Can Safeway expand into Rite Aid space?
Also, big news about Calicraft Brewing Co., Mabel’s Market, Wildhorse Golf Club, Yuchan Shokudo, Kitchen428, Mojo’s Lounge and MOD Pizza in this week’s newsletter
→ Larger Safeway on the way? To help fill some of the vacant storefronts in town, the Davis Planning Commission on Wednesday moved a step closer toward loosening some of the size restrictions placed on neighborhood shopping center tenants. Instead of fixed rules on a grocery store’s size, for example, it would allow applicants to submit building permits for ones larger than Davis’ 40,000-square-foot limit.
The ordinance still needs review by the City Council, which could take several weeks.
The request came at the urging of Regency Centers, the owner and operator of Oakshade Town Center on Cowell Boulevard in South Davis. The center has two of the largest vacancies in Davis, after the closure of OfficeMax (21,000 square feet) and Rite Aid (17,500 square feet). See its site plan here.
At the Planning Commission meeting Wednesday night, Jenny Hess, who handles leasing for Regency Centers, told the commission: “We do have active negotiations in progress that would solve for both of these available spaces, and they would be both exciting and beneficial to the community.”
However, to make that happen, the zoning rules would need wiggle room. She said Safeway, which is 40,000 square feet, is interested in expanding into the former Rite Aid space, for a combined 57,500 square feet. The grocer would add a pharmacy and keep the drive-thru pickup window.
Hess did not mention prospective tenants for the old OfficeMax space or the restaurant spot last occupied by Common Grounds Coffee.
City staff members recommended the changes, which would apply to other parts of town, and help make Davis more attractive to prospective retail tenants. Economic Development Director Katie Yancey called Davis’ commercial vacancy rate “astronomically high.”
For neighborhood centers like Oakshade, the city vacancy rate is 8.6 percent in the last 12 months, Yancey told commissioners. For comparison, the Sacramento region has a vacancy rate of 7% and the U.S. is 5.8%. Davis vacancy rates for smaller strip malls – ones with 10,000 square feet or less – are even higher, at 17.4%, compared to 7.7% regionally and 6.1% nationally.
The 40,000-square-foot limit on grocery stores has been in place since the 1990s. Principal Planner Dara Dungworth said the rule was intended to create smaller, localized commercial centers rather than larger, regional ones – and possibly to protect the downtown.
But there’s been a lot of change in the way people shop in the last 30 years. “We’re trying to bring things into the current market,” Dungworth said, and “create occupancy opportunities.”
Yancey said there’s a huge amount of empty space in neighborhood shopping centers. “We need to look at opportunities to eliminate barriers so we are more in line with the region.”
The ordinance is not meant to be a blanket one for all commercial property. It focuses on commercial shopping centers, Dungworth said. However, if the ordinance goes through as written, it would eliminate the size limit on food stores. Stay tuned.