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FROM:
DATE:
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City of Palo Alto
City Managerts Report
HONORABLE CITY COUNCIL
Jaolllll")' 19, 1995
Midtown Market Analysis
DEPARTMENT: City Manager
CMR: 120:95
This is -an infonnational report and 00 Council actioo is required. The accompanying draft
Midtown Market Analysis report, prepared by Keyser Marston Associates Inc.(KMA), is
being fon.-arded \0 the City Council in cot'Junction with its release \0 the Midwwa
community~
A City Council study session will be scheduled &foer t!-.e merchants, property owoors and
residents of Midtown have revie",ed the draft repocl and prov;ded their inpul. The City
Council will be notified in advance of an future meetings.
The policy implications and fiscal impacts, where identiF",ble, will be evaluated in
conjunction with a future repocl 10 the City Council on the Mid!own Market A."I8!ysis.
EXECUTIVE SUMMARy
lo July 1994, the City Council approved • <:onsultanl <:antract with Keyser Marston
Associates, Inc_ for the Midtown Marke! Analysis 10 provide the City assistance in resolving
!be serious eronomic issues racing the M'xttOWD Shopping Center. As part of the analysis,
the consultant mel ,.ith property owners and merchants iii the shopping district and
conducted three surveys: •• hoppers/residents questionnaire, and separate surveys for both
owners and merchants. All these surveys arc induded in the appe.ootJ< of the market
analysis.
CMR: 128"0 .... 1.15
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'The «mult .. ,!!', assessm...n! of txisting COndiOOIU is ,ummarized IS fuIIows:
•
•
•
•
•
The P"'"celizalion in MidtOIliD. coupled with multiple olliners and their individuol
ob~tives and i!l!cleslS. has =ulted in disjointed actions and has created & lack of
OIl ow:rall plan for Mi<!tOWlL
The diversity of Ollo'oer And tenant interests c""tributes 10 the economi<: slAgnaOOn of
the Midlo ... ,. area.
The physical condilion of the area, with • lock d updated parking lots and
landscaping. and the impact of • major four lane street. Middlefield. throogh the
middle of the shopping <f!Slrict. contnbute 10 the underperfo;mance of the shopping
district.
The age of rnl!l1Y of the structures causes :hem 10 suffer from boIh physical and
fur.ctionaJ obsolesrence. relative 10 modero retail and office mndards. which requireo
subsWttial reinvestment Ia bring them up 10 m<xlera c<>fIlIDercial standards and =111
code requiremenls.
C;ry par'.ring reg..lalions pf'Ohibit more intensive reuse of existing struclures and have
bee" ciled by O\llnen .. the map rea>On for existing vacancies and lack of !leW
tenant interest.
Following a", the consulla!\t', observa~ 00 tile Marter Portntial of the M;.JtoWll; T.ue
Area:
•
•
•
•
For the Midtown Shopping Center 10 capture the unrealized sales potential of the
area, upgr.ding portions of ~><Itow. 10 m<xlern rewling slalldards in teI1tlS of
bui:ding improvemenlS and parking will be required. .
. Demand is projected 10 be foe rewlen tlla! primarily olfeI merchandise typically
lOund in neighborhood shopping centers. such as f9o<l related 1enan13. restaurants.
drug sl"'oS. and the like.
There is market support for & specialty food store or for Safe .... ay IV .<pand. The
existing Safewsy facility is D ndersized and doe. no( adequately serve the market.
There is sales support for an additional drug store and specialty merchandise and for
restaurants in gene ... !.
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In the con,ullI"'" judgrne!'t, Ihe ~y area foe the first efforts of major revitaJizaIiOo is the
area comprising the norcheasI corner of MidtOWD. XMA examined alternative
iniflemelll&lioo strategies. ranging (rom recon.,1Nctioo of the e><isting improvements 10
reroru:tru<:6oo with e~r.tiaUy new improvements.
I. Rccon:rtOlClipq of Exjstjnr (mprovc;mcnts
Fer ~tion of the existing improvements to be effective. the consulta," recommends
at minimum tIlat Itoere be program. 10 :
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•
•
•
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Upgrade the physical appearance of the parking lot &.'1(/ the landscaping.
n.. City should also revise its policy relative 10 parking. since such pol';"")' can hinder
the abilily of properly owners 10 re-lease fueir buiJdings. The recommendation is 10
waive the parking restrictioo on l case by case basis. provided tIIa! the propel1y
owner sul>stantiaUy reinvests i. the properly and there is I firm commitment.by a key
tenant til.! will SlrengtheR lOe retan vilalily of the neigh!J9rbood center.
The City should ",-"xa.rune the vehicular and pedestrian circulation with ~a 10
issues rel.1ed 10 .. rery· and the abilily of pedestrians 10 cross M"t<kIkf.eld_
Cootinue with the business impcovemeDI programs of the Merchants AssocialiotL
Use the survey results 10 bene, se<ve the needs of the residents.
Under CUJ'J'ent condicioos, tile major vacancies probably will be released to such tenants as
• drug store. conunercial offices, consignment and secondhand .laces, antique shops, and
oIher low inleDsily rommercial uses.
However. the roosultant does DO( believe that the reconstruction or tbe existing
improvements and the above actions aIoIIe will malt!riaDy reverse !be economil:
problems 0( tbe area over the long term and create tbe dynamic oeigbbocbood that the
residential rommunity desires. The reason is essentiaDy thai the bistoric: development
pat'.em and the rragmented intere5!S of the m ultipleproper1y owners of MidtOWJl are
hindrances to a coordinated upgrading in the Ceoler_
I'a&'] ol5
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D. Reconstructiog with J;ncotiRl)), New Improvements
I. !he COI1>-u!tanr's view, long-term revilBllzalioo of ~ldtoWII will occur OIlIy with
re<:ODSttuc&>n. F"ul(fmgs relative to redevel<Jp<nent a.-e .. foOo-..vs:
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•
•
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U.., of !he traditional 'foe profit' developer role 10 redevelop the noriheast corner. of
M"Jdtow D is no( viable.
Property owner> coold l:Ot1Sider retAining a fee de~.loper. witn the inleol dlat !be
existing owners essentially rew. ownership of !he Center.
AltematiV"'..I.y. the property owners could worl< will> An anchor tenant 10 accomplish
recoostruc6on. A major \enant acting aJ developer Jl'JrJmizes the need 10 .. lisfy a
developer profit requirement.
Additionally, reconstruCtion efforts will require a joint p"bIic private partnership.
Unless there i< a pAItnel>hip amongst the City, property owners and ;he community
as a ,..bote, redevelopment will DO! work for boIII political and economic reasons.
1be consulWl! recommends dial !he C;ty take an active role in the revilBllzatioo of !he
M"KfIOWI1 Shopping Cenler area 10 include:
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•
There is • need for the C;ty staff 10 .. sist in the entitlement process involved with 1I:lJ)'
reconstruction, including <lefinitior. of the O'<.rlIl\ projecL
1be City will need 10 consider revising its parlrlng regulations, counting 1bc Cily
"",-ned parking &rea as part of its ow.rall puking requirements, ..,."'1<1 po •• ibly
relocating lIle existing public parldr.g lot.
In addition 10 entidemenrs and pulci ng, the consultant rerommends lbal the City
consider ConnatiDn of a redevelopment agency for the following reasons;
• Unless the property owners, as I group, are committed 10 create. revitalized
area, their diverse interests could defea; sny el'f<x1lO revital,ze the area in the
C()()fdinated manner needed '" create I dynamic and vWrar.l neighborhood
center.
• R"'--ievelopmenr agellC) formation allows Owoers 10 sen and reinvest proceeds
of sale w< free, provided that the reinvestment OC""rS within ~ stated lime
• CMR: l*:!IS l'qe • of 5
frame. thereby providin, an i~.ti ve ((!{ th<l$C who ",anI to seD bul <:aruIOt
due \0 hi,lI ta ••••
fISC';}' IMPAct
NO) fiscal impact is eumincd II lhh stage. The fiscal impact will IIltimalely be cIe!M!liN:d.
by die· role lhal.tIIe City C<>uncil wants tbe Cily \0 play ill improving condjlioos ill the .
~ Sbq>ping C.enter.
El'WIR.ONMENTAJ, AS$'iSMENT
None.
AlTACHMENTS
PREPARED BY: Carollanses. Manager. Economic Resources Planning
CITY MANAGER APPl<OVAL: ~
M:S1"ROJNY
Assistant Cit, Manager
cc: Mi<ltown Market A"anlysis Consultant SeJectioll Ccmittee
Faa'SolS
MAAAET AIW. YSIS
MIDTOWN S>IOI'I'WG CcHTeR
PALO ALTO. CAUFORNIA
Cn'v« PAlO ALTO
KEYSER MARSTOl\! ASSOCIATES. INC •
. JAMJARY 1995
Markee ADalysis
Midt .... SbopplDz Cmter
Pula Alto, Ca610mla
I'rtpcrt4 for.
City of l'aIo Alt.
January 1m
KEYSER MARSTON ASSOClA TES, INC.
Golde.a Gatew., CommODS
55 PaciIk A .euue MaD
Sa8 Francisco, eanComia "'Ill
SOO Sooth G ... nd AveDue, Suite 1400
lAs An,eles, CaUComia 90071
IlS5S Will" Bluff Drive, Suite 160
San Die,., c.rlforuia 92130
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TAW OF CONTeNTS _______ --' _______ _
rntroductioo
A.
8.
C.
Assignment
R<port Organiution
Cav<als and Limitations
1. Sumcwy of FLodings and Con<:lusions
A..
B.
C.
D.
E.
~sting Coodition.
Surveys
Deroograpb.ics
Marl<et Potential
Imp!err.entaticn .
m. Sun<.ys
.A
II.
Residential Survey
Property Owners and Tenants
N. Markel Po:eniial
v.
A
,B.
C.
.D.
A
B.
C.
D.
Midlow!> Residential Trade ATea
Population and Denwgr.phi<: Trends
Expendi~"", Potential and Squve FooGljle Supported
Scmmary
Charlestoo Center
.",Irna Plaza
Edgewood Shopping Cen'.,.
Midtown Shopping Center
Vl. Rent Structure and Property yalues
A
B.
Reot Levels
Property Values
I
1
2
4 ,
5
6
~ a
14
17
11
11
19
19
19
24
26
21
21
29
30
31
34
34
35
A.
B.
lteconmuctioo of ExislinS Iml"C"emen:>
Reconmuctioo with Essentially NewlmprovemenlS
Appond"Ul A -Midlowo Shoppers Survey
Appondix B -Midtown Owners and Merclwlts Survey •
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39
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INTRODUCYION
This repo<I $U"'marlze< Keyser Marston AssociaIes, Inc.'o (leMA) in~g.tioa into tho
feasibility of !he I<mg ~ .ability of .. '>e Midt""'. Shopping C~"ter and 10 id~tify
aIlmnative ~ies 10 revilaliu MidtOWll as an active and ",ta! neighborhood center.
The ley questions addressed in Ibis analysis are tile market opportunity and L'>e abiliJy
10 implement. o=sful revitalization strategy for tho Miello",. Shopping Center.
To assist lhis effort, an .. "",sive survey of the Mid_lI. resHlents was «JOOuc1e<l.
Additionally, survoys """re distributed 10 tho propert)l owners and !be tenants and
medings were !>eld wilb bo!b groups,
B. lIqorr OrgQnl:Mion
This report is organize<! as follows:
• 11ll1VJ4ucrjo~ -wbich i> Ibis section, describes '!be assignment, !he
OtJanizalion of Ibis report. and !he IimltinS conditions of thi. analysis,
• ~ J -whiclJ sum marizes our flndIngs and conclusions.
• Secrion 1lI -whick summarizes tho resi<lential swvey. (.1>Jso see
Appendix A.) In addition, JCMA under!ocl< • su."vey of !he property
owners and the "",,ants {Appendi. B}. These survejS are confidential and
il summa.,} is presented.
• Section TV -whiclo describfs tho Jt:a."ket ",eo served and pro>ides an
estimate of 11-.0 ret.n expenditure potential avaIlable 10 M"ldtOWII and the
square footage supjX><fed.
• Section. y ~ w!llch presents II comparative ailaIysis of retail sales and rental
rates wit. ether Pal<> Alto neighborhood ,boppir.g centeno
• ~Clion VI • whlch dis,c\J s.ses curren trent struc[ure and property values.
• 5eL."riO" HI -wbicll addresses alternative impkmentation strategie~
,n ':J.IOOOt.OO1 ,.... 1
• ~ primary purpose of Ihls .:l3lylis is 10 advise L'>e CiIj ol Palo Alto of
ow. m&1tet opportuni~s a."d 10 identify alternative stra~ foe the
revitafuation ol the Midtown Shopping c.:n:er. Tne finding. are DOl
meanl 10 be • repr=ntatioc Of ,..!!at will actually occur; the
implementa"oo plan ultimately pursued may Gurer from the ronclusioos
olllli. marl<a analylis b many mlSOns sucb as:
o ~ fimfmgs are baso<l OIl economic ratlle. Ihan poIitkol
consideration.. Therefore, they sIl""ld neitl!er be construed as •
~resentatioo or opinion tlat any necessary ,,,,,ommen! aJlPrO"3ls
can be secured. Further, Illis report is DOl intended 10 represent
III. policy objectives of the City of Palo !Jlo.
o Markel feasibility i. DOl equivalent 10 Lenant inte.rest 0< firumciaI
feasibility; apart from ",bethe, Iller. " I demand foe ,~u. retiiI
produCtS; O!ller 13<:1On are of crxW importance in deIenninlng
feasibility. Crucial 13<:"'" include: economic and financial
feasibility of eac. individual property .,. .. ner, funding sou'"",
req~iJemenlS, romm'JrUty goals and political consideratioos,
parking ~ existin,g improvements and parcelizatioo. and
property values.
• The analysis """UIneS t1u;t & .. local and oalional economy will conti""" 10
recover from the recent recessiQll !hrougb 1995 and into 1996. Howe-;er,
upoo recGVery~ t1'.e ecooom) is expected \0 grow only modet'4\te!y; neitlleI
L'>e r<>buS! condilions of Ille 1980's nor the recessionary conditions ol the
early ) 990' ....... n be observed. If a.~ unforeseen dange OCCUlS in the
economy Of the rirning, of the .economic PeCCvery is diF.erent than assumed
herein. these conch:sions may 00 longer be valid.
• The ana1)'sis. opi:nions. recommen.datior.s and conclusions of this report
aTe cur infonned judgment b.2..iCd 00 market and economic conditions as
of tile date of lIIe repoll. Due '" Ille volatility of market cooditions and
complel dynamics influenc~ng me etOflOmiC siruatiOf'-s a.."1d conditioi1s of
the building a.-d development industry. conclusions and recommended
actions cootained within Ihls report sboold DOl be roned DpoD as sole input
for final bu'siness decisions regarding current and future reVitanzaOOn
strategies .
• 7173100Q1 ,01)7 '11\1_'
• The i.,_ 0( Illi' report is not 10 prepare a specilic development pWl.
includinJ pamn, and landscap;n, pIa.'lS, for Midtown. llubjec! 10
di=ion Ihat !be City, rommunity groups. property owners, and Lonar.ts
wish fc J"H'II", !be .ext step ,.oold be 10 prepare • specilic c!evelopmeDl
prosram for Mid", .....
• The analysis contained in Ihi, report is based, in part, oa data from
seoondary "",,<es suc~ as !be U.S. Censu. and tile City of Palo AlIo.
MDe ..... betievt lIlat Ihese sou"",. ire sufficiently >IX1lrate \0 be useful
for planning purposes, .... can"'" guarantee their accura<:y.
• This report is limited 10 the viability of commeR;ial use> in M"!dI<Jwu.
A.lthough residentiaJ uses .. incTuOlng mixed use development cooceptsl
have 1>=. ,uggfSted, analysi, 0( residential and mixed """ ronoepIS is
beyond !he scope of work of fr.is .ffort.
• II is ,"""rally =ognized tllat many of !be existing structures are in need
of subSla~tiaI reinvestmenL For the pmpose of Ihls report, general
information was obtained tltrougb a:",,",sion, from property owners and
• cost estimator. However. there lIave bees 00 specific analysis a,'aiW>t.
'" XMA on !he statu. of individual structures. A detailed stUdy of each
bUIlding would be necdSa1)" 10 obtain sueR dala.
• This report contains preliminary estimates 0( the co!l<ctive property values
for tlle area romprising tlle norti".east quadrant of Middlef.eld and
CoJorado. The intent of this prerlIilinary value estimate is k> create a
framework in 'iL'rucb 10 discllss alternative implementation strategies... An.
appnisal of eae~ iru!l...;oual property "liS oot underlalcell, nor should the
preTimiTW)' \'alue estimate be considered .our opirUon or "Value for eacH
ir.dividual pToperty.
• It has bees assumed tr.al tile properties are 00( impa<:1ed by tile preseru:e
-of an)' sotIs,. toxic .. or Jlazardous conditions U'Ia1 need to be remediated and
therefore would impact tlle revitalization strategy foe Midtown..
t 1113<1.0001 ,007 I"Ige ,
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I. SUMMARY OF FINDlNGS ANO CONCLUsIONS _____ _
The objective of lhis analysis is 10 asseu \he long Ienn vabilky of tl-~ Micllowu
$hopping Center and 10 ide.,tify alternative strateg"" Ie create I vital retaJl center that
serves !!Ie needs' 0( neighborl>ood resid .. ,ts.
, The following summarizes our fUl(rmgs ."" ron;:lusiOrlS;
It is ge<>erally ~ that tl1e elisting conditions within !he Midtowu Shopping
CeR:er are not p~ng in • po<ilive .r"""Uoo "'" that -=live action. must be
1akeR. Thi, view MS s.'>at<d by residents. teM.1t' and property """""'-
The following summarizes our usessmeM 0( tM .~;";ng COOOitioos, 'IIhlcll is lmpacled
1>1 the folIcwing fac!DrS:
• The parcefIZalinc "'" 111. multiple owner> .Iith their individual objectives
and interests have result<d in disjointed actions and created • lack 0( an
overal1 plan for Mldrown.
. ., The diversity of interests contributes k> Ihe economic mpation of Ihe
....... for eXll.'TIi>le, in the area comprising Ihe northeast quadrant 0(
Middler"M ''''! eor<ndo, there are elev"" g!OOps c( PfOI>\'TIy owners;
excluding the City parking lot. Willli.:!tis area, there are subsbntial
"""",,cies with the Midt"",. Market, Bergmann's, and Wells farg<> Bank
representing approlimJIteJy 30,000 ",.ft. or about 40" c( the space.
Collecti very, Illese vacant properti .. have. negotive impact on MidtoWn
as a wbole and bave reductd Ihe pedestrian tJaffi<:.that many of Ihe loca1
serving retaile", require for ri<ibJe businesse ..
• Recent da[a indicate that rents nave decTlJ'\ed, In selec..llve cases, it is not
tmrea'JOl1abie to expect mat rents will decline further. L"l our judgment,. if
MidlOWIIl ~ not revitalized.
• The physical condition of the are>. with a lack of updated patkiog IoU,
Iand=plng, ar.d the imj>acl of • major four Jane street, MJddJeficld,
through the middle of the shopping district· contribute to Ihe
unceIP"riOrmance 0( Ille shopping district.
11173\OOO1.GC7 P~'
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• The age of many of Ille SUtlCtum .:au ... lilem 10 IUffer from bOIh
p.~ysical and'functior.al obsolescerY.'e. relative 10 modem retail and office
S!a1l<IaI1l', which require! !lUbsta..tial reinvostmeo! ,., bring tltem up 10
r.ioden commercial standa.-ds and c=t ctlde requirements. o..ners
have either been reluctant to reinvest foe I Dumber or rea:soos or 60 not
bave IiIe fi.'I3I1Cial moIlrces 10 do 10.
• ell}' parkir., ;:ocf .. are rwrictive in IiIe ab!li!)' 10 reuse certain properties
and have been cite<! by owners os • =son for exis!ing vaca.'lcies and lack
01 tenant in-.
Signs of ecooomic vi1ality also exi<l iii Midi"""'. as evidenced by:
• Str<lIlg tenM1l dema.'ld .",1 hig. rents are bcing IC~Jeved for prerrJum.
comer Ioco!ions,
• Several Ie_IS are experiencing WOOg rroarket Sl.'J'POr1. IUd 2S IiIe local
b8ery. ,ide'<> stofC, beauty salon, bard.,."", store. Co-op. saC..,..y and
financial irtsnrunoos.
• Sales volumeS are very high for seJective tenants, sucll as Safe..,..].
B. S"",,:fS
A survey c( IiIe Midtown residents was distribute<! by the city staff. ite!lpO.'" from
<We>' 660 residents were received, III generu. Ille ",rver results ~ed:
• MkltoWD residents generuty believe "'at' til.,.. is a need 10 ~pgrade
M'.cto",. Shoppi"g Center. a1thoogh tJ>e ""lions needed range !rom'
upgrading !he physical .ppe.a.~ 10 Ille introduction of a roe .... r.ix c(
tenants.
• Miel!o",. residents indicated • strong desire for IccaI serving reIaIl
businesses. suck as restaurants. specially foods, and specially ~s, !hal
serve local Deighbomood needs.
• Residents support beth Lie C<J-<>p 2nd Safew.) and the .<"""sian of
Safewa)' would nO( cau~ a s.igniflCaJlt sh.ift from s..~Ing at Co-<!P 10
Safeway. However, we interpret the residential survey as inolC3ting that.
if there is redevelopment, an .'ponded S.feway mu" also allow the ability
to bave sma11 shop space «..,d cot simpl"y one larger supermarket.
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SutVe)'1 from and meeting • .oith the property "",ner, and tenants indi<:21ed that while'.
number of aictchanlS are very bappy with beL", Iocaled within Midtown, !heR an i>sucs
of eoocetB. iIlcludInl:
• The need for new one1\o< tenants 10 dr.w customers .,..11 ~..,., the \o5s
, of 1!eri1TlL'lD'., MidtOWD Market. and the two majo< banks, whic:h bas
rrsulted in Rdu=! pe.Xstrian traffic.
• MidIo ..... suff." from • lact of long lerm planning but DOl n=sarily
ecooomlc <Seefine. Economic <Seefine In ~l<Ito .... is • mati •• Ie!m sin<:e
sev=raI businesses continue 10 do very ",,-en ""hile other major properties
are ullderutiliud or vacant.
• City parkin, codes prooibit the ability 10 ro:c.:ivc .... permils roc <:ertallI
properties and types of lenanls and, consequendy, <an be an _ ecooomk
fulbilil} 10 existing pros>erty owners and mer<:1lant!.
• PlIysiCldiy upgrading of oidewalkl and improv."","", and signage in the
area and Improved signage are needed. TIlere is i feeling thai Mklto .. ",
bas _ neglec1ed by 1/'.0 City.
C. Demognzl'hicr
• The tnde area served by the Midtown Sho!>\>in( Confer is mostly the
residential area bounded by within approximately 1 mile. AdditionaDy,
!here is markel suppon roc certain Ie'nants, suo. as the Co-op, rut draw
.uppon from beyoud the immediate trade area.
• Dert>ographics are ;;try .. .rong In L'le Mi<ltowo marlet area, .oiL\ •
population of 34,220 and an average bousel1old income of S78,S40.
• Older bousdlold. occupied by seniors are being replace<l with younger
boose!lOlds wiL\ childree and high incomes, whlcb ,.,.:n increase the
dema.-1d fo< neigl1bOOxiod serving mercbants.
D. Matitl Polell1itd
• Demand i. prcjecled 10 be !Or retaile" tha! prirrutruy offer mercbandise
typically roond in neighborhood .. ~opping cenl.". such as, food relaled
ICnants~ .resraurants~ <!rug stores. g!fi and -card shOfS. "'ideo and t)oQk:
",0":', liard"..,.., cleaners, and the like. Typically, apparel is not •
common $enant in sucll centers becalise of the strength 0( rr.:aJor olpparel
stores. located efsewhere.
11'l7~OOO1 007 ......
• There is ,narU! support for a specialty lOOd ston ot foc Weway 10
expand. The existina W""")· focilit)l is unGersiled at 17.soo sq.ft. ..,d
docs DO! adequately serve the mar1<eL An .. pan~ and substantially
remQ<leiled I..ocky'" store at the Alma Shopping Cell,.,. would bave a
negative impact O<l the older Weway. N .... er Safeway stores are in the
t3l1ge ~ 40,000 sq.ft. \0 60,000 "I.ft. .... DOItd in the nosidential survey,
if th.", is redevelopment. an expanded Weway must aho allow the ability
10 have small sbop space ..,d not simply one larger supermarl<eL
• There is sales suppo!t for additional drug store and syecialty merchandise
and for ~uru>'.s. With an upgraded MidtoWn Shoppi"g Center. the
adcfitiooal sales support ca., translate into hiiber sales for existing
lllel';bafit3 and the additio<! 0( Dew merchants.
• F« M"Hlto,.,. S;~.n, c<n;e,-\0 capture tne unrealized potential will
require upgrading por'.\ons 0( Midtown \0 modem relal1ing 5laJl<lard$ in
terms ~ building improvements and parking. Strong market :>ppOrtUllilies
do DO( Dec>:sSlrily trnnslate into increased sales for eidsting kll,nt:l 0; for
financial feasibility of. ce·;" retailers in Mioton. 10 p ... ·ticular, existing
older commercial building. tl1at are cither \-acant or ur.deru~1;:red ore
unattractive to mercllants seeking modeill commer~..aI space standards .b
• Dumber of. reasons, includ"mg:
o
o
17173'\0001 ,001
J'tyslc:tl age and obsolescence in the larger commen:iaJ buMlJ1g5
are """stralnts CIo.<U do not lend these builer"'g' easily \0 the mise
by lenants. Rein\·"estment and tenant improvements are required ..
",bie. can CO<! as much as $50 per sq.lt. 0( building area 0< moo:
when retal1ers require I: major retrofit, depending on the cooditioo
0( the improvements",
Desire 0( the property owoers 10 h .... the tenant furod maJor capital
impflWements. either 1hroo8\ • reduction in rent or direct capital
iovestment by the tenant;, and
Cit)' codes relakrd 10 parking can ~use existing tenant spaces to be
unattract1 ve in selectj-.(e properties.
1"'"'11-,
"
The DOrIh<asI comeF« Midtown, in our judgment, is the key area for the tint efforts « major m-irafualion. Private rcio'veS1ment ill the bal""", « Midt01W will follow the
~ revitaIiz200ll «this area. ..... part «thii analysis. KMA eumln<d allet"r.anve
implementatioa strategieS for !l' ... nonn.3st corner ranging from teCOOstTuctioa « the
wiling impro_" 10 reronsuuctiOll Il'i:ll .... ncarry new improvements.
As • minimum program for !he revitalizatloo « MidIo., .. KMA recom mends:
• Upgra<!e the pb)'sical appearance of parking Jot .. and landscaping.
• The City should revise its pcEcy relauve 10 parking, since suc~ policy can
hin<!er the obility « property " .. 'nen 10 re-lease their bUl1ding •.. The
recommend8.tion is 10 waive the parking restriction oa ~ case by case basis
p"",ided !bat tile propcrt)' owner SliW.antially reinvests in the proper!)'
. and there;" a fmn commitment b~ • key tenant tllat will strellgtl\ea the
retail .itality «lilt MIgl1bo<bood center_
• The Cily sh<>u!d re-e.amine the .. hie"lar and pedestrian circulatico Il'ith
r<SpeCt 10 the issues related 10 wely and the ability «pcdestrianJ 10 <TOSS
,Mtddlefield. Spe.."if=Ily, we suggest that the Ci!) considu narro .. ing .
Middlefield 10 two lane., if leCImicaIly feasible. in order 10 ana... !he
<>vetali area 10 be integr.ucil as • sing~ entity rather than roor individ~
corners. Additionany, the IIJIlTOwmg of Middlefield lias pIlysical
ti<!.al'.tage5 by anawi"g "ider sidewalks and/or provision of more parking.
• Coounuc Il'iL~ tile programs of tTl. Merchants Associatioa.
• Use !he survey results 10 belter serve tile needs of tile resident<.
Under CtLrrent COflditions .. the major vacancies probably will be released SO sucJJ tenants
as I. drug store~ .commercial oi'fices • .consignment and second hand SIOres~ antiq~s shops.
and other low intenslTy commercial uses..
However, ",ilh Ql'pro"imaltly 3(),(JOO 5tJ.ft. """alii f~ me a,.,a comprising ,,'Ie nmtl/ea>l
comer of Middlefield and Colorodo and ""'"Y of lhe buildings i. neelf of rein"urmenl
invol1ii.""J.g substantial doOars (assuming releasing the spaces 10 retairer:s thai will have.
4ynamic l.""poa olllht shopping tfisrria)~ we do Tiot beli~ .hat i;'.e recor!Structio71. of the
existing fmprovemerus an4l11e COOVf (lClions aro1lC 'Win marenarJy nvem me ~C()'W111ic
~7'173\OOO',OO7 ......
-f . "
f
-',. ."' .... -,-' ~
p~ru.u of h ere" o ... ~ "'~ long 1m" and crtat. eN 4yllllmlc t0glJMrhMd cenl<r ~
eN residtlltial commJUliry «siftS. .
Our """"" is essentially lila! t!'.e ltis:oric d<:velopmenl pattern> and lilt f"'8""",:ed
iIl~ of !he multiple property owners of Midtown = hindl'O.nCU to • coor.f1J\ated
upgI."ing in !he n<>rt/lea.sI romer. wmples of Ihe COIllOCting interests ",.t cause it 10
be difficult foe !he property owners 10 wor\ ill concert include:
• Without I f.nn commitment by • group of property O\J/IICrs 10 reinvest
substantial dollars 10 modernize !heir properties, OWIlen 1ft. relUC!3n! to
proceed individwol1y. This problem is euceroa:ed by !he r.ct that ",me
ownerS do not appear to have the financial rcSOlJ rces.
.. The ability 10 ai.tr&."1 new inve$trnCnt donars 'from deve\open. for
example, is very cf1fficult d:le I<Y.
