News

Another market bites the dust at College Terrace Centre

Family business Khoury's Market was hampered by unending construction activity, owner says

After just one year in business, Khoury's Market at Palo Alto's College Terrace Centre plans to close, the second grocer at 501 Oxford Ave. to shutter in two years.

A previous store, College Terrace Market, closed in late December 2017 after only about six months in business.

The Khourys took over the spot in January 2019 after the space had been vacant for a year. In a recent, undated letter that announced the planned closure to customers, co-owner Chris Khoury said the business has been challenged by several months of scaffolding and fencing around the store for construction work around other parts of the building.

A dark shroud of black netting covers the front of the building. Colorful signs of fruits and vegetables on the side of the store are obscured.

"This gives the impression that the store is not open for business and also covers the windows, resulting in a lack of natural light within the store. Construction vehicles have been parked around the building constantly," Chris Khoury wrote.

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The Khourys' letter does not specify a closing date. On Friday, a sign in the window announced the store's closure, and prices were 30% off.

A grocery store is a requirement at College Terrace Centre: In 2009, the Palo Alto City Council approved a more dense redevelopment and zoning changes in exchange for the developer's provision of the 8,000-square-foot space for a grocery store.

Without a functioning market, the property is considered to be in violation of its "planned community" zoning and is subject to fines of more than $2,000 per day until a new grocery begins its operation. The ordinance allows the city to begin issuing fines to the owner if the market space has been vacant for six months. The six-month grace period cannot exceed six cumulative months in any five-year period.

Owners of both Khoury's and College Terrace Market cited long delays with getting the necessary signage to give their businesses visibility. The market has also had numerous difficulties with the elevator — the sole access point to the store from the underground parking garage — and proper signage directing customers to the garage entrance has not been installed. The business was unable to overcome the obstacles, said Khoury, whose family runs other grocery stores in the Bay Area.

The city of Palo Alto's building and planning database indicates a host of permit requests since the Khourys moved in, which started with minor remodels and plans to replace the storefront in March 2019. In August, there was a permit request for signage at the market and a parking-directions sign. A separate August permit requested approval for exterior glazing. All were approved. In November, the owner's contractors received permits for new exterior paint.

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"All of this makes it difficult for our customers to enter the market and enjoy our services," Khoury wrote. "Since we opened for business, we have worked hard to provide our customers with a gourmet shopping experience while maintaining a family-market atmosphere that allows us to understand and best serve the wants and needs of our neighborhood. We have sought to build relationships with and understand our customers in order to provide both the daily and specialty items needed to nourish our community."

After the College Terrace Centre construction was completed in 2016, the developer chose The Grocery Men 1 LLC investors to lease the site as College Terrace Market. New York-based Greystone Property Development then took over ownership and development of the complex.

Blox Ventures, a firm owned by local developer Jason Oberman, bought the blocklong development in July 2018 for $78.5 million. He brought the Khourys in to establish a market.

Khoury said the owner had wanted to repaint the building to distinguish it from First Republic Bank, which occupies the office space above the market and in an adjacent building. The work began in July and was supposed to take a month, but has stretched into seven months.

"We never even got to have a grand opening. We had a soft opening, but we were going to have a grand opening in September when classes started at the university and the landlord promised the work would be done by then.

"They were going to put a patio in for us and get our signs up. They changed the windows. That took a few months," he said.

He didn't doubt they could be successful at the new store if not for the construction. The Khourys have had loyal customers dating to when they took over JJ&F Market in 2011. They saw advantages in their proximity to Stanford University. (Their other store is situated near San Francisco State University.) They hoped to get a license to serve beer with lunches at an outdoor patio and to have other customer attractions, offering conveniences for people who don't want to cross El Camