RETAIL IN ALAMEDA: What stores can we attract?
RETAIL IN ALAMEDA: What stores can we attract?
A map of Alameda's commercial districts. Courtesy of the City of Alameda website.
For years, Alameda has served as a destination for onetime city dwellers who prize its vintage homes, tree-lined streets and not-too-suburban feel. But almost as often as not, Alamedans leave the Island to buy the things they need.
Alamedans spend $960 million a year at grocery stores, clothing shops and other retail outlets – 44 percent of which is handed to merchants operating off-Island, according to the city’s estimates. About $13,000 of the roughly $30,000 Alameda’s households are estimated to spend in retail outlets each year buys goods somewhere else, one study found.
“We have retail leakage in pretty much every category,” Interim Community Development Director Debbie Potter said.
The in-progress development of the long-awaited Alameda Landing project near the Webster Tube – a project that includes a 291,000-square-foot Target-anchored shopping center – has stirred hopes at City Hall and citywide that long-desired retailers offering clothing, high-end grocery, paper goods and more will finally come to the Island. But retail experts and city staffers who have been working to bring stores to town said drawing them requires a carefully crafted admixture of demographics, relationships, timing, space – along with a little luck.
“You’ve got to find a retailer you like and they have to be in expansion mode and be willing to expand in Alameda, and like your project and want to be with you,” said Sean Whiskeman, first vice president of development for Catellus, which is developing Alameda Landing.
Macy’s, Whole Foods and Pier 1 were among the stores The Alamedan’s Facebook fans said they’d like to see here when asked last week, along with a stationery store like Paper Source or Papyrus and clothing stores like Gap, J. Crew, H&M and Anthropologie. Both Potter and the real estate people charged with filling Alameda Landing and Alameda South Shore Center said they’d love to have those stores, too.
Whiskeman, who has worked on the Alameda Landing project since 2001, said he’s heard every argument against setting up shop there. He said the developer faces many challenges in making the case for Alameda.
Alameda’s island location and lack of the direct freeway access prized by retailers are some of the city’s biggest barriers in attracting stores, retail experts and city staffers said. Regional retailers like Macy’s, H&M Pottery Barn and Williams-Sonoma want locations with good main street frontage or freeway access that offer a few hundred thousand people from which to draw a store’s customer base, Whiskeman said.
“They might view this kind of Oakland/Berkeley/Alameda market as a one-store market, and they’re at Bay Street (in Emeryville),” Whiskeman said. “In their minds, they’re capturing this market with their store there, which is in a regional location, because it’s in the middle of everybody.”
Retailers are also reluctant to blaze trails into new areas, Potter and others said – a challenge for retail-challenged cities like Alameda. Add to that the fact that the Island has also long been perceived as being hostile to business, though City Manager John Russo said City Hall is working to change that; last year, the city hired a retail consultant, and staffers have drafted marketing materials intended to sell Alameda as a place to do business.
Major changes in the way retailers decide where to put new stores have also had an impact, real estate experts said, as they increasingly rely on detailed demographic and psychographic data – which measures the values, lifestyle and interests of a retailer’s customer base – to find what they hope will profitable markets. The data-driven approach has ushered in an era in which retailers are more cautious about opening new stores.
“In the old days, we used to take one of those city maps you’d get at 7-Eleven and put dots on it, and we’d draw our own little rings. We’d all as brokers cut out rings of a mile. That was our GIS system,” said Peter J. Orlando, a senior vice president with Retail California, a commercial real estate brokerage based in Fresno.
Now, Orlando said, brokers use sophisticated information systems that can generate a “heat map” showing where a retailer’s prospective customers are, and property tours are conducted with demographic data-laden iPads in tow.
But the biggest impact to retail development in recent years has been the economy, which killed a host of major chains and sent others scrambling to redefine themselves.
Two of the three electronics stores Catellus had considered approaching for Alameda Landing went bankrupt after the 2008 crash, as did Borders, which shuttered its South Shore store after less than three years there. Fresh Choice, one of the two healthy food-options readers said they’d like to see here, shut all its restaurants at the end of 2012 (a rep for the other, Sweet Tomatoes, said the company is not expanding now).
After years of closing stores, Gap has begun expanding again – in Asia and South America, according to press releases and an annual report on the company’s website. And other companies are focusing efforts on building a more robust online presence.
“Even a year ago, the only folks who were doing anything were drugstores, banks and fast food, Potter said. Whiskeman said survivors of the crash included luxury goods makers like Coach and discount retailers like TJ Maxx.
With the economy improving, though, city staffers are hopeful Alameda can begin to attract more of the stores that people want – which will help restore a sales tax base that died when all of Park Street’s auto dealers left. They say retailers are beginning to turn away from freeways and to consider underserved markets like Alameda. And they’re hoping the renewed effort to be more welcoming to retailers – along with the hard-fought success of the Park Street shopping district – will entice more of them to plant stores here.