Q Propert) owners· perceptkm of ... alues cause'S new investmenl1c be
marginally f".sible. However. ""'ner5 need to recognize !hat
reinvestment is neCded in order to maintain value evea if rents ao
00( increase by • corresponding amount. Ren" may decline
further if there is 00f: I revitaf1zation of the. area.
o Ability 10 collectivel] recoostruct _oral :>roperties is \/t:f)"
difficult. In severa! cases, owners have Slated • de>ire DO( 10 sell,
for reasons suc~ as: higb tv. fiability. inabilitY 10 reinvest m<l!lies
v.'ith • oompam!e retun=~ oc simply !he desire SO retain long kmn
owDCrsn.ip.
In our iudgmer.l, long rerm n:vitanutioo of Ole oonl!east area will only =ur with
reconstructioo. For the balance of }.(Mlto",., reinVOSIment in Ihe existing improvements
.bould be sufficient, >JtIloug" Iimi!ed Ie<:onstruCtion could occur.
With respect to implementation. foe I<aSOOS tltat "ill be eKpI..ained subs<quently, it is our
judgment:
• Traditional c!evelopeT role in Ihe recoo>lnJctioo of !he northeast quad"",[
of M"ldtCtVw'Q is not viabie.
• Property owners should con sider ret4ining I fee developer. ,..ith the intent
Olat the owners euentiaTIy retain ownersbip.
1717a;ooo1,(101-,. .... e-I
T.,--,", -::;:' .
>: ~',,~
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• Ahemanvely, ~ property OWIletS eouhl "oct ,.,jlll ... ancbc< tenant. In
this case, the recoostn>Ction 0( !he area from CQ-Oj> 10 wen. Fargo
probably would be necessary,
• Additiooally. \hi. effort .. 'iU require • joint public private pmnersrup.
A. Recoaslrudion .,iIlI Traditional Dev.1oper
Traditiollal private developers, in our judgment. "",uld no! be inleIeSted in undertaking
!be cfforU 10 as.",mble the properties and reconstruct Ille nor1lleast area. The reasotIS
.inClude:
• The time, effort, and asscciated cos!s fo< • deyeloper represent loa higlt
a risk giveo tile unpredictability of the outcome. A c!evelop<r must ltav.
a 1ligb level 0( ceruointy \hal tile ccmm"nilJ groups and !he C~ COOncil
win support Il',e proposed development (lllCludi,.g mix and types 0(
tenants). .
• The developmen[ economics ~c Cot feasible for reconstruction 10 support
estimated property values and a requirement 10 produre a developer profit.
Preliminary atima,., of property values average approximately $50 per
sq. It. when o,e value cf tand and impnwemenu are converted into I land
value. {If the Ci ty were 10 alIo-.' tile oldsting pubrl< parki." 10 be U>Cd 10
meet Ill. parlting requirements at no """ !he average east would be Iess.)
Our estimate Ihal supportable rents ~ recorutructiOll are estimated b .
be in the range 0( SUS per oq.fL per moo!!! (NNN) with premiums for
the ~ location; bot the existing property values and the requirement
'" produce. developer proot require aver.go rents 0( $2.50+. whk~ are
oot'supportabie. The cOSlIo :wembte !he site would need 10 be in tile
range of 525 per sq.ft., or approximately half tile estill'.aled property
",aIues. It seems unlike!y that a joint venture with property owners would
O\Ierroa-ne thi 5 issue.
,Jt..... R.econslrudion witk • Fee Developer
The concept of a Jet! developer is 10 introduce t1:Ie needed expertise: 10 reconslruCt. SiilCe
tile developer is paid on a fee basis, Ille tr.iditiOflal predevelopment risks that .,..
unacceplable 10 • tradition31 d"".loper are minimized. EssentialJy Ille existing o~
Q)ntinuc k) retaIn owc.ershIp and thus fJie Ls..'\ue of current property values ml&bl be easlef
to deal with. and the need for lhe project ~ generate a developer profiol is .minimized.
In 73\0001.1101
....
." .. "
.~ -.
C. RecO!lSlnlCtlon YiItlo in Anchor T.""DI
Another allernative for the DOrtheast area is for • major lenanl '" 001 as the d .... Iopcr.
The anchcc "nan! .... ntially assum..-s the role of Ill. developer aM provides the
expertise. Abo III. ability 10 pnMde financing for the recoo,tructio<> is • major benefit.
A major Ie!'.ant .. developet minimi .. , the need 10 satisfy. developer I'rofil requimnenL
In the oa>O Cf Midtown, the logk:ol candidate is Safeway. AJ Slated in the introductioo.
no __ bas beel! mOlk by KMA with S.f~y. If !hey w= blereste4; "'" .. ou!d
~ • concep!"Ja1 program be develcped co !lie 1lOf'1least cornu of Mick!!efie!d
IZld CoJorado.. sucll ... tile foIklwi11g, to be tested in detail:
• A minimum amount of Small s1lop space, Cf say, 30,000 sq.ft.;
• Existing MidtoWQ 1enapJ.s would ha;re a preferential opporn.lnit)' to re~fease
space;
.. Sufticienl square footage for" the anchor ttnanl 10 h2ve ell: incenn VI: to
pursue suell an o!!On; and
• Consi<!eraliOD sllould be ! tven 10 the narrowing M'1ddl.field 10 two lanes,.
thereb)' enhancing Ol. pbysic>l2l1d pedestrian envi."Oflment and reinforcing
the entire Midtowu area as Or'"H! cobesive neigbbornood center.
With reinv~menl and successful reviaIizatioo of the northeast ~ private. invcttment
f<?r the balance of M'lduw. .. shoIJld folio,.. _ .If We .... y should vacate the improvements
currenUy occ,opiod, we would e .. pect Olat ihe building would be Cf interest '" other food
stores. Subdivisioo 0( tile store for • limited number of Iela:lers may be possible, but
would need 10 be studie<! 10 determine jf sud. a suooMsion is practical and feasible.
Considemion should also be gi ..... 10 the demolition ofllle $lore and the reconstruction
of new reIliil sJ'OC".
P. Publk Privale Partnership
/tJ. Ibis t1rue~ we reromment1 that the Clly continue '10 take an active role in !be
revitalizatkm. bcluding:
• There is a ceed foe the City staff \0 iS$lst in the entitlement pr<:JCeS)
iovo;ved ... i!h any reconstruction. including definition of t1le overa.R
project.
Peg. 11
..
• The City will need to co.,sider revising the parking requirements, counting
Ibe publlc parlcir.g area as part of the overall parking requirements and
p"ssibly reJocating the p'JbrlC parldng.
• bs oJaltion 10 U'JiJfc",,,lIlS aM p<lrfcing, "'" wouI4 recommend JlJa; t"" Oly
~onsid" W ~ of II re4tvtl~1IJ agtnq. The reasoos include:
o The formation of • redevelopment area is essentWIy a formal
stUement !hat tile colIecti ve L~t<>l tion of all parties is to revitalize
Midluvm and it creates an OI1anizati<>naJ stnICtu~ in ...rue, it can
O<>."Ul.
o Un!ess tfJe property owners .. as I grouP. are commiued 10 CIQtc
i revitaftz.ed L'"'e2. there is the con~ that their div~ interests
WO'"ld <!efeat any effort 10 ",Yital""" tile area in a COO<d"llWCd
e.'fon needed to create • dynalllic and vibrant neighborliood =teI'.
Rfdevelopment provKles:
• The ability 10 assemble key parcels !hat = n<Cded to
<:reate • Yioble project using Ill. PO"'''' of eminent <!amain.
The ngbts of •• isting property owners lIe prolec1ed by
redevelopment law; and
• Tax incentives by ~wing existing 0VrfIlen. to sen 8nd
re'nv""-tl-.e proceeds of sal. tall free'provided LUI !be
reinvestment occurs wiihia the Slated time frame .. tbe:reby
prmiding _ an incentive for lOOse wbet want 10 sen but
atnnO( due 10 higb taxes or -other reasons.
• Redeveloprr.enl process requires Ill>! the process be open 10 all inteiested
parties. Unless there is • partnership among til. City. tile 0..". .... and the
community. redevelopment will not .... ork.
• Howcl,"er. special redevelopment financing, JmoWCi U tax increment
finatk.;ng, does nO( create SlJbstantiaJ near renn sources of public funds to
rein vest in :be project area. Typkally. cities loan seed mom.. 10
redevelopment agencies to fund costs in the initial years. Therefore ..
substantial public fund. 10 .ssemble parcels in Mldl01llll will not be
2.vallabte .. The reason is that a redevelopmenl ager.cy only receives
funding from me growth of property tax increments generated by new
iC\lestmet"!1 over an tKlended time period.
Successful pul:li<: prh .. !< partners.~ips, at • minimum, typically have the publi<: _
. providing publi<: parking. TbeR are man) .exampl .. 0( this, including Burlingame
A venue anri "" ... nIO"" Lo. AItDs. In O'J\er case., such as downlowD Los Gala., Mwpby
Avenue in Sl;nlIyv-ole, IJ\d Castro ~ in Moonllli. y,.,..,. !he pubUc secIO< is providin,
assi~bcyond porong, including landscaping, lighting. signace and facade &ranis.
This e«on is primarily bein, done by redevelopment agen..-ie.. Then: are 13 agencies
in San MaIeO Coon!)' and 8 agencia in Santa Clara Cooney providing suc~ ... isla:"", in
their ""DIm Wulin. Finally. DeW creative programs 10 revitalize older shopping ~ are
beloS considered. Foe seJected Ienal1ts lila! are felt 10 have an strnegic impact on III.
revilalizatioa 01 an ...... cities Ihrougbout CafIfornia are DOW consiclering loa.,in, funds
for il'f!ant improvements 10 facIlitate L'>e «lmmir!nenl oley k:nants. I. >ummary. Ihe
pal'.en; for ,...italizalioa typicalJJ involves an active role by !he publi<: sec\Or workiJIg
with the private seckX'.
.. .
j. _-:...r
","
D, EXISTING CONDITIONS
If is generuIy fel' th .. !lie long term visioo of Midlowo has been neglec<e<! due 10 It.e
multiple patcel. and """YinJ interests of lh. owoers, particularly !lie nort!least _ of
Jdid<iIelield and C.olooodo. "hlc~ suffers from ecooomic stagnation,.,.'~ by:
• n",,,, "'" "'bl!al1tial V1ICa."cie. wllh the MidtoWQ Markot, Bergmann's,
and w.ns Fargo Bank Iepre5ellting approximately 30,000 sq.1l vr about
4011\ of the ~ on !he norlheos! qoadranl of Middlef.cld and Colorado.
t.o.s of \!lese anctoO< le"anlS has re<!>=d the pedestrian traffic It-&! many
of the local serving retal1ers requm foe viable l>usinesses.
• Rents 'have d~Iined.
• The pbyslca1 condition of lIle area with • lack of updated parDn, lois,
w,dBcaping. and tile impact of • major four lane street. Middlefield,
thIO<Jgb tile middle of the sl10pping district coolT;b"" to the
uOOe'1"'riormance ol Ille sllopping district .. 'ld <".Ires CO<I<U6 for
pedestrian .. fely. GenerlL~y, I!-.ere is • reefmg that Midtown has been
negt..:ted by !l>e City.
. • City parking codes prohibit me ability 10 reccive .... permits for certain
propc:nies an~ ~ of tenants and. consequently, <an be an eoooomi<:
liability 10 e.isting proper!)' owners and men::hants.
Many of !l>e existing builwngs .... older and iI i> oat uncommon for properties in the
area 10 ltave been llIe .. ,,;. owners since !he original cooSIruCIion. Due 10 Ibe .ge ofl1!.
improvements, many of me buildings re<;,uire sub:.-tar.tia! reic\lestment 10 bring the
properties 10 meet IIlOderB commercial standards. including te:lanl i,mprovernents required
10 a=\ retailers. 1".,. CO<! "'" be in • .cess of 550+ per sq.ft. of building area ",beD
& retaI1er requires. compTe!<: retrofit. Obviously ",beD "'nants ore willing 10 acrept
space essentiafly -as is," the Cost of impro,'ements is muck less. The pcactice by the
property owners flas been to incur these costS only when necessary and 10 have the new
\ena.t'\ts fund Lie ~mmt improve!\",wts 'ilrihea poss.ib'te~ Which can· be done by a reduction
in rent or by the tenant investing l11err o ... :c capital.
Fo< the .. -.. comprising the northeas: quadranl of Middlef:eld and Colora<lo, ",lUck is
the subjeC'! 01 this study, a ;J:st of l1'le ptoperties, tenants, Jand size, a.,d building sizes are
presented in Table I. The do:. · •• a. provide<! by the City of Palo Aho and is believed
. 10 be teasol'1..abl)' Co.."TecL However. legal su.rveys of parceJs or engineering studies of
cadi individual property has 001 beee undertakeR. Therefore. there It.ill be OJ screpancies
1717:",co::n .007
•
in puce! and kiWi"g sizes. depending upoolh. source of Ille dara. This r~ is not
in1leMed Ie> ",concn. Ille vaij'ing repo!1S.
b..<Xl!lClll!ion. sUnI.Y resUlts from 11-.. residents. property .,wr~. and ;mants aD agree
ella! M'KI'!<>w. is in Deed of ""cn6<m if it is !<> !><come • viral .. 1d dynamic neighborboo<!
center.
,.
,71 73\DO(I1 ,007
_ ..
",-.• r •
711-19 Colorado
721 Colorado
SUIdn __
Act. Scxw.r
6iQ\..IM
PIIIdng t.o!
Lf __
MkIIown Pharmocy
JlAs-.ty
VIc:Io!Io Emmono
SMI c.n.m/cs
PIIIdn; lD!
--~ .
17,993
7,782
8,622
15,419
6.125
251,374
8,!IOO
9,092
8,756
7,130
""'< »",-":~,,,',' '"_r' ~'9.1994
5,320
1.184
12,700
(&:I. UozzanIne)
2,520
9,337
(Eld. Mezzanine)
2,715
7,555
60,248
72,310
10. SURVEYS
The JeSV.ential .!JtVey distributed II> the ncirhborOOod croups is ~""-"l\ted at the
coocIusioo of this ",,000. Over 600 responses ",ere tabutared by KMA a"d numerical
""""""'" are inserted in the .urvey. which is presented in the append"1ll.
In JWI"nary. the fin<flllgS are:
• Midtown residents generally beTiev. that iller. is • need 10 npgrade
Midtowo Shopping Center. altlloug1! the 2Ctions Deeded range from
cpgradini 1I1e pIly siC2l appearance 10 the inL-oductioo of • new mix of
tenants.
.. Midtown r.esldents irld'icated a str-ong desire for k>caJ serving retail
bllsin ...... sueh as restaurants, specialty foods, and specialty ,,'<>reS, that
SU'ie local neighbo<l100d needs. .
• Residents support both the Co-op and Safeway a."ld the e.pansic>u of
sare"",y would not cause • significant shift from sbopping at Co-op 10
Safe\lr"iY· Howeverr we in:erpret the re:s5dentiaJ survey as indicating rhat,
if1l1ere is redevelopment, an expanded Sar.way must also 1.L1ow the ability
10 l".ave sman shop space and not simply one larger supermarket.
In l confidenfial' survey ~ property owners and tenants responded 10 two .separate surveys...
The inr"'" from owner. and ",naIl ts are inro<p<>rated L'>roughout !his report. In
suril:'tlary. 1M findings are: '.
• The need for [lew anchor tenants 10 drdw customers and replace the loss
c1 BergmanD"s, MIdtown Marl:et. and the two major banls., whicli 'has
resulted in a redL'>Ced pedesuia."l traffic.
