I try to stay out of the more controversial topics; it never seems like a fair fight on social media boards. It must be something to do with the fact people anonymously blurt opinions, substantiated or not. There is more validity to a stance made in person. Perhaps it’s seeing the conviction in someone’s beliefs or the fact they will be held accountable to the argument and supporting factors. That said, I will tread lightly into murky waters…
This whole blocking of Walmart Neighborhood Market is complete crap. There I said it. And boy, does it feel great to put that out there. Now that I am waste deep, you are probably already cursing me as a labor-union-hating, small-business-killing, idiot real estate broker. But hear out a few notes.
It Ain’t Easy To Back fill 30,000 Square Feet
Or 50,000 square feet in the case of San Ramon. Do you think Walmart Grocery was the first choice for any of these landlords? Absolutely not. Both the Pleasanton and San Ramon sites sat vacant for two or more years before this deal came along. Us real estate folks work for commission only, do you think we twiddle our thumbs waiting for a 30,000 square foot deal (think large commi$$ion) to fall in our lap? How long do you think a landlord can stare at a vacant box before the bank account begins to hit red?
If any of you own a rental property you should be able to relate. You estimate and give yourself a cushion for vacancy factor, but what happens when you double or triple that projected vacancy factor? Subsequent to losing an anchor, we often see the smaller retail spaces in the center rent for 25% less than before, the sales and traffic to the existing businesses slows, and vacancy rates go up.
Let’s get back to finding a new anchor for a very large space in a neighborhood type setting. There are at least two very motivated people in picture, a broker and a landlord, talking to anyone and everyone that could potentially fill the space or will even listen for that matter. The problem is, there are only a handful of potential users for this size range and even less that will consider the location.
The commercial real estate market is still contracted and tenants have their choice of properties. Our area is very developed and established. Prospective tenants are looking at a number of factors including proximity of other stores, competition, does the demographics meet their model, traffic counts, parking, and does the structure of the building even work? Now consider most companies are either still disposing of under-performing locations or in a no-growth state.
After months, or years in this case, the big box is still empty. No takers. Then Walmart comes along…
Fact of the matter, the property is zoned for a grocery store. The City can stall as long as they want but at this point (and I am no attorney) they cannot NOT allow Walmart just because it’s Walmart. Unless the zoning standard is rewritten to make grocery a conditional use, grocery is an approved use at this location. If this was a new development or location that had restrictions on grocery stores (as is the case in downtown Livermore) then the City would have all rights to block Walmart Neighborhood Market. But that is not the case at all, we are talking about an existing retail center, where a grocery store was in place and is an allowed use.The Walmart attorneys must be drooling over the current scenario.
Objectively, I get the hatred of Walmart. They are anti-labor unions, the unfair treatment of employees, they steal business from mom and pops, so on and so forth. If you detest the business, then you have a right to not shop there. You also have the right to not be an employee, and you have the right to spend your money at the local level. The folks who do shop at these markets are most likely not the same person going to Lunardi’s for Organic Boneless Skinless Chicken Breast. Vice versa, the person who buys the $30 shampoo at their local salon isn’t going to start buying Sauve Shampoo just because Walmart opened down the road. I know I will continue to support my local based businesses and my shopping and spending habits will not change with the addition of Walmart Grocery. But that doesn’t mean your neighbor or a struggling family (yep, those exist) won’t. Times are still tough and people are cutting costs wherever they can, this is why Walmart continues to thrive and make money when many companies are still going bankrupt.
Walmart has deep pockets and even if the store struggles, they will be directly injecting money into our community. They pay rent to the local landlord, they provide a much needed tax revenue to the City, they attract new business to the shopping center, and can increase the rents in the surrounding retail projects. My next question, what Mom and Pop grocery stores exist in our community? Safeway has already destroyed the local owned markets. I also heard an argument that home values will decrease with the addition of Walmart. Do you know what depresses housing values? Vacancy and failing schools! Whether it is the vacant house next door or a large shopping center vacancy, vacancies give an impression of a struggling neighborhood. Furthermore, just two months ago the Pleasanton school board cut 70 jobs and $5.3 million from the budget. How’s that tax revenue sounding now?
Before the molotov cocktails are hurled at my home and office, let me clarify. I am not saying Walmart is the best shopping alternative to Nob Hill, but the only thing worse is vacant box.