“Alameda is a unique community. And we’ve got the critical mass to support the new retail. We’ve got the leakage. We have an opportunity where you can come and be successful,” said Leigh Boyd, the city’s retail consultant.
Still, they said that stocking a shopping district with the higher-end retailers residents want will take time. Assembling the collection of shops lining Emeryville’s Bay Street and the one on Berkeley’s Fourth Street took decades, Potter and others said; lining Park Street with its existing collection of boutiques and restaurants took a dozen years.
Russo said that he didn’t approach Gap, Anthropologie or Pottery Barn during his recent trip to a retail convention in Las Vegas because “that’s not where we are yet”; the city needs to establish a stronger record of retail success first.
Creating a shopping district that attracts these coveted retailers also requires a singular vision of what a planned shopping center or district could be, retail experts said.
Stephen Rusher of Cornish & Carey Commercial Newmark Knight Frank said he’s marketing Alameda South Shore Center as the place to be for stores serving yoga moms and the stroller set. Just this week, Crazy 8, a Gymboree affiliate, signed a lease; other recent additions include an ULTA beauty store and Weight Watchers.
“We’re presenting a case that if you’re a family friendly retailer, you really should be considering Alameda over Fourth Street in Berkeley or Bayfair (mall in San Leandro),” said Rusher, whose firm has leased out 10 percent of the shopping center over the past two years.
Given its distance from even the entrances to Alameda, Rusher’s firm and the shopping center’s managers are also working to stock the center with unique dining and shopping options not available anywhere else – a list that includes the Total Woman Gym & Day Spa and Trabocco, a new restaurant that will be helmed by an Alameda resident who once supervised chefs and developed recipes for Il Fornaio.
“We need people to come to us. We need to offer something to make them drive an extra 10 minutes,” Rusher said.
Whiskeman said Target “is a pied piper of sorts,” one that could attract some of the clothing and other stores residents want to see on the Island.
He said kids’ clothiers Carters and OshKosh like to set up shop near Target stores, along with tween girl apparel seller Justice and Tillie’s, which serves younger adults. Gap, he said, “would certainly co-tenant with Target, and does.” Men’s Wearhouse could also be a possibility.
He said finding a local presence for the center – something desired by some who don’t want to see a mass invasion of chain stores – is important. “We’ve talked to a few local business owners about expansion here. We expect to talk to a few more. Our door is wide open for it,” he said.
The company has also reached out to local businesses in Oakland, Piedmont and Berkeley regarding expansion opportunities here, and has talked to popular local food purveyors including Zachary’s Pizza and Pluto’s, a San Francisco-based chain that serves up salads and fresh-carved meats.
Ultimately, Whiskeman said Catellus wants to assemble the right mix of national, regional and local stores and restaurants, and he said the developer is working to attract some of the retailers Alamedans are asking for. He said Whole Foods had been to the Landing site “20 times” but ultimately decided it wasn’t the right place for a new store and that the developer has been talking with Pier 1 “and would love to lure them here.” He’d also love to attract a Nordstrom Rack, though he said that they, too, want a home in Emeryville.
“I’m willing to be patient,” Whiskeman said. “I would love for those guys to be here.”
Here’s what retail experts and city staffers said about Alameda’s chances of attracting stores readers want.
Macy’s, H&M: Retail experts said Macy’s and H&M are regional retailers who aren’t likely to come to Alameda; they’re looking at major thoroughfares and large regional malls as sites for their stores. They also noted that Macy’s has been struggling financially and isn’t really expanding now.
Whole Foods: Catellus’s Sean Whiskeman said Whole Foods looked at Alameda Landing but opted not to set up shop there; he and the city’s retail consultant, Leigh Boyd, said they think the grocer will set up a store in Alameda eventually.
Pier 1: Whiskeman said Catellus has talked to Pier 1 about a store in Alameda and would love to have them at Alameda Landing; a Pier 1 rep said the company didn’t have immediate plans to open a new store here and, like most retailers The Alamedan contacted, wouldn’t comment on specific expansion efforts.
Paper Source, Papyrus: A spokesperson for Paper Source wouldn’t comment on specific expansion plans; a Papyrus rep was still gathering details at press time. City Manager John Russo said the city could “absolutely” attract a paper products store.
Gap, Banana Republic, J. Crew: Whiskeman said that middle-tier retailers like these – not selling luxury or discount goods – are struggling to reinvent themselves in the wake of the 2008 crash. He said Alameda could attract a Gap; the clothing company is opening more stores than it’s closing for the first time in several years, though their focus is overseas.
Pottery Barn, Anthropologie: City Manager John Russo said the city needs to offer more proof retailers can be successful here before attracting “lifestyle” retailers like Pottery Barn and Anthropologie.
Fresh Choice, Sweet Tomatoes: Fresh Choice shuttered all of its stores at the end of 2012; a rep for Sweet Tomatoes said the healthy eats chain, which has several East Bay locations, isn’t expanding right now.