• Midtown suffers from • Jack of long lerm planning but DOt necessarily
e:onomic decline. Economic d~Iir.e in :MidtOV.'D is iI. reIa?,ve term since
several businesses continue 10 do \lery wen whIle -other major properties.
are underutiIlzed or vacant.
• city .pm:ini codes prohib[, !he abilil} 10 recei~. use permits foe cenailI
propertieo and types of Ie"ants. and, <OIl.Ieq"enUy, can be an ecooomic
liabrul)" 10 existinl property cwnen and or.erchants.
l'IIysically uPlradin, of sid .... aIks and imp,<w.men IS and signag. in !he
ala. and improved ";Enage are needed. There is • feeling Cha! MidI""""
bas beea oecle<:lcJ by the Ciry.
po. H!
N. MARKET P01:ENTIAL
Pcmand is projected 10 be primarily foe tWJ1.,. IIlat off", merobandisc typically found
ill neigI1borflocx! Jh<lpping cente .... Sllck as, food related tenants, restaurants, drug stora,
gift and cazd sIIOj'S. video .:Id boot stores, barc!ware. cleaners, ~d the like. 1)'Pi<:aI1y,
apparel is DOt a common Ienant in suck centers because 01 the strength 01 major appard
!10m iP. rogional .bopping ttnierS.
The residen tW trade area served by MidlO·.·. is • tr.I!fitiooal trade area that serves the
aeec1! 01. residentW Deig~borbood •. with • primary emp!>asis on coDveniero<e retail. The
Irade area is bordered ~y u.S. lOI oa the cast. EI Camino Real on the "'est.
~ Road on the cortlt. and San Anlonio Road on the sou!lL
The Co-op, • specialJzed ,rocery store. and other sclec1ec! stores receive market ."pport
from beyond the identifie<l trac!e area. However, '" our joogment. the majority of the
marbt Sllpport is from the MidlO"'. residential trade ar"".
11. Pop.loJUJa """ Dtmographic Tnrufs
.The M'1<lt"ws trade area is estimated 10 bave a currenl popuLatioo of roughly 34.220.
The demographic> of the Irade area are stro!1g.
""",b<;oo
Household lncowe
H00seh01dSiu
Wedillll ~.,e
PopuIarioo 60 and' Over
Some ct'C~ Ed'UCJI;UOB or Hi&bet
Sw.-:. ~ WantoR '"-.r~ h:
Dc...-...,n.r M'II1t<fl;q InrarmuiOil !.:r-I.:",
:17173-\0001.007
3-4,220
$11,138
2.21
37.3
liii
'6~
r,601,OOO
$02.439
Ul
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12~
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The a:in& population also bas an impact 00 Ill. current and future demographlcs t>f !he
ttade ara, as ~ by:
• The Ivel4ge boosehold size is estimated b~ lilt census Kt be 2.11 as
compartd 10 an average bouseOOld liz. for Santa Clan. Coun!)' of 2.81.
• Median "e is 37.l ,""",s 31.9 in the Count)'.
• Per~tag. ofpopulaOon over 60 is IS" versus 12" in the Count)'.
The ser.io< shopper> bave Ir3ditional1y bad a strong orientation 10 Midtown, AI thej are
replaced by Joonger bouseholds with ohilllre", it is IUSO<.abl. 10 expect that the demand
for neigbborllood services will increase as .. -ill IiIe lIouse1,QJd income.
Expendit= pote.ntial is I funcoon t>f the population, its demographics. and income
levels. .KMA has condUoC1ed exre-nsive researcll on retaIl consumer expenditure patterns
tbrougll its varioos assignments. This re3ea1Cl> i. adjusted for the unique demographics
d the Midlowo trade area 10 determine the e'penditure potential ~lIllllabIe 10 M'ldtown.
DIle to the fact !bat this I<>cation is essentiall) • neigb!>orbood sIloppi..g am"". the
expenditure potential is estimated for food >!ores, d<ug stOres, specWty ret.aI1, and eating
and drinking places. The "xpencft,ure poIenlW for Midlown Ir.ide area residents is
~~IO~: .
Food Stores
Drug Stores
Special!} Retail
Eating and Drinking
$4I,QOO,ooo
$8,000,000
$49,000,000
$46,000,000
Next. the estimated .xpendiMe pctential was compared 10 the reponed taxable sales for
the Midtown Shoppi.og Center. as provided by the City of Palo Ait". Due to the
confidential oa= of Ill. sales information on incftWfual businesses, the sales are
grouped into the categories t>f food >!ores (Safeway and Co-op) aild the balance {noo food
stores).
Food Sto,""s
Noo Food
S2J,&"<;(),000
$(,,64Q,OOO
Food SIDreS sates at Mtd!OWD represent "approxjm.ateJy 53'Si of the expenditure J>Olt9-tia1.
Io. fact, \he food S\Ofes represent less tha., SO % 'to"" sale. at the C(K)~ Originate from
beyond L'1e trade area. However. ot..'1er food :s[ores also serve the MidtowD I:rade areal
1'11.13\.000"1.007
--t-",
.. .-;:: •... . -, ',,-,-.
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'~'-'.?
. <?~>',
lncloolDg: ¥o!ly StmIe OIl caJiforr.ia Avenue, Piana at lite CIo.arlesto<1 Center and tWo
d.dor u.:k)', st<J<eS at tl-.e Alma and Edgewood shopping tenters. Alw. MidlDWl>
~dents .!lop at major food sto ... in Mountain V ..... ,
fa ,enera!. food Slores lypicoDy cap!ure a high mmet "~aIe (90" or more) o( Ill_
demand from lite immediate Deighborbood. Collectively, botwee. lite Midtow. Shopping
Center and lite O!ber food stores seN,ng the trade area, Ibe demand ~ food is e;sentially
being met by the existing rores. He,._vcr. e.isting food stores at Midlown do nO!
~fle<:I lite ~nd in the industry 10 develop larger supermarkeu with a broa6<r mill of
mercltandi30 and .maDer specialty food stores. Supetmarl<ets Ii-i face t~_ <!ecisicn
of' whether 10 expand or 10 close me sman, cider stores (1!lthooSlt t'1e Safe,..y store in
Ml<!IowlI ;. uperilol1cin& very 1I1g1> volumes for its si .. and there is DO reason 10 believe
lila! Safewa)' woo!d clo5e Ill_ Midtown store), In a market such as Pal<> Alto, it would
be ".pected Illat there 'lloold bo a strong demand'" e.pand existing supermarkets and,
in faCt. Illere is wit\ the plans proposed by Safeway at Midlo'"" and Lack)'s at Alma
Shopping Center. Additionally, we conclude L~at ll1ere is dema!1d ~ specialty food
stores that can be "",""ssruT i. smaller STore sizes of 20,000 sq.ft., as evidenc<d by Il1e
recent remodelling of Piazza at Charleston.
'Non food Store sales represent apprournately 12'J1; of Il1e expenditure potential ~ drug
and specialty rewl. exclusive of eating and drinking. Based 00 Lllis firKflIlg, we
cooclude:
• Drug store estimated expendirure potential of 58 million indicates that
Il1ere is demon;! foc. majoc dr"g store. whic' range in size from 10,000
10 20,000 sq. ft.
• For speci"it)' rew1. ",hieil incl"des sueh calegorie. as books, gifts,
jewclrj. sporting goods, florists. rnu.s~ and muslcal instruments, photo
equipment, <Ie .• a large percentage of lIlese retaIl sale' Iypicallyoccur
beyond the lmme<f"'te neighboriloods, at sue]; !ocatiOlls as downtown Palo
Alto and Stutfo<d Shepp;", Cente,. Notwltl>'tandi!1g the low market
share th.al wou1d Dor-maily be expected in MtdtoWJl, we beIieve that there
,",'oold be additiOlla! demand by retaHers iJt • moduo slwpping CfNeT
,.njiguraIion, includi.g mode,.. retailing stantIards fonhe Iluikfings. If
tl1e market sTiare were increased 10 20~" lJo,rhicb in our judgment is not an
unreasonable market share, MidtO",,"'D cculd CClpture another 53 millioo in
saleS .. "mel!: translates. in to higher sales volumes in existing $;paces. ~
.• For rest.aurants. the: expecled market snare at Midtown is expected to be
minimal due the mac) ahef!lative locations 10 dine, including fast food and
(uH service re".autants Il1roughout the City of Palo Aha and Il1e broader
--;. .
, I
market W, in general. ~theless tl1~ $46 1!U1L'oo market poIelltial
represented by the Midtown truk ..... re,iden t5 indicates !hal thete \lIOUId·
be an <'I'PO'"fllnilJl '" a<kIlimited restaurant spaces, such as a coffee house
and bistro.
D. S""""""
Is: summary, "'""1 0( the existing lenants represent me type> of Ieflants lIlan.ouId be
npccled in Midtown, such as:
• Sa[ ..... y
• Co-op
• Video store
• lee ciear. shop
• 5eGood t.an4 clothing store
• Bike shop
• Phar.n~)'
• Florist
• Pho;o
• Hardware
I 1-11
• Several foo<! establishmel\ts. $\)C\ >s, MUIJ>by', Pizza, Round Table Pizza,
ODd County Faire
• Expansion of several 0( the exlsllng tenant>
I Speci:u't)-food store
I Defi
I Coffee boo",
• Limlted restaurants. SltCll as a bistro
• Oif[/=<I shop
• Home furnishings and acces.sones
• Garde9 suppfies and furniture
• Drug store
However ~ as stated in tlIe lntroducti01l to this report.. market feasibility is not equi'¥aIent
1G tenant interest or" financial feuibfl:ity;. apart from v.'heU1er there is J. demand b
various retaIl products. other facK>rs are of crucial !mportance in determining feasibility~
Crucial factors include., «:onomic and financial fe",ibml)' of each incfiviJuaI properlJi
ow~ funding source requirements 10 finance: tenant improvemer.tsJ community goals
and poEtical consideralioos, parking codes, and av.ilability 0( lenont>.
In7~1,007
! ;
V. COMPARATIVE ANALYSIS OF RETAIL SALES AND RENTAL HAnS ____ ~ ________________________ ___
This sectiou compares scvciaI Pak> Aha neighbornood shopping """ten, .specificany
Cllarleslon Cenru, Alma Plaza, aJt<l Edgewood Shopping Cenrer, ",Ith MidlOw:a.
Inlentkonali, ... luded ~ Slanfon! Sl>opping Ccnt~ a!\d ml!.j<>r >hopping SlrOCIS, ""'h lIS
'" Carlfumia Avenue ond llnivenity Avenue, ;hat serve Ill. larger Palo Alto community.
A. Cluzri4S10lt C.",.,
The 4S1 acte Char'.e<!O!I Center is located .t tl1e soutlternmos! corner 0( Charleston
R""lI at Middlef",kI ROIid in Pak> Alto. Accordiog 10 a 1992 report by Grueo Gruea +
Associates, A 1'faImi."8 Policy Audit of hlail !Ireas in 1M CiJJ of Palo Alto, Ihe cinler
has 41,800 sq./"" <>f floor area. The majorily 0( 1Il< rentable square fooIage 0( Ihe
sI>opplDg cenler is wntained in two bUIldings, ,.ith a retail pad builcf"'g fronting ""
Middlefield Road. IngresS and egress is good from bo!h Cbar1estoo. ond Middlefield
Roods. The center was reanfly beeo remodeled an<! is ntaintained and has good curb
appeal.
1. r.lU1IIls
The Cbarleslon ~nter's primary anchor ,,":e'l! is Piazza', Fine Foods, a specialty
grocezy marl<et 00er major ""'ants inelude Owlesto£ Care! &. Photo. State Farm
lnSllTana. Pal" AJto.Stanford Florist, a lIardware store. 2 video store and an ice cream
sIlop. There are several o\IIer sIlops and sman tenants as ,,'en.
J. VOCOIIQ and l.e= ROles
The Charlestoo Center was developed in tlte l%Os and ~ .. been reoovated within Ihe
past t"'o year ... according 10 Ihe leasing brolcec for 11>. anter. The CCIl1er's C\Irrent
vaca,,,,y rate (as of September 1994) is estimated at 6l1;. There is OtIe in-line space
available •• 2.400 sq. ft. space ,.hic~ iormerly bouse<! • bicycle sbop. av.Dable 00 a.n 'as
is' basi. for I quo!ed renllll rate 0( $1.25 per sq.ft. per mooth, triple net. A cun-ent rent
roll lor rl1e existing .enarll$ was. not 3vaiiab!e for KMA to review .
.t. SaTe;
The O'Vcrall sales are estimated ~ be t~ ... 'ee9 $$ million and S6 nullion. Piazza sales
represent about 7:1 lI; of L". lOW. Foe the baiancc of Ille cenrer, the wes acl"-ily is
below industry sta11dards, with average sales per sq.ft. under 5100.
Hi 73iOOO1 ,(l07
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1. Plrysi<:ol Description
"I The 4.26 acre Alma Plaza is located on the nortlleasl side 0( !11ma Streetjull oorth ... est
0( EasI Meadow Drive in Palo l.Ito. A<ro<<!ing k> the 1992 Gruen Gruen .. AS>Ocia~
n:porI, the """ter}:as 55.500 Iq.ft. <>f floor area. The center bas an •• ,l<wan! L-sbapod
eonlif'll2lioo "jill two b"ildings bousing the majority 0( the "",labl. reWl space. with
a small two story oftice and ..... n building at the rear <>f tll. site, fronting on • narrow
walkWay with 110 visibilily from Ihe street. In""" and egress is from Alma Street 0fllJ
I,id ;. orJy fair, due !o Ibe higb craffx: volumes. The <'CIlter has • some .. hal """"
appearance .
2. TinIw.
The Alma Plaza's prim .. .., anc1lo< Ie<lant is an older L.cO,y', store. Other ",.ajo< cenants
" include Rouncl Table Pi:ua, Gamer', Pro Bicycles and the 8J. Bun Rcsta'..-anl &: PIlb.
There are several 0Iher shoP< and .,nan off-=< and retail \enan1S as wen. There is also
• wco.!\! pad site. fronting CD Alma Slnoet "" the westernmost frontlge <>f Ibe ~.
'1l\aI ~y bouoe<! • Chevron servk:e station.
Lucky's is reportedly planning. major rein<ldefmg and expansion <>f its store at Aboa
Plaza.
ICMA spote with Ibe leasing broter for Ibe center cooceming the vacant retail space and
Ille pad site. The celller', currerI vacancy rate (as 0( September 1994) is estimated at
(i~. but Wll! be iricreasing 10 11 ~ later tIlis ytM .. beg the liquor store vacates. lbere
are several small spaces available in tile rear O(lbecencer for SL2S per sq"fL per month,
triple net. according 10 the broker. However Ibe asking rent for tne liquor space will be
is tile S!.SO range, due 10 its supeOOc location in the center. The pad site is scheduled "
'" be developed in 1m, "'ith 1,500 sq " fl. o(rentabie retail space planned. Asking ""'IS
will be in tile range <>f 52.50 per sq.ft. triple DeL A current rent roll for tile existing
tenants Vr'&S Dot available b KM.. .... to review.
ThelO!al sales is eSliTMted 10 be under 58 mmioo. Lu<:ky's 'epresents about 80" O(the
activity in the ""mer. The bal.""" 0( the sp>Ce ~as a below par level 0( sales actM!y
... ilh average sale, below $\00 per sq.1L 0( bll11ding area"
.: "."
