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City Council of Palo Alto: Urge McNellis Partners not to lease Alma Village space to Grocery Outlet

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It has come to the attention of some Alma Village homeowners (the petitioners) that the developer, McNellis Partners, may be considering deep discount chain Grocery Outlet - Bargain Market as a replacement tenant for Miki's Market.

The City Council and McNellis Partners need more data before signing a lease with Grocery Outlet.

INTRODUCTION

For those who are unfamiliar with Grocery Outlet, it is chain of discounted food stores mostly in the Western US.  The chain sells, among other things, significant amounts of canned, processed, and packaged foods that name brand markets cannot or refuse to sell, because the food may be discontinued, near expiration, overstocked, or otherwise unsaleable.  In many stores, food selection is inconsistent from day to day.

Some Grocery Outlets do have good wine, cheese, and cosmetics selections.  And the prices are indeed very low, sometimes 50% or more less than some name brand stores for certain basic staples and canned goods that are not expired.

IMPACT TO THE COMMUNITY

In the opinion of the petitioners, a Grocery Outlet in Alma Village could have negative consequences for the immediate neighborhood and the entire City of Palo Alto, and violate the spirit of the Ordinance.

The petitioners respectfully ask that all Palo Alto citizens rally together and mobilize against the potential tenancy of Grocery Outlet at Alma Village until more data is gathered, for the following reasons:

Grocery Outlet is not a traditional neighborhood grocery store. The Ordinance for Alma Village only requires that a "grocery store" occupy the space, and "promote the public health, safety and welfare".  However, the petitioners believe Grocery Outlet is not tradiitonal neighborhood grocery store.  The chain's very name contradicts this. The petitioners also believe the chain does not carry a wide enough and consistent enough selection of food (especially nutricious foods) to be a true grocery store.

Grocery Outlet is Desitnation Retail. BusinessDictionary.com defines Destination Retail as: "Popular retailer (catalog, store, or website) from whom customers, attracted by its ambience, price, and/or variety, will make a special effort to buy".  

Because the nearest Grocery Outlets are in Redwood City and southern Santa Clara (a ~20 mile stretch), the petitioners believe the chain's deeply discounted food ("price" in the above definition) would attract shoppers from neighboring cities to make special trips for specific items.  

Trader Joe's was once Destination Retail (based on price) but now they are Local Retail because they have about a dozen stores between Redwood City and San Jose.  One of the earlier Trader Joe's on the Peninsula is in Mountain View.  Even with twice as much parking as Alma Village, its lot used to constantly overflow into adjoining retail lots.  Luckily there was room for the overflow.

KEY QUESTION - Where does Grocery Outlet expect their customer base to come from?  They have no doubt done a site analysis.  The City Council should request a copy of this study.

Severe congestion could result. Destinatoin Retail in Alma Village is fine in theory, but this assumes there is sufficient infrastructure to support it.  Due to the limited parking and poor street access at Alma Village, a large influx of destination shoppers could overwhelm the adjoining intersections, which are already congested from proximity to train crossings and already-high commuter use.  Alma Village's narrow entry ways and tight parking lanes already limit access; add a Grocery Outlet or similar Destination Retail store into the mix and there could be exponentially bigger backups on Alma as people are stopped in the right lane waiting to enter the plaza.  Entire stretches of Alma and intersecting streets nearby Alma Plaza could be impacted.

This extreme congestion could cascade out to many other intersections, streets,  neighborhoods, and nearby Palo Alto schools, making parking difficult for residents, students, and visitors.  A likely increase in resulting traffic incidents could place extra strain on Palo Alto police, medical, and fire resources.

KEY QUESTION - Has the City of Palo Alto Planning Commission done a Traffic Impact Study on the potential for added congestion and traffic incidents?  This is the responsible action to take in this situation.  Grocery Outlet has very likely done a daily customer count forecast (with normally a 1-1 people to car ratio).  The Council shoud request this information before supporting a Grocery Outlet at Alma Village.

There are other bidders. By many accounts, there are other bidders, including stores that the petitioners believe would be a MUCH better fit for the space and the community. According to an April 5th, 2013 Palo Alto Online story, JJ & F Markets is interested in the space. The petitioners are also aware of other possible local market bidders with well-known brands.  A local neighborhood market could be very successful in Alma Village, without resulting in the extreme congestion and harm that would, in the opinion of the petioners, result from a Grocery Outlet or other similar Destination Retail store.

KEY QUESTION - Has McNellis Partners exhausted all other potential bidders on the space?  If other bidders exist the Council should urge McNellis to prioritize those bids in order to support the "health, safety, and welfare" of the community.

The failure of Miki's Market was, in the petitioners' opinions, partly due to a flawed marketing plan (for example, no "market" sign under "Miki's") and no loyal customer base to draw from. Another properly-marketed, mid-to-upscale market with a loyal base and selling a consistent, wide-ranging assortment of fresh and healthy foods would be a much better fit for Alma Village and the entire City of Palo Alto.  Once all the 37 Alma Village residences are built and inhabited (only about 25% are occupied now), a local grocery will have a built-in base of loyal customers.

While the development's layout and limited parking will probably always be somewhat of a challenge for any market, in the opinion of the petitioners these issues will be exaccerbated by a destination-style chain such as Grocery Outlet.

Read more on Miki's closing and see the comments at the end of the article on parking/congestion.

CONCLUSION

For all of these reasons, the petitioners feel a Grocery Outlet or similar Destination Retail at Alma Village could compromise the "public health, safety and welfare" of the community, and we respectfully ask all Palo Alto residents to sign this petition and send a unified message to the City Council to urge McNellis Partners not to lease to Grocery Outlet or other Destination Retail until the above key questions are answered.

Your comments on the petition are also very much appreciated.

Thank you for considering our petition.

 

**The statements in this petition are solely the opinions of the petitioners**

**The petitioners have no relationship or affinity with any local retail establishment"



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