Online Extra: Political Notes: Accusations fly over Trader Joe's Castro pullout

  • by Matthew S. Bajko
  • Tuesday March 15, 2011
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Trader Joe's decision to abandon a Castro store site has not only left the fate of a large Market Street retail center in doubt, it has also created hard feelings in the city's LGBT community over who is to blame for the reversal by the national grocery chain, which has spent years trying to locate a store in San Francisco's gayborhood.

 The real estate agent for the property owner and members of a Facebook group created in support of Trader Joe's have lashed out at the Duboce Triangle Neighborhood Association, calling the residential group NIMBYs and the key culprit behind the surprise news, which the Bay Area Reporter broke on its website Monday, March 7, that the grocer was walking away from its latest proposal to open a Castro store.

Leaders of DTNA and other Castro residents, in turn, say it was Trader Joe's obstinacy and refusal to adequately address the parking and traffic issues opening a store at the center, located near the intersection of Market and Noe streets, would create that ultimately caused the store plans to collapse.

Caught in the middle is the property owner, Kent Jeffrey , whose family has owned the two-story building housing stores, offices, and a rooftop parking garage for decades. The center lost its main tenant, Tower Records, in December 2006, and Jeffrey has struggled ever since to move a new business into the space.

Ironically, Jeffrey at first had said he did not want to pursue Trader Joe's as a tenant due to the outcry its proposal to open at a nearby site had caused the year prior. But after negotiations with the San Francisco AIDS Foundation and several businesses interested in the location failed, Jeffrey relented and entered into negotiations with the Monrovia, California-based grocer.

Jeffrey did not respond to the B.A.R. 's request for comment last week. Instead, his Realtor, Doug Baird, called and criticized DTNA for how it treated Trader Joe's management. Baird complained that the neighborhood group was able to sway Planning Department staff to impose numerous conditions on Trader Joe's in order for it to receive approval for the Castro location, which would have been its fourth in the city.

"DTNA is the man behind the curtain. They are calling the shots," said Baird. "This is a tragedy in my mind. Trader Joe's said 'No mas.' There comes a point where any entity will say you are squeezing too hard."

Gary Virginia, who created a Facebook page to rally support behind Trader Joe's, also criticized DTNA last week in a posting on the social networking site.

"I feel strongly that DTNA Pres. Dennis Richards , Peter Cohen and other members are largely responsible for working behind the scenes for the last two years with SF City Planning to kill this project," wrote Virginia.

He added that unless others in the community speak up, DTNA will continue to exert undue influence on the Planning Department. And he raised doubts about the ability to win support for any retailer to move into the shopping center.

"But I feel that any potential tenant is going to face DTNA and their political posturing that they represent the 'opinion of the entire neighborhood.' What tenant wants to move into a neighborhood when they are dealt with in the way that TJs has been by DTNA?" wrote Virginia. "Unless folks like us organize and voice our concerns to the potential tenant and landlord, to City Planning, and to our elected officials, there may never be a tenant at Market and Noe Center."

DTNA's Richards called the accusations against his group "insulting" not only to the members but also to city planners.

"To think that two guys can compromise the integrity and professionalism of our Planning Department is ridiculous," said Richards, whose group held a public meeting with Trader Joe's officials on Valentine's Day to discuss the store proposal. "It is beyond credible to make that accusation. It is fantasy and it is sour grapes."

The main problem with Trader Joe's application for the site, said Richards, was that it never truly addressed people's concerns about the number of vehicles it would attract and the resulting traffic congestion and pedestrian safety impacts.

"They are a formula retailer. They had a formula and they wouldn't change the formula," said Richards. "We thought we could sit down with Trader Joe's to make it work and they refused to do that. The misery on this project for everyone involved is very high."

Unlike Whole Foods, which agreed to a number of concessions in order to win approval for a store further north on Market Street, Trader Joe's apparently balked when pressed by city planners to agree to similar conditions.

According to a letter Planning Director John Rahaim sent to Trader Joe's management February 22, he informed the grocery chain that in order to mitigate its impacts on the Castro neighborhood it should pay to upgrade the intersection at Market and Noe streets to make it more pedestrian friendly, at a cost of upwards of $600,000; hire a delivery/shuttle operator to reduce car trips to the Castro store; and employ parking control officers to stop customers from queuing up to enter the parking lot.

He also suggested Trader Joe's conduct a "basket study," which would look at how it would impact nearby stores.

In the end the company decided to walk away from the site, the second time its pursuit of a Castro store went nowhere. Prior to seeking the old Tower Records space, Trader Joe's had proposed building a store where the Chase Bank now sits at Market and Sanchez streets. But parking concerns derailed the plan.

District 8 Supervisor Scott Wiener declined to place blame on anyone for Trader Joe's decision. He said while supporters and detractors of the grocery chain had the right to voice their opinions, the company also had the right to decide to walk away.

"I don't think this is a blame situation. Trader Joe's made the decision the site wasn't going to work," he said. "I am very disappointed by that decision. I also understand Trader Joe's has a certain business model that relies on cars and they didn't want to change that business model. I respect their business decision around this issue."

He also noted that other issues beyond parking had presented problems for Trader Joe's moving into the building. At first the company talked of taking over both the ground floor and second story spaces but had rejected doing so because of the cost.

Then they sought the entire ground floor, including spaces housing other businesses. But Radio Shack balked at exiting its lease early and played hardball in negotiations with Jeffrey over moving to an empty storefront across the street. The unexpected death last spring of Brad Villers, who owned a greeting card shop in the complex, further complicated the situation as his estate ended up in probate court.

With Trader Joe's now out of the picture, Wiener said it might be easier to find tenants interested in the various storefronts available. He has pledged to work with Jeffrey in finding retailers for the site that will work.

Already he has reached out to location scouts for both Fresh and Easy and Grocery Outlet to see if they would be interested in the space.

"I know Fresh and Easy has a model that is much less car focused and more about frequent trips with smaller amounts of groceries," said Wiener.

Castro residents continue to push to see a new gym open there. And last year a person looking to open a cabaret had inquired about the second floor storefront.

Pets Unlimited, a 24-hour veterinary center that also runs a shelter and adoption program, is said to be interested in the site. There are no veterinarians currently located in the Castro, which is home to numerous households with pets.

Goodwill, which does not pay rent, is likely to remain in the street-level storefront a while longer. 

"I think we are going to be able to come together and make sure something goes in there," said Wiener, who would not venture to guess how long before a new tenant is announced. "I have no idea how long it will take. I just know I will continue to be very engaged, working with Kent to support him in whichever way I can so that we get a good use into that space."

But Baird expressed doubts that any retailer would want to move into the shopping center due to what happened with Trader Joe's.

"It is a tainted property now. There is no other way to repackage it," said Baird. "The risk of the owner losing the property is enormous."

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Got a tip on LGBT politics? Call Matthew S. Bajko at (415) 861-5019 or e-mail [email protected].