" ... ,
-' ,-' .. ,. '.
In summary. the center shews siga of di~nvestmenl bul is· slated" for expatlsion and
remodeling wbi<:b sIlould cnhani:e Ibe co.lter", oompelitive pooiti<>n ..
c.
The •• 56 OCr< Edgewood Shopplng Cen!e1 is located at Ibe corner cl St. Frailci. ome
and Embarcallero Road just south cl Ibe U.S. Higbway lOllEmbar;adero Road
inteftilange;" Palo A..'I<>. A~g 1<> the 1992 Grue. Gruea + Associates report, Ille
=ter ha> 50,660 "I.ft. of floor area in L'>ree retail build"rngs, m.olud"mg • free-standing
Lucky" store. Ingress and egress 10 the conrer is poor 10 raIr, as tbe GrueB report
noted. By Ibe nrne an unl<n<>,.,le<lgeable shopper tra',eJ1ing 00<1h OIl Emban:adeto Rood
sees Ibe Center tile] are likely to drive past me center and find themselves OIl • (ree ..... !
ramp. Similarly, motorists .Jtiu.Z \he freeway from the highway have limited visl1>ility
clllle Center and fita. time 1<> turn O<Ito St. Francis-Drive into the Center. The visibility
. is limited due 1<> an l>ffice building and gas station ",bi<:~ si! 00 0< near !he corner of
Embarcadero .Road and St. Francis Drive in from of cbe center. The center has I
somewhat "'on! appearance.
1. Tenants
The Alma Plaza', primary anchor lenant is an oilier free-s!and'rn, Lucky'. store, as
mentioned above. Ocher major Ier,aM, include Ibe Palo Aha Produce Market, Fornko',
Restaurant Piz2eria, .. dry cleaning estal>lishmel\t and I li'loor and video store. Tbeie
are several otI1er small rewl !etlant5 as .... n.
The center' 5 cUlrent vacan<:y rale (as of September 1994) is e:mroated at 2 ~. There is
one in-line Sp3".e avaJlable. a 1,000 sq.ft. space .1 L'>e rear of the <:enter, available f0i
I quoted rental rate ofSI.2S per sq.ft. per month. triple net This space bas been vacant
f<l< more L~an a year, ,"",ording 10 the l>coker, prcb.bl. due 10 its pooitioning at the rear
of [be center. A c;:urreru .renr ron for the ex..isting senants 'A'aS not avai1abIe~ but !he Palo
Alto Produce Market reponedlJ renewed their ~ for 2,500-3,000 sq.ft. at S1.25 per
sq.ft. Overall th[s center "has a simi1ar curb .appeal to the Midl.Owll Shopping Cenref~
The lOla! sal .. ore estimated 10 be .pproxlmatelJ Sl() million. Of this, Loc1cy"
represents C\o'er 90%. Tbe.salc:s activity for the baJan~ oft11e center is modest.
1" 73",00CI1.W?
In comparison 10 !he <>!her tItr<e ",.ters, Mid,o",. is the healthiest an<! mOS! successfJ!
of \he zroup, notwilllsta.'lIling thai Il',ere is over 30,000 SQ.fI. 0{ vacant s;>ace in
Mid~.. In our i\:dgment, this retkots more on rhe poor performance 0{ the other
<enters I!l>JI it does on !he success ot Miiftown. The follcwin, are our finding"
• Midlown is the largest ot aJ1 It", centers.
• Sofeway lias lite ltiglte5l sal .. of an ille major food stores. almost twice
the Lucly', store at Edgewood an<! almost l~= limes \he >alume of \he
LWIy'I !lore in !he Alma Shopping Center. The poor sales ot the m>,joc
super.na1iets is part of \he reasoo of \he poor performao« o{!be other
«nret's.
• . The ,.modened Piazza bas salet Iilal approxi mate OH>p, iMlCating !hat
it lias beta able 10 establish • market niebe.
• The sales per "l.ft. in Mid!o",. (for shops thar !:ave laXable salet)
ave.-.ges $193 for !he srnancr sllOp space. Simllar spaces in !he _
Olher centen average less Illan 5100 per sq.ft.
• The quoted rents are gener.ny the lame among !he centen for !he smaller
shop space, except that M'KlIO~'. "!'" =eive premium ""IS for space al
\he comer ot MKldief.eid and Colorado.
t-I _
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[
VI. ReNT STRUCTURE AND PROPERTY VALUES
'i"hls sectioD summarizes our findings on Ille fo'1lowing areas:
• Rents
• property Values
Information O!l rents was provided en " <O<lficfential basis and. tl1ere(ore. ;pecific :en!.!
.... ,not ~ qUOled.
]tenllevels that tenants are wi11ing 10 pay are determined by many vartabIesJ inclu~nc:
•
•
•
•
Demand for space in. MidlC"" .. ,d fr.e perceived long l<:rm viability 0(
Midtown for mal particular merchanL
Rel.ationship 10 parking and me ability 0( me mercllan! '" satisfy lhe City
l.arkin, codes. For o><ample. lhe wen s Fargo builcfmg Iwl been cfifficuh
10 release due 10 <he parking codes.
WIle. bndlond. seclt Ill. Ienan! 10 fund <he costs related 10 its own t.enanl
improvemenu. rents ryp;,;aJ1y are redU<:ed 10 ano..,<he merchant 10 absorb.
<he ~0Sl.
• The general age and condition 0( tlle space. For ex.mple. many 0( the
commercial SJ>;lCes ",ffer from boll! physical and functional ob>oleSceoce
due \0 me age of b'1e improvements and the lack of reinvestment ovu the
years.
Base<! on infonn.tion p,ovided by Ill. property owners and tenalll<. tie rents in <he ......
are generally in the range 0( 5.85 per sq.ft. per mootl! (NNN) to over 52.00 per month
(NNN). Ho"'~er. <he majority 0( tile rer.ts appears 10 he aboul 51.SO (NNN) or less.
for buildings that do llOI. meet k>day~s current marJcet standards and ~ in need of
subSl&ntial reinvesunent. rents can he hero ... S 1.00 lNNl'I). II has also bee. reported thaI
;:ecent renegooadons Q( rents Jlave resulted 11] I decli~ iff rents for se ..... era1locations in
MJdtDWll. Thls bas beeg·the case for smaner spaces occupied by lenants as wen as for
l.,-ger spa<es thai .n, ""'" vacanL AI><> by mooe", ret.a~ing standard •• the depths of <he
1711J1OOOI,001
. :
" ." -~-:'~ .. ~ ~::#:·~:~':i:", ~~~>
~·~-i:'<-.-·-
spaces are. c!eeper Ehan ~lanen oeed and consequently ~ effective rtfll$ Ihal !et8llers
are payin, fur useable space is higher t!1an 11'.; "",1$ quoted above.
TIle purpose of this reporl is Mt 10 place •• alue O<l each of lIle parcels in Mlc:town.
However, it attempts 10 identiry l:11e issues tbat impact _1olues. Value i> • ful\Cllo!l of
income prociuced by ~ propeny. Value is also • function of otl".er values paid lor
similar prcper'.;e;, whi<:b is based Of! 1:11. principle of substitution. Due 10 tile unique
nature or Midtown with lU many pa.-eels and the pubEt ow_ip or pamng l<>! in a key
area, ~alues will primarily be based on the abilil)' of the property 1<> p,oduce in<:ome
since the market provides kw good ccmparabTe sales boV\ within and outs.ide of Midtowa.
!hat "'" use<!.
Based 011 current rents, !he property values suppo<te<l (UlClusivo of bod! land and
improvem<nts), 1IIbea rooverte<l 10 • value per 'sq..ft. of only lar.<l area, average
approximately $50 pet sq.ft. of land area, with premlum values lor properties with
MiMJefi.ld frontage a."d discounts fa< interior parcels. Values are high clue 10 !he fact
tl1at many or Il:e parcel. are smaii and that ~ re:ationihip of building 10 land is hiil>.
NotNithstanding. the fact tha! major reinve5ttnem in many buildings is necessary. the
impr<WemeIlts are still abl. 10 t<Jmmand • rent in the market. Furthermore, the fact thai
parcels 00 001 t.avc all ,equired parking 0!1 sire due 10 tlte presence of the public parking
kJ( also coo!ribute. 10 the rugb value.<.
As ",il! be dis,cussed further in Section VI, ~ intent of ~'lis preliminary value estimate
is 10 creale I: frilmework in whkll 10 discuss alternative impitmentation strategies.. ArJ
.ppnjsaI of each individual property was no( underu.ke., 00£ should tile preliminary
value estimate be coosidered our opinion of val"" for ead individual proper!)'.
However, future value can be negatively Impacted by:
• The uncertainty of!l-.e ecooomic future. Today, Ill< inability 10 anticipate
a future appreciation of vaI:Je with L'ae economic stagnatloa and ~t
declines in fC!lts will result in buyers reQuiring I. higher economic me of
mul'll in establishing ~ue than foe a siml!ar income property in a
.succeSisful~ esablis11ed neighOOrbood cenler. EffeGtivt:ly I this means that
values will be set at a higher capitali13tioc rate. For eJtample, I. sener
may set value based 00 a 9% 10 10% capilalization rate and > buyer may
use J I" or hlgll<,," "
t71.7:i1OOO1.DIH ...,. 36
r
. • Owners J;)eCd so recov!:z.e that reinveslment is needed in order to maintain
value even if rents do 001 increase by a ronespondin, "",cont. Ralts
ma, decline further if there is not. revitalization 0( ~ 9olei. Since many
cf !he buildings.,., reaching the end of Ihcir economlc Ere, substantial
rcinv..unent is oee<!ed, such as code require=ts (seislT'.;" and ADA are
lite two m<><t commonly mentioned), QOSlIO remove bazardoot matcrials.
and:he ~ Ie> f",Js/llhe S!>"'" b 11Cnaflt. ColIective!y,1hls oo5t can be
high ro.. older bundinf" in exc:eos Of $50 + per sq. ft. 0( building area
.. ben • new lenill\t requires an. all BCW retrofiL Obvio<:sly, lite cost is
mucb lowe< if !he tenant is willing to acGept the space "as is," will! ooIy
minor imp ... ovem~nfS..
F'lllalty. in dl>CUSSl.lg value, it I!as bees asSllrn«'! that !he properties are not impac!cd by
the PI...nce of OIly 50<1 •• le>XK:. or baurdou. conditions that """" 10 be IemOO'!3ted.
'71~1,OO7 .... "
..
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VO. IMPlEMENTATION ALTERNATIVES
NotwiL-'ng the SIIOOJ demogrllp.~ic. and marl<et opportunities creat.ed by Midto","
=idents. the long term viab'Jity 0( ""-'.:t"",. Shopping C~nter .boo!d be • m.j<>< issue
0( COI1CerI! for the City, tlte property owoo ... , the Ion .. ts, and Deighborlloo,t
This repon SlL'llJTlal'i= Keyser Marstoo AssociateS, Inc. 's investigatioo into the
feaslbilit)l 0( the lone Ierm viability 0( Midtown amI 10 develop alternative ruategia.
The key quesliotu a6dres>e<! i> Ihe ability Ii> implement a successful !e\lilllfuaQoo
straIegy for Midt""",_ measured in !el1nS 0( tlte potential 10 bave OJ! ... "five ond mat
DeiEhborfloOO center.
The key .,..,. for first ~fI"or'.s 0( major reviWilation i. the ""ea "","prismg the nort!Jeasl
ccrner ofMiddlefiel<l and Colorado. It is believeil if dIere is • s:>bstantial reinvestment
in this L'U, reiDvC'it",-ent in \he 1>alllllCC of Midtcrn "'QUId ~J follow. (The SCC\lO
of effort in Ibis ,,<><11 requires that private redevelop .. ""'t be c:oosldered for the area from
the Co-op III \he Welis Fargo BanIt &~cfir.g.) No specifi<: site plans were developeil. or
.. :'re new tenantS C""~, both of wb.'ell were beJODd the .se<>pe of this effort.
A Jt.nougll residential mixed use projocts lIave been CODtemplated for Midlo ......
consi<feration ..... limited strictly 10 commercioJ land .... "';tlt the followi", options:
For the area comprising the northeast corner 0( Middlefiel<! and Cclor..oo, whicb .. terods
m.llthe Co-op 10 the wens Fargo building, two ahematives were consiclered:
• Upgrading and rencwati'ng Ule existing iDlpiO"rements and no Dew pO\"3te
development; lil<!
• Recoos!ruction of the entire .,ea from the Co-op Store 10 the wen F"'IO
Bank.
In our judgment, !he ley., .. for the fIrst efforts of maj<>< revitafu.aUon is !he area
comprising the northeasI corner of Midtown. A.s part of this analysis, KMA examined
a1rern.tive implementation strategies r.mg Tng from reconstruction cf the existing
improvements 10 reconstrJctioo "'ith essentially new improvements .
. .
17"l1:J\OOO1.007 '-"
Un<fer !he Illerna:i'. Of DO major DeW coostruetioo and continued use of !lie existing
improvements. KM." recommends a1 minimlJ;m that theft be programs to: .
• llpg~ !he pIIysical appearance of the par1cin, lot and !lie landscaping.
• The City shoold also ,..i;e its policy relative 10 parkins, since such po!icy
can !tinder 1M ability or property OIiIOen 10 ~ !heir buil<frng •. The
recommen4atioo is 10 waive 1M parkin: restrlctioD 011 • case bl case basis
provided that 1M property OWllG $Ub~tantial1y reinvests in tfic property
and Ihere it • firm eo!llmitment by • tey tenanl !hal wiU strengt/le. L'>e
re.a.l vitality Of 1M neighbornood center.
• The City shoo!;! re ... ""ioe Ille velticular and pedestrian circulation wilh
respect 10 the ls$\.~ related \0 sarel) and \he ability rl pedestrian. 10 cross
Mldd'.efJeld. Spe<ifically, we suggest that !he City consider narrow'."g
MiMIefleld 10 two lanes. if tecbnkal1y feasibk, 10 all"", !he ""era!! area
k> be inleg~ted' as • single center rather tnaa four individua! comen.
Additionally; l'>e Darrowing Of Midc!lef1eld has p/lysical advantBies ;,y
allowing wider sidewa)'", andlor provision Of more parking.
• Continue wilh 1M program. of !lie M"""hanIs Asoo<iation.
• Use lhe sLINe)' results ID bener SOlVe !he need. of the residents.
Under current conditions, lhe major wcancies probably will be fe·leased 10 '""~ tenants
as • drug store, commercia! offICeS. coosignmenl and secood hand stares, .. ,tiques shops •.
and c.dler low intensity commer<:ial uscs.
HoW'''''', with approximately JOJX)() ''1.ft. l'OCClII i. rM ort!Q comprising rh NJnheasr
comer. tf Middfefield amI Colorado an4 marry if lhe buildings in "ud if rti.Ye.SlmtTJl
i1!Volving su!J"f(wia/ don." (assuming rekosi.g rile spaces 10 7",aik" rhaJ will Iurve "
hnamic impact t»! th. shopping CIS/ria), we do IlOl belie .... TIal the l'<C"'fSlru,:rio. ifrh
eriSting impro\le1nems and lhe aoovt actions oTor'-t 'hill t1IaIeriaIl] Tt\'eTSt rhL economic
prol>tems iflh. Dr,a ova /ht Tong lerm and emue lM tfynamic neig/lborf.ood celli" rhaJ
she resicfeMal commlmiry tfesfns.
