers are not going to give up without a fight. After forty one years service to the community they're ready to re-model, re-brand and re-launch! Behold the Pacheco Lifestyle Village! Plans have been submitted and approved. Architects drawings portray ultra-trendy shoppers loaded with full shopping bags and sipping lattes in the sun outside brightly-lit shops. Ah... the dream lifestyle.
I wish them luck and I think they might need it. Lucky Novato-area shoppers will soon have new full size Safeway and Whole Foods markets, as well as the recently-opened Trader Joe’s. Competing with that will be tough, especially with a new Safeway just across the freeway.

But I will certainly miss the old center. Can we at least keep the monument sign? The City wants to replace it with one that is up to code - i.e. no more than six feet tall, like this one at Novato Fair. Yuk!

Larkspur Landing Shopping Center

Larkspur Landing residents will get a new place to stock up on groceries when Grocers Landing opens its doors at the Larkspur Landing Shopping Center. The retailer is currently fitting out one of the vacant units at the eastern end of the mall. According to its website, the store will include gourmet and prepackaged foods.

Larkspur Landing Shopping Center has always struggled to establish its retail identity. It currently has an eclectic mix of stores, eateries, service providers and commercial offices that don’t quite gel.

The center is located off Sir Francis Drake Blvd, just east of the 101 intersection. It is the main component of a mixed-use zone which also includes Century Theatres, a Marriot Courtyard and several garden-style apartment buildings. It is linked by a pedestrian bridge to the Golden Gate Ferry terminal.

There are several separate one and two storey buildings at the center, most of which are clustered around an outdoor pedestrian mall, which contains a nice fountain and is a pleasant spot to sit and have lunch on a sunny day; although there always seems to be a cold breeze blowing through the mall whenever I’m there.

The largest space is occupied by Bed Bath & Beyond, which took over the 42,000 sq.ft box vacated when the original supermarket moved out a few years ago. The other key tenants are Marin Brewing Company, Noonans Bar & Grill and 24-Hour Fitness. Aside from some other eating and drinking places (Starbucks, Tam Cellars, Tha Siam) the remainder of the mall has little to offer, with quasi-retail uses such as AAA travel, a Yoga Studio, beauty salon and several vacant stores. And even though the car park always seems full, the mall is almost always empty. On a midweek afternoon you’re more likely to see tumbleweed than shoppers rolling along between the stores.

The Landing was designed as a grocery-anchored neighborhood retail center. Problem is there’s hardly any neighborhood for it to serve. Neighborhood centers need 10,000 people living in their primary trade area. The Landing’s primary trade area is constrained by natural and man-made barriers: Highway 101 to the west, the Bay to the south, the hills to the north and San Quentin to the east. Less than 1,000 people live in this pocket of land.
I wonder how the developers expected this center to work? Did they think the ferry commuters would stroll over to shop there on their way home? Maybe they anticipated a greater density of new home development in the area. Or perhaps they imagined the 5,000 “residents” of San Quentin State Penitentiary would provide a loyal and regular source of customer traffic.
Without a local customer base, the only businesses that can trade successfully at the center are destination stores, such as the Marin Brewing Company and Bed Bath etc. These businesses are well known throughout central Marin and they work fine, albeit in isolation. We all get the BB&B 20% off coupons in our mail every month, stuff them in our kitchen draw until the next one arrives, then forget to take them with us when it’s time to buy towels.
Destination retailers don’t need to co-locate with a critical mass of other retailers, which is why you find them on stand-alone sites with good visibility and car parking. People drive up, go inside to do their thing, and then leave. Destination shoppers are not there to wander around and browse at nearby stores; hence the vacant units at The Landing.
Perhaps if a major destination grocer – Trader Joe’s or Whole Foods – had taken the ex-Albertsons space instead of BB&B, the rest of the shopping mall would have kept busy enough to keep the stores trading along the mall, the non-retail uses out and the vacancies down. But Trader Joe’s has plans for a new store at the nearby Cost Plus Plaza, and Whole Foods has committed to the old Albertsons site in Mill Valley.

Trader Joe's to open at Cost Plus Plaza

Reports that Trader Joe’s is planning to open a store at Cost Plus Plaza in Larkspur is welcome news to all TJ fans in Southern Marin. As much as we love shopping there, the trek up to the crowded San Rafael outlet, never sure if you are going to get a parking space, can be more pain than pleasure.

Okay, the Cost Plus Plaza isn’t that great a location. Easy enough to get to from the south (Lucky Drive exit), but more difficult when leaving, having to loop around and under the freeway and requiring a left turn out of the car park that the Larkspur city planner will want to take a good look at. Parking should be okay – there are approx. 200 spaces in the car park, which also features some great palm trees sitting in shopping bag-shaped concrete planters.

The extra traffic that Trader Joe’s will bring should be good news for the other tenants at the center. Cost Plus and Bevmo will face increased competition for the liquor trade, but this should be outweighed by new business from additional customers brought to the Plaza by the Trader.

The other stores at the center are Vitamin Shoppe, Mens Wearhouse and Party America, each occupying fairly large units. If TJs is successful the Plaza’s owners may look to re-lease some of these stores to higher-paying tenants, possibly subdividing into smaller units, which gross more rent on a per square foot basis. Think coffee shop, drugstore, bakery, etc.