.
.';
0.... reason is e.sentiaTIy that the historic development pattere and \he fra&ment<d
inlt<eStS of '1I>e multiple propeny oWlIOn of MidlOwo are hindJanca 10 I coorcnnated·
"PfllIdin& in II>e !IOrtheasI cuner, Examples of \he coofih.-tinC inreresu lI1.t cause illO
be clifficul! for II>e propertJ owners 10 work in C<>OCetI include:
• Wi!llout • firm commitment b, • voup of property owners 10 reinv ..
substantial dollars 10 modernize ll>eir properties, owners are relUC1ant 10
proceed individual11. This problem ;. oxacerl>ated by !he fact !hat some
owners do 00( appear 10 !lave II>e f<JWlcial reSOlL .....
• The ability 10 attract new inYestment cIoII.... from !leve1opers, for
e:wnple. is very clifficWt due 10;
o Prope.rt) cwners· perception of ~ctlues causes new investment to be
marginal') feasi'bIe. However. owners need to recognize that
reim'est.meru: is needed in order 10 mainwn .. 'alue C1r'C9 if rents 60
!lilt. mer...., by • con:espoodmg ~r.L Ron" may decline
further if there is !'lot i reviOlfizatK.~ of tbe area.
o Ability to colIectiYely re<Xl<IStt\1ct several properties is V<:r}
clifficulL Tn several c:ase., """""'" !lave stated • desire DOl 10 sell.
for r<aSOl1 •• .x:1! is: higl! !ax Eability. inability 10 reinvest monies
wltl! • cvmpara!>le retW'll, '" simply II>e desire 10 main long tmn
ownership,
In "'" judgment, long lerm Jevitailzatioo will only oe<:ur with r=nsIruclion. Wit!!
IeSpec:1 10 implementation, for reasons tJ>al ",ill be e.plaioed subsequently, it is our
Tudgment
• Traditional developer role in ,he reconsL"UC1ion olll>e oonbeasI quadran!
of M}dlOVrrtl is Dot economicali1 viable.
• PropertJ owners should' consider retairling • fee developer, "'itb the intent
~at \J1e o\\tners. ess.entiaDy reu1n ownership.
• Att.err.atively~ the property owners could work with an anc"hoc lenanta b
this ~. \he "",Qn,truction <Jf \he area from Co-op 10 Wen. FarsI)
probably would be n=sory,
• ... dclitionally, tIlis effort will require a joinl public private paI1nersbip,
.. ~
Traditioool private devel<>pers, in our Judgment, wcWd not be interested ill undertakin,
ru efforts 10 assemble t'le properties and recons"'""t. The reasons include:
2 .
• The lime, effort, aM lSSO<iated COSlS for • developer represent 100 higb
• risk liv", tlle unpre<fiCtabili'Y 0( tlle OUICOffie. A developer must bave
a big. Ievd 0( certainty L~at the community groups and the City Councn
will suwort \he proposed development (jncluding mix an<! I)lpes «
tenants).
• The development economics arc DOt feasible for reconstructicD 10 SllpjlOl1
estimated property values an.! a requirement to produce. developer profit.
Prefimir.ary Wimates 0( property oro .. , averiige ap;>roximalely $50 per
sq.ft. whea the value of land and improvements are COD\lerta1 into llar~
v..lue. (If tlle City were 10 .now t'le exiotin, J>l't>1i<: parking 10 be .sed 10
meellhe parking requirements at DO COSI, \he overage C05I would be less.)
Our ali mate that supportable rents after reconstructioo ere estimated 10
be in Ibe range 0( $1. 7j per sq. ft. per ulOOth (NNN) with premiunu for
\he comer Iocatioo; but the existing property v..lues and !he requirement
10 produce. developer prof~ require average rents 0( 52.50+ .... hi<~ are
DO! supponable. The COS! 10 assemble Ille site would"""" 10 be i. the
range « 52S per sq.ft.. or approximately half \he Wirr.ated property
values.. II seenu ur.likel)l that ajolnl \lentlJre with propertJ OWDeTS would
overcome 1his issue.
. The =pt 0( a fee developer is 10 introduce the Deeded e.penise to reooostruct. Since
the developer is paid OIl • fee basis, Ille Irnditional pr<deYetopmen! risks ll1at are
unaccep!able to a traditiooal developer are minimized. Esse.liaDy Ibe existin, Owners
wntinue 10 retaID ownership and thus the issue of C\lITeTlt property v-cJues might be easier
to deal willi. and \he need for the proje..""t 10 general< a developer prall( is minimized.
l. RecorsrrucfiOfJ wirh all Anchor TeTIiJIU
Aoocher aItehlati\le is lOr I major lenanr lO act as the developer. The anchor tenant
es.sentian)' as~mes me rok of the developer and provides the expertise. Also the ability
SO provide financing for Ihe reconstruction .is iI. major ber.efa. A major tenant as
developer minimizes the need to satisfY it tkveloper profit requirement. In Ole case of
MidlOWD. the logical' tand'ida!:e is Safeway. Al stated in the introduction, DO contact bas
beeA made b)' KMA .'ith Safeway. If t.~ey ,",'ere interested ..... 'e would recommend it
~7173\.OCiO'1.007 ......
~-.
eoncepruaI program be :le>'eloped on thenortllcast comer ol MiJdlefJCld and Colorado.
such as 1110 following. 10 be 1Io,te.! in detail: -
• A minimum amo.",! ol small .. 'I<Jp space. ol say, 30,000 "l.ft.;
• Ex.-,,]ng Mid.DW. tenants would luIv •• prefe=tial opportunity 10 ~
space; and
• SuffICient square fooCage for the anchor lenant 10 bavo the incentive 10
pursue sucl! an effort.
• Consido",tlon s!-.ould be givea ID lIle 1Wl'''''''''g Midc!lefield 10 two 1a.'IeS.
tllereby enlIancing tile pll ysica! .. 'ld pec!estrian enwooment and reinforcing
&he entire Midtown area 'is one coheSive DC'-igbborhood center.
In Ibis effort, we wooId recom mei1d 1l12I if an acoep13ble solution. <;aD be reo.cbed with
aD the parties tIIIlI the Cit] allow the public parking lot 10 be ,e""" for the new parki",
requirements withoul ail) COSIIO the Oevek>pmenL In Ibi. prop<»al. Weway "'<>uk! need
10 a<:cep( • mid-sited "ore lhal is substantiany less !han the new 60.000 sq.ft saperstoR.
Property oilmen wool<! also need 10 be ",illing 10 support this approach. PropeJ1y
~ could eililer cr"""tly seD or invest their iand as part of • joint vontu",_ Giv ... \be
multiple objectives and ;nteruts of the "..-<>en, it is DOt possible 10 predict L'>eir ~_
Before sucll • response "'lUld be Oeltrmlne<l it wouid be ncce=ry 10 undertake I deW1ecI
feasi'bililJ ana1ysi. IhaI develops .. site plan,' leasing program, and developn>ent
economics.
ltedevek>pment under !toe Cl!Jlfornia Redevelopment La-.. is frequently .sed by ciUes 10
redevelop and achieve the Cit, and ccmmunity oIljccdves <lesln:c! for older shopping """It" sucll as MicIto..... Redeveiopmer.t provhles: (I) an organizational = 10
t«><d'rnale the public and private ..c.ors; tl) 100g lerm fJnd'mg Ihroogb In incremen\S;
and 0) tlle legal authority to .... mble a site wile. tile private "",lOr is DOl able !o act 00
its Ow.. Redevelopment also an"",. currefll property ow"o who sell tile abilil)' 10
move.!. tIIe;r salts proceeds IV. free for a limited period cf lime. CumnUy. there are
]) redevelopment agen...."ies pIO\llding sirr.llar activjties in San Mateo County and 8
agencie, in Santa Clm Coonty. If property owners are unable 10 work rollectively 10
create • neigllbornooc! center t1-.. : the Cit) 2.lld tlle roeighborhoOO tiesire, the!'.
redevetopment slloo1d be considt:red' for ~{!dlowa.
17.17l\OOO1 007
! '
MIDTOWN SHOPPERS SURVEY
.. The 0Iy ol Palo AiID is curren~, studying II1e Midtown ReIaiI Center 10 devek;p a revjratf,.rioa
plan L"II! lin"">' b' !he Center. The Mi<!IoIllll Residen,', Association, .. wcll .. II1e
MercbanI', "'-'>ocialion and Mid,o",n property owners are participating in tlle study,
w. woWd polly appreciale )IO\:l L"put regarolllg your shopping palttmS and needs and desires
foe tho Jdid10wlI Center. The respon ... of this sLU'ley will be used 10 ~ a plan b
lCYlIaiizin, !he Center so tr.at it better 5OfVOSc.: communitY.
I. How far 60 )'OIl Iiv. from !he Midto" .. Shopping Center.
!!li.: Loss lha.o 112 ".JI.
ll5.: lI2 10 I mile
~: J 10 3 miles
1.5.:3+ mila
2. How IonS have you lived in !he Mi~t()Wo Area:
a: Loss 1I>an I year
liS.: 1 10 S years
HI: S 10 IQ years
li.I.: 10 10 20 yoan
~: Over 20 yoan
3. WbaI is your opirioo regarding !he Midtown Center's needs in order f<>c tlle Center 10
. ir.c:n:ase .. sales volumes and eff .... tive!y oompete with other Center. in the marie! area.
lIs
n.
'ls
14s
TOl..J
Please rank tho statements from I 10 4 10 reflect yoor opinioo, with I being mosI
refleclivo of yoor opinion and 4 bei og !he Ieasl refleclive of your opinion.
...
b.
..:.
If.
The Center is in need of only po ysical improvements
The Center is in need 0( only lef'lant mi~me;dJandise improvements
The Center is in need of both physical and lenant mix imJ>r1'Yiments
The Ceotel' is Ik1I in need of any major improve.'Tlenls to either its physical
Q(.)O(fitioo or tenancies
A B C· D
4Q {II!!;} 125 OJ'JI) 464 (84") 36 (10")
62 (17,.) 186 (47":1 60 (I1"J 10 0'-')
2I( (58,.) 12 (i8") IS (3!!;) \I OS)
51 (US) 11 (4") .12 (2S) 307 (84")
361 400 551 365
... n.. Iono.&, 1$ a list 0( !lie ""'ants i. !lie Mldto"", CenlU. Pleas<> lndic::ite Ole
frequeil<) 1!llII you {llll:rl>!>rU _h Ier.lI!\~as>t ttOOp. TM DUml>er'.ll, JySWIR III lISe i$
U~'$;
,,; Alleast """" ..... 1<. "" .verage n: Twk¥ a m\lIlth. OIl avet>ge
1:1: Ot><:e • """,til, OIl allOfii:e
14: L.eu !han ooce a mentn. but oo:askJnlll1y
15: lWely
Safeway:
Co-<>p: Mldto'>O'o l'!larm..:y: _____ _
-i'eninS\lIa Hardware: ___ • __ _
'·11:
B. f~rants:
< B.aslrin Robbin> toe Cream. VldO<i> Emmoo, R""tau01Ult. Country f~. Harmooy
Bokery, Rool'ld Tabl. J>izza. Mutyby'. Pizza. ,-'-__ _
UniYmiIy flor!s!. Mid"""" I·boor 1'0010, Mi<llOWll VIdeG. Mldilkfie14 Vldeo,
0lW'. Sew Smart, Midlo"", Bike: •
D. Personal ~ TelW>ts:
Job .... ~. Bea"~ SalOl>, Exquisite Cleaners. Deli.', Cleaner', MldtoWII
Beauty Sakm. Mldlow. Sboe Repair •. t.fi<ltD .... C\eaJlers: ___ _
BolA Ve=IeI. Fo. '" CarskaOon. Cornhb '" Carey Real Estate, G=t
Westero. Home federal S.Wgi, Mid""w. Realty: ____ _
F. Others:
Scberba', Aut" Stoll', $coo:! Active Learning Ceoler, Vertical Sport. Product
I)e .... lopment, Act 11: __ _
W ..... l
'1 364 (S8")
52 85 (Ii")
n 43 (91)
'4 46 (7") .
IS 81 (1491)
Toea! 625
4B
II 166 (27"")
t2 134 (22!11S)
~. S6 (1491)
14 121 (20")
IS 102 (1791)
Total @
s. 00 you sbop at Sar.,.....y?
Yes
No
Coop
3;5 (sa)
79 (Ia)
60 (,)91,
58 (9"')
109 (1191)
641
4C
IU (2091)
II! (18")
82 (1491)
119 (20%)
173 (2991)
606
Pbarmacy
lOS (1791)
180 (2891)
112 (17%)
149 (2391)
91 (IS9I)
646
4D
74 (lal
79 (lni)
99 (16")
i61 (2791)
191 (3291)
604
L~
b.~
H.rd......,
92 (14")
133 (2O<;O)
144 (2a)
197 (091)
83 (1391)
64~
4E
181 0191,
84 (IS")
31 (6")
31 (5")
244 (42!l)
sn
Yes
No
1-11
84 (14915
51 (991,
35 (6")
12 (14")
330 (5191)
S82
. .cF
33 (6")
60 (1091)
so (891)
18J 0191)
264 (4591)
-590
Ii Safewa} were '" be expanded and modernized, would your shopping preferences
cllange?
Yes
No
\'-
-" -~~. --
':'<'.
6. Wbal role doe$ lIle Miello...,. CeniCr eurrtntly play with !eSp<>Cl1o your neighbod>ood
~ing po!tJmlS: •
c . .1llJ<
Very imj>!ltW1l. .it is Ille pJaee .. here yoo p"re~ase tile majority cC your
groceries, su!ldries. 61} cleaning ~".etc.
Important, iI is tile p!a<:c ",11< ... you purchase a oonsider3llle amount cC
COIl v<:nienec goods. service., etc.
!l.ehlh-eIJ unimportant, I!lO'Jl cC your purchases are made aI od>er
nei~hbo<llood cenlen. .
If yOu matted .... or .,,0 in 'lUd600 6, IhC!! pl<ase complete questions 7 ."d B. If you marked
-co in question 6, Iheo pl<ase complete questions 9 &!ld HI.
1. P!eaoe ran!; 1!Ie fODowing tfl'OS of physieal improvements IIlat you believe are necessary
. at Midtown in ordu for tile Centes 10 effectively compo'" with _ neigbborbood
"".len. Please rank tIlem I 1hro<Ig1l I, with J belng Il105l important ."d 8 belog least
important .
I.
).
Co
d.
t.
t
!._-
11.
i
. 1 n 7210002 002
Il'Jikfm, .. terionIf.ocades
Bonding Iayouti<:onfig"ralion
Demolisll existing slT1l1ll buildings 10 provic!e foe larger tenants and
improve tile Center', efficiency
~,~tomobile circulation
Pec!estriar. .. ·.lk .... ylsafet) improvements
hld"g \oaltion relative 10 SIOres
Amount of parking .
I.,an<IscapingTpub'l<: seatinglpbysi<:al ambiance
~------------------------------------
_.
, .-.
7A 7B 7C 7D 7E
,
II 113 03'" 97 (20'" 61 (14!lli) 81 (l9~) 126 (l7!l'i)
1'2 7S (IS") 83 (Ia", 18 (4") 5~ (la) 6S (14")
13 ~ (la) 13 (1S,,) 11 (4S) S8 (13") 10 (IS")
,( 58 (12") 1( (16") 30 (15) 6( (14") 66 (14",
IS 44 (9,,) 58 (Ia) 25 {6!1, 56 (la) 42 (9")
16 38 (8., 24 (5") 31 (8", 51 (Il ", 33 (1")
n 36 (7", 33 (1") n (7") 32 (7'" 21 (6.)
18 19 (I") 32 (1", 220 (SO") 51 (II") 41 (9")
19 o (0'" o (0'" 1 (I'" I (0") o (0")
Tora! 418 474 443 445 470
,
7F 7G 7H 71
II 40 (9"" 11 (7"') 141 (21") 33 (51"',
1'2 5S (IHiO) 26 (5") 110 oa) a (I a)
13 36 (I") 37 (7") 56 (II 'It). 1 (lOli)
14 4~ (I! 'l\) 19 (8S, 51 (10") 1 (I!!O,
IS· 00 (I)"', 53 (10'lt) 36 (7'" 7 (10",
16 72 (16'11» 76 (is''', 31 (6", 2 0'"
n 73 (16\11.) 8) (16") 37 (7"" o (010)
18 60 (13") 83 (16") 41 (8", 4 (6\11.)
19 o (0%) 83 (16'11» i (0%) () ((l%)
Tora! 445 511 504 61
_.
··/i'--:"'·-·
" -. ,-./.,.}
8. Wba! Iype$ of improvements 10 V.>dtow.'. !<nanl mil< do you believe are ne<:essaZ)' in
"""" IiJr die CenltSJo effectivc,) compo'" with <><her oeillhborliood ce""'B. Please zant
!hem 1 Ihrougb S ... ilb I beio, most importanl aro<l S being 1easI important
11
12
13
14
IS
16
"
18
TOIa!
IL Add more restlurnr.ts aro<l food OIJtlels, su<:11 as ". bagel .. ".... cot!ee
bouse~ etC.
~_ .!Iroodea!be;enanr mix ~ incl",," apparel stores. specialty SIOrCS. such as
I jewelry stc~. lOy store. card shop. CIC.
c. Modernize and cnlarge Sateway
d. 1tcplau .!Orne aislln, ,mall "'nants 10 allow 10< latger anchor stores,
such as • Iazg. drJS SI<>!"e.
e. Eliminate some sp<cific 1eJU.'lU from !he D:n1C!. such as:
_c.
M 8B 8C SD BE -
27S (S2'I.) 194 (31\\) 112 (23\\) SO (11\\) 20 (6")
134 (26\\) 160 (30\\) 61 (12'1.) 41 (11'110) 22 (1")
54 00\\) 85 (16") 90 (i8l1.) 63 (IS") 59 (19l1.)
-35 (7\\) 44 (i\\) 67 (14'1) 118 (275) 47 (!HI,
27 (5") 42 (8'110) 156 (32'110) 1S1 OS") IS1 (51'110)
o (011)) I (0'" o (Q\\) I (Oil» 2 (1'110>
o (0") o (011)) o {O%> 1 (011)) o (QII»
o (0") o (0;1;) 4 (l'llO) 2 (I ") 2 (I") .-
525 526 490 444 309
9_ WIuil retail center do you pa:ronize 1'0< the moljority of your <:OIlvcnl.nee retail n~"
Other Pal" _,,!to Cen",,,
Menlo Parl< Centers
Mou. ... tain YteW Centers
Other
,.,...
10. Whal cha.oso, 'IIIOUld !lave 10 be made 10 Midto .. l1 in order f« yoo 10 cbanJC yoor
:II>opping powrns and ~.ize Ihe Center for Ihe majority of your coovcnience shoppinJ
"""'01 (C!>eci all Iha! oppIy} •
LU.
b.2O.!i
•. liS.
•. llS. .. ~
Upeude l>u~di"g facades am! imlmwe landscaping
AM more re,""urants and food oollets. sucT! as a baiel store, coffi:c
house, etc.
IIroodcd Ihe Jenanl mix ID include apparel stores, opeciaItl !IOreS, SliclI as
• jewelry sIOnO, lOy 5IOre, card shop, • ..,.
Mo<IenIi .. and enlarge Safeway
Roplace '0"0 cxi5ting sm.all !enanlS 10 allow f« Iar:er ancbor 1IOfa,
sucI! .. I <IN, ".ore.
Eliminale some specific leu.ou from the Center,
Change 1he CenterslayO'JlIO improve circul.600 as weD as Iancfscoping
improvements
O&~ ____________________ __
Please ,ubmil Jour =pon..s by ScpIcm!x:r 2J 1994 10 eilher:
). City of Palo Alto
Economic Resource Planning.
Cily Manager's Office, 7th F100c
250 Hamihoo Aven oe
Palo .-',110, CA 94301
2. . Co-op markel aiMicltown
4. Mi<!IOWlI l'~
SW'V.y prepared by Keyser Manton Associatts. Inc., consultants f« Ihe MidIoWD Markel
Analysis.
If you have an, ques600s. """""" Racll.o~ Dhir. ProgramAssist<ln1, Economic Resoun:es
PI,mung, City Mana&er's Office, Ci!y of Palo Alto, at 329·2304.
I 111Z'oOOOl. 002
APl'ENDIXB
MidIOWll Ownen Survey
" ~ .. Merelwtls SlmIey
moPERTY OWNERS SVllVEY
. MJDTOWN SHOPFING CENTER PALOALTO,CA ______________ ~ ____________________ ___
The City of Palo AIIo is ourrmllylludying !he MidlO .. ,,, Silopping Cenler 10 ideIltify I stnleg,
for ~ !he Ceo.!a" •
. The City w<>cl4 pe&dy appreciate your Iakin& !lie lime 10 complete this survey, whic~ has bee!:
~,~ 10 provide die City with III uodemandin, of property owners' thougbts. coo=s, .
IDCt objectives for the Midlo_ C""b:r. AI lI"lIvldual su"", respo..... shal ....wn
eoatIdoDII!ol. Your input is c:ruclaIlO this study .ffort. as 001)' with !he joinl coopcra600 of
property 0\IIIICft, RSidcDts. merobanls and Gle Cily can an .. 'l'eclive straIegy for tile Midto"",
CcIIIor be developed.
I. Name:
1. . AddJes!:
3. TelqJOOoe Number: ________________ _
4. _ identify name of 1epl 0\IIDeJ" of propcrty(propc:1ies):
S. _lis! die ~ 0( MidloWll ShoppinJ Cenler properties in "'hich )'O<l bi.vo an
............mp inllmSl and !he length 0( lime wbicIt >"'" !lay. owned L""m:
y .... '"
PwaI A""'-0wD0mip
I7I1.l'MUMlI
_ ... "" c ........ _"' ........
Val ...
P.o. Eb..lCi2.50
PWA'ID,CA94.m
415.]29.256.)
41S 32& 3IiJ1 F.n
"
_ by FropertJ
~
PAGEl
" .-'
i --
.--"
6. lIeastc 611 in !he lOilow'.n, R:Ilt roll tabl. for <aell of yoor ka.IaI properties:
TenaotName
Square c...t
Icuod
Basclml
T_ofJcase
Slirt darl: of
Ieue ,
Leas!>
C'XpiaIioa dale
"
AD,~
rmI c1auscs
Teoaot Name
Square c...t
Ieued .
BoueP.lll
, .
Termofkue
SIan darl: of
kue
Laoo
apUaIim dale
.o\ay pcn:altage
ra>t c1auscs
7_ To !he beSI of yoor tnowkdge, docs yoor property m<eI cum:nt building <:ode
requiremcnlJ for lis c-dllI);l{ or most recent USe'
Yes No
s. WbaI changes 10 the building code d" yoo belie,. 'llould be r~uimllO allow yoo 10
diana< !he \ISC of yoor property:
PAGE!
;.~-.---~---------
:-;~~. -... -
~."., ~ ...... ~~:; ~:
"-:;.." . ~-. -" --: ...
(
, .',
";' .. -.
II. WIllI chana" 10 tile toOin& and parIcina rqubuion. do you believe .. "",Id be nquited
10 IlIo1o' you 10 c!Ian&e tile use 0( yOlll property:
10. WIllI is your opilli<Ja tqanfing 1M cumnl pbysical qualitie< 0( the Mi<l!.:>WlI Slq>pinl
Q:mor.
.. It werts .....n and the center ,.;n remairt wiable.
11. = Ma,jcr pbysical improvements are needed for the CenIU 10 be suc=sM.
lIIcIudinJ:
1. Eztemi, .. buildin& cIemoIitioa and rebuilding.
2. = Additional parking.
3. __ ~ par<in, eonfiguraIio<t
4. I!IIJ!'O"O'I ac<:eS! and MU1atioa
. 5. = lmpro\'e<! pcdestriaII safety c. __ OrlIy minor facode improvements lire needed.
lI. __ Signafi .. tioa improv=ts O!l Mid<lleficld road.
e. __ Pbysica1 ambiance and lancl5caping needs 10 be improved.
I. __ Liplini and signa&e neecllo be imp....,....,c'.
C. __ Public improvements. needed, sucII as:
1. __ Sidewa!t improvement and maintoo''''''''''
2. __ T~ planting
3. __ Landsalpin,
11. What mecIlanisms are needed 10 imple .... ent !he improvem<ms you id<ruified in
cjuesdonJ ., II, and HI'!
L __ ParIcili& reguIaIions need 10 be reIaxcd 10 a!luw for a change 0( 1i$C, •
. b. _" _ 1..inUts 00 1<Iwl! si2es need 10 be lilled (10< eumple: uncIer ameoI
Commercial Neighborhood zoning reguiaIioru, gro=y = can be DO
more \ban 20,000 "I. ft., offices S,OOIl sq.ft. aI\d so on.) c. __ smmic upgrades.
II. __ J'aoade improvements.
e. _ Tonan! improvements.
I. __ Public iDvesIment is needed in It .. following:
I. __ ~ Improvements
2. __ StIeet signage
). __ Sijinalizatioa improvement on Middlefield
4. __ LandseapiJ\grstre<l beautilicalion
S. __ l!emr SIre<:! and parking lot lighti~g
6. __ Str<eI cleaning/maintenance
,. __ /UI wessn>en! districl should be eS!ablislled 10 fund pbysica!
improvements.
10. __ Markel conditions need 10 improve.
PAGEl
12. '0\1IIII is your opinioa rqan:!il1, the cum:nt IenaIIt mix of the Mi<lto ..... Shoppin,
Center:
L __ The current mix i$ iood.
b. __ A broader mix is needed, includ"UlI! the following tenanllyj>eS
(incIicaIe oJ!. dl&I lJIPly en<! specify .t.lea poosible);
__ SpcciaJI)' RcIaiI Ce., .• &ill sbopo, staIionary sIORo. florists •• lectronict)
_' _ ApporcI mf AccesIOrJ SlOta
__ Anliqua
__ SpcciaJI)' Food ( .. , .• produce or fuIt marbI. wine and cbee.se shops. clclis) __ JtesIauronts
, FaslFood = Other SpociaII)' RdaiI Sbops, Specifl _________ _
__ MccIk:aI Offices
__ Persoool Service ( .. ", Boowty Salon, Baroer Shop. CIe.)
Banb'F'1IWICial ServiceslOffices
__ Movie Tbealen
__ Other Noa-Relail Stoza, Spccify __________ -
_ Supermarkru
__ Drug Scores
__ [;quo<'
--~ ...
__ Other Con~~ ~s:tores,~~Spccify~·~============ __ AI odIer, Spec:ify_
, c-__ LuJer. IIIOIJcr. ar.cllo<:.nan!! ~ needed.
13. Do l"'" """" In)' wcaJIcies io your property(properties)'!
L Yes
10. No
IT yes, please flII in the ~, rent roll table for eacll Va<3!!' SW'r:
v ..... s,.cen V ...... SpoceIl v ...... Spoao 13 v ..... Spoao".
~ .... ---T_ olJeue
A1I7_ --
1711)1Il001.101
'AGE •
. --,
••• <-~
/
, ...
14. PIcue ideulify ~ maJor :u.ons for !be _ condition «(bed all d!aI perl3.U!).
&. _ '_sioolpoc< business conditions.
II. _ IIuildioi cocIcs.
c. __ Poor loca!ioo wilhiD Ihc oIIoppin& center.
d. __ SUcfc!imonsio<u of buil<!ings "'" unsullable for retail use.
e. . __ 0Ye<aII1hoppin& center is unalIradive 10 """"'!S.
_ Bec:alIso or cxlsIing _ mix.
_ Bec&sc or cxi.!ling pbysioaJ qualities.
f. /Un(luDI or po..-tin, is inadcqI4Ie. ,. = LIx:aIioII. oCpwtiD&"js incoo...menl
.. __ Jnadeq\lllO)' of anchot _13. L __ Other, spec:ify ______________ _
15. Do c:umnl lax law IXJIlSidera60ru create ""ooo.me c!isbcentives for you 10 sell your
~
L __ No b. __ Yes; cxpIaiII ______________ _
16. Under COfifomia ltodeveIopm<nI Law. propetties within Jedevdopment project ........
.... be JIIIldwecl b, • ~ "''''''' uncler Ihc power or coodemnation. Undcl
a 'fricDdly COfldemnatioD· sale (i.e. !be buyer and seller are ill apeemenI), !besellcr
lias !be ~ 10 ,.,;nvest sale proc<eds within two yean without any tax
"""""Iuenca. Sale price would be based on mulUally acccpatable professional
appnisP.L AJlboup hIo All" ...... 1>0( rurTODlly b ... Rederelopment A"""",
1iudct caJifornia ~II Law it is possible 10:
"wist in the .......tIop or pan:e!s,(acililate sale or porccIs by casil>g !be negative laX
ConJequcoccs 10 propert)' """"'" resulting from tile salc or proper!)', ond p«l".nde tax
womenl fiJllllcing 10 assist in financing !be Rdovcloprnent or 1M Cen.er.
L If you ...... able 10 sell your propett)' under Ibese provlsioos, would yoo be
~ in sellini'
Yes
. b. I. )'OIlI' opinlon. is • Redcvclopment Project Ala is oecessary 10 rejuvenate ~
MidtDWII Shopping Cenlet'!
__ Yes, bccause~ ________________ _
__ No.bccause ___________________________ __
17. Wbat condition" if any, """,ld pn:clude tile sale of your propeny? _________ _
.PAGE 5
i
·' , ~ ---.~.~ Sc};':;:. ,;"'.'." ":"',.,' ,,-;,' ~":",,<"-.';?;~;O~.::''',,,~~c''~;;'c
, :' ;(-~ ~"J:'~~:';~.-,,-,
IS. W11119Ians do you ha"" for your property(>eS)1 (P'.-e check an ~ \IIaI apply
~~ .
a. . InIeM 10 retaiII o1tlllefShip for !he 100, torm (JO+ years), '
11. --Int=>cllO Ie!ain for !he near 10 mid t.<rm (Z·10 yoan),
Co = Would lila: 10 !ell in Ihe near torm (1·2 yean).
eI. ___ ' Intend 10 upgnocIe and rel<:nanL
Co InIaldIO teep exisIini !manU,
1. = Would lila: II> joint """tun v.!h oIbet J>roi>OIIJ awn= and pa!1lcipa~
in IC:IlO\'IIlD& !he Sboppin. Cent«.
19. 1i)'Oll marked "c -would lila: 10 sell" for !he q,UOSIioG aboYe, pi ..... cbect any of !he
follmvini IIIiJeJ1lCn1S !bat apply 10)'011. (As 06di1iooal1iOmp!ate is at!acJte.l at !he e<ld
of !be survey for oddiDoo'.a1 properties.)
L [rcalion of property \IIaI y<>u-d lila: 10 sen,
1>. You an: aW;cly ma:hting Ihe property.
c, Askin& Sales P1i~
•• Pola:imaI buy= have expressed an inlmSl in !be property.
e. Inlereot has l>eca minimal1>ccause: • _""-__ CodcfZOl!ini RqIIimna>!S, JUC1I as p;uldng requirommls ,._
prohibit lane! .... inlal.Sificalion.
___ Undesirability of en1ite sboppin. =ttr.
___ ~ recessionIpoor business c1imale.
~---~,~--~~~--~~-----------------f. YOII "'" not actively marl<e!ing Ihe property because:
__ You .... waitinS f<x !he rcalcstaJe marC! 10 improve.
___ Tax law con&ideratioos make it .mecooomical for y<>u 10 sen y<>ur
property(lCS) •
. ~----------------------~---------
20. J()'OII marked "d -inlenc! II> upgrade" or "f • w<>uJd like joinJ ven~~" in IS, lhc8 pk:ase sIlaIe your plans in brief: _______________ __
21. Other Commmts:
TIIanl )'011 lOt participating in this effort II> develop. straregy for WlIwizing !he MidlOwn
SlIojiping Ccnw,
PAGE'
. '
"'-.
," ... -::-',,"--
-~=.~~
.-. -
Adcfit!onallemplale for 19
Additional popertics 0Ial you would Iilce 10 sell;
I.
2.
3.
L
... __ You ore actively marlcetina the~.
c. A!Itina Sales Price _
d. __ " Pcrelltial lIo;-etS have expressed an inlcRsl in the property.
•. Interest lias beoa minimal because:
C<>cIefZOlli"l requirements, suclo is parkio, requirement!! ",hk:h prohibit
--land _ intensific:ation.
__ UD4esirobiliJy of .n!ire shopping center.
__ GcncnI =essionIpoor busin .... cfimale.
~------------------------
a. l.oca!ioo of property thai you'd Iilce 10 sen.
II. ___ You lIe actively marke!in, the property.
c. A!Jdng Sales Price
d. ____ Pcrelltial IIlI)Ien have expressed :ut inlerest in the propeny.
L Inferesl lias beeIi minimall>ecaux,
__ CocleImning requirements, sucII as parking mruirements whicll probilIiI
land _ inJ.en5itkaliaft.
a.
___ UocIesinl>ilit)" of en:iIe shopping a:n~.
__ GcncnI =essionTpoor busioess dima!e.
~--------------------------
l.oca!ioo 0{ property 1I1al you'd like 10 sen.
10. __ . You an actively marlceting Ill. property.
c. Aikin: Sales Price
•. __ PoIcn£i.al buy<:n bay. expre>Sed an interesl in the property.
L InIereSl lw beta minimal because:
__ C.odc!mning requirements, suc!>. as parkiog requiremer.ts ",hick probibil
land use inlensificaJion.
__ Undesirabilily of entire shqpping center. _
__ 0eneriJ =ession!poor busi."leSS climate.
~--------------------------------
PAGE!
.,"--:;-".-.
MmCHA.~ SIJRVEY
MJDTOWN SHOPPING CENTER
Gtyof Palo Alto
qr,a,rfhCity~
PALOALTO,CA ____________________________________ ___
ne CiIJ of Palo Alto i.s =lIy lIIIdying IlIe l>tidlOWlt Shopping Cen~ 10 id.:ntif}' a strategy
for JeViIaIimli Ihe Ccnfes. ne·MidtD'w Merchanu' AS!OCiation as ",ell as tbe Resident!'
.. pocjarjon and MidlDv.'lI pmpc:I1y owners are participating ill Ill;' Rudy efl'on.
, TIle CiIJ "",Jld In'"lI1 app=iaIIo your IaldnC !he lime 10 complete Ihi.s """"y, ,.,lUCh has been
deveIopcd ID provide !he CiIJ wid! an I1l!denlanding of merchants' dIougbts and c:onccms .
ftJUdiI>& \be ~ Cenll:i. AlIlDdlYldualsurny I espouses sbaII remain confidential
Your input is c:rucW 10 Ihi.s ilWdy dfort. as only lWith tlle joint coopera!ioc! of property <>'O'JlCD,
tesidatls, mcn:hantJ and !be City alii an eff<dl.. stratei)' fOe tbc Midtoo... Cen!et be
de>doped.
I. Name:
2. ""sines, Name:
3. Business Address:
4. Your Rda60nship 10 1I1e Bwi.oess: ' _______________ _
S, Does tbc __ of Ihe business ""'" c< lease tbe shop space1
_,_,_Yes No
7. Does the owner of the business reside in Pal" A!to1
Yes
L Sq~ feet of space (approx):
1>. Ground 0< 2nd floor:
~, Moolhly ren!al .. Ie:
d. t.ca.. start elate:
Co t.ca.. expiration elate:
f. 0pIi00s:
l7l13'lOOO1.OOl
P..o.bl0250
.Palo Abo C'" a .. m
41.5. 329. 25h3
ru.l28 363lflDl
, .
9a. What are )"JIll1IKJp bouco'
WectaJ'S ___ _ Wcek.eMs ___ _
.: Ate )'011 opea lDy evenings (after 6:00 1>. m.)? If Ia. "ba: night _____ _
Co Wballs IlJe bwiesllime of II>< ~ fcc fO<It sh<lS>?
Weeb!aJ'S ___ _
Weeb!ays ___ _
__ lilliUBI)' 10 March
_ :uIy '" September
Wo..-ursm arA
Wedenc!$ ___ _
W""kerKb ___ _
Poopr. wile ;N .... """"""'"'"' <OllUDUniti<o 0
r.......,.e<:realk>nal >i.sito<s wile five OIIIsl<l. 01.,...
0Ihe<.1jJCClf)r _____ _
17173\000 1.001
100'1
2
II. III WIt cqrap/Ii<: I1'CI do your =wmers mide?
WIiIrilI IJ2 miie c( rJ;e """Icc ••
W'tdUn I mile oldie COIIIcc.
" BreaJ:doo,w
(Q -!OO,)
Within die I1'CI bounded by Embarcadero. 101 Fwy, San A."llooio Road,
and die EI Camino.
F:om Ihc baIaDce 01 Palo Alto.
Beyond Palo AlII>.
A:e:
IJndc.< 2S.
2S 10 ».
lS 10 60.
Ovcr60.
TDIaI
TDIaI
B. Household Iype:
SinJles
Young CamiIics
Families wiel; growina chiIdre!I (living at borne)
Empl)' nesters or reIirees (kids IlOI living at home)
0Iber. opecify __ _
TDIaI
17173\0001.001
" IIreakdows Q-UX)")
100"
" JlIeakdow (Q -100")
100"
100"
,. .'. ---... - -',,' .. ~ ~t_-~;. ' .. ~-.. ~ .
,~, ~
13. Us! !he !I!roe most likely '"""""" 0llSI0mer. rome 10 your sIIcp. (I· -most Elcdy)
I. _'_ CIooo 10 lJIOIher store at wbic~ !hey s!>op
If 10. wbiclI one(.)~ ____ ~ _____ ,__-----
2. Your store is Ihe only OIIC 10 offer Ill. productiseMce they ,.,.,.,
J. --:;. Coovcni= ( •. , .• close 10 bome ... oor'~. ttavd routes)
4. __ Good qualily 0( servicelprodU<:1
S. __ Good VL'uelprice
6. _ 0dIcr ......,.,., specify ________ -'-__ '--__
14. Bow do you most rnquen!!y adver1lJc:?
I. __ Newspapers. name:: ______________ _
2. __ 1'1yen
3. __ . Yellow Pas" 4. __ 0dIcr.~ ___________________ _
_ So ___ Don't adver1lJc:
IS. Ate you a member of !he Merchants A.ssociatior.?
Y .. No
16. WbaI do you see as Ihe priority of responsibilities of !he MetclIants AssociaJioo in your
""'" (1 = most important, S = IeasI important)
I. __ Orpnizc special event! (i .•.• 5IleeI fai .... fesIivals, etc·)
2. __ Marketing and advenising
-3. __ Coor!!inare shop I!Ows
4. Provide IeChnkaI assislanoe 10 small b"';ness
S. = 0dIcr. specify ______ -________ -'---
17. ,,\Ilia! do you see as your primary bllSinesJ compe1i!ioo! (Chock all !hat apply)
L ___ AnoIber ston: at MKltown. identify b: __ 0dIcr neighbomood cent<ts in Palo Alto. identify _____ _
c. __ 0dIcr Palo AllO location,. identify .-:-_-::-_-,:-_---:-__ _
d. Locations beyoDd Palo Alto (iDol.ding clobst<>r .. ), idcntify ______________ ~ __________ _
IS. Bow long lias this basines! beal 3!!he above address' __ yoa.-s; __ mooch.
-
19. Hao your cuSWmer base changed since y"" fin! opened?
__ ND
__ Y ... l!IO. _? __ ~ ______________ _
-1717310001.001
•
~~r-...
:-~-'., . . ,~,-;~~~,!~~~--":: :': ,.::--:~:
20. Since you lave beeR bere. have ",tail rents:
__ Inawecr! If so, wba! " __ __
__ DccRued? If so. ",bat " __ _
Rtmained !he same?
21. Sin<:e you lave beeR bere, would you say !bat business !w
I. __ Improved ......-0111
2. Doclinod'!
3. RemainecI!he same?
22. Since you bave beeR bere. bow Iw the area "",,"god? (Cbeck an tIL>l apply)
__ M<><e people moving in
. _<~J"~
__ Increased competitioo; name of COOIpetitive c .... storoSshopping <enters __
__ New bu$nesscs bave come midlOWlI. Please specify: _______ _
_ Key businesses bave left mfdlOwa. suel! as _~ _________ _
__ ~ln>~: ___________ ~ ________________ __
23. 'l>Ilw do you Ihint is !he major =son(s) that businessa left? (Cbeck an that apply)
__ RecessiorI!pOOr business conditioos
__ Zoning =tric:Dons
__ Poor Io<:alion within !he slIopping center
__ SiWdimensionJ of builOlngs ... ere unSllHable for relal1 use
__ Amount of parking i. inadequate
___ I.«ati<Jo of parking is inconver.ient
___ Higll rents
___ Ownen bav. retired
-~, specify---------
24. In order of pr'.ority. wbat do yoo think are the five major problems in this commercial
.".,7 (1 = most serious, S = IeasI serious)
____ Competition from ()('ier .,... '" shopping center.
__ Insufficient pamfig
___ In<:onvenienl locatioo of parking
__ Not enough Soot Ilaffic
___ Oo.-er.all unattractiveness of shopping cenler
Traffic conditioos 011 "fiddlefieJd
1717310001.001
. ......,~ ....... ---.,
-.
5
;--, .
..
__ NO! enougil advcr:fsing
__ Jnadeq,uacy 0( ancI'ooc cenants _ Ocher, specify ________________ --'-'-_
2S. III onIct 0( prlori!y, : .. bat five IN,jor ~acUvities """,Id yOll ~ 10 """ initiatm
by 1he ~ 10 belp ~ busineu ;" Ihe ana? (l = IOOSt UnpOOant. S = least
imponant)
__ Podcs!rian improvements
__ Street signage
__ SignaJi",tim improvements OQ M"Klc!lefield
__ t.ndy;apingfstreet be:aulificalion
____ and parking l<lt lighting
__ Zoaing and building tegulatioos
__ Street deaningfmain~
__ Other, specify _____ -'-_________ _
26. RarJe 1M level 0( impo<tan<:e 0( 1M five major ousting attractions Midtown possesses?
(I = mosI impo!1ard, S = IeasI important)
__ Sense 0( communily/neighborllood
__ COOveni .....
__ LocaIion wilhlll Palo Alto
__ ExisIinJ busin IUclo .. :: _________________ _
__ Otber,specify ______________________ _
n. Wb3l new I!se5 would you hu \0 ..., added 10 1he area? (Cbeck all Il>aI apply and
• specify _ possible)
__ Specialty Retail (e.s., &ill "'lops, stationary stores, I!orists, eleclronlcs) .
__ Apparel and ~ SIOfeS
_. _ Antiques
__ SpcciaII)' Food (e.,., produce or fish market, wine and cheese .oops, delis)
]te.IaUIlIJItS
Fas! Food = Other Specially Retail Shops, Specify ___________ _
__ MecfH21 Om"es
__ l'cr3onal Service Co.,., SeaUly Saloo, Barber Shop, ell::.)
BankslF1lWlCiaI Ser.icesIOffices
Movie Theata1 = 0Iber Non-Retail SIores. Specify ____________ _
__ Supmnarkots
__ Drug Stores
__ U<!uoc
__ Hardw=
__ Other Coovonience Stores, Specify -'-___________ _
__ AI! O!ber, Specify ______ -,-_________ _
. . 17113\000 1.001
'.-.'
.-, "--.-
•
28. WIllI changa, if any. do you believe are Eece£SiI!)' in ordu fur yoor business and 1Ile
$boppinl Center 10 be JUC:<:eSSM. Please india.~ your cipinlcn> by marking:
1 -Very impo<tanl 2 = Imponant 3 -Unimportant
L __ Minor pIl)'licaI fa::ade impfOl/cmcnts.
b. __ E.l:I<:n';vo pIlysiCal improvements 10 1Ile entire ""n~. indudin,:
Automobile circuIalioo = Mdiliooal pa.-king.
__ Loca:ioc of parking.
__ BWlding oonfigw;1!ion and layouts.
__ OvoralIli&l>tin&.
__ BuildiD, siEnage.
c. __ " The lease-up ol vacanJ stOreS.
II. __ ltdocatioo of your b"siness 10 • more p.-ominenl 1oca6oa wilhiD !he
Crnler.
e. " __ lIroadeoting !he le!l21lt mill offered at Midt"..III.
r. __ Enlargin& and IIlOdemizi1Ig tru: anchor tenants ol the Center.
I. The JemOV2l ol some struCtures; such os:
.. --NoDe ire ""'"""'"
_ inlerioclexlerior of ston! = Add more employ ... __ Renew Ie= cpon expiration.
__ E.I:pandf move III • !arBor space will-ill> Mi<ItoW1l.
ReIoc:aIe to aulsilk of Midto"",
If so, ",bore' -:-__ -:-::-,~----------------
__ Close the ~go out ol business
__ Nocbange
__ Unsure; cooMering _________________ _
__ Other, Specify _______________ _
30. How far in advance of your Ie&se e<pira6oa da~ v.iJJ yoo make your busineo. plans?
32. Other comments: "
Thank you for participating in this effOrt 10 develop I strategy far revi<alizin& Ill. Midtoll'D
" $bopping eenl«.
17113\000 LOO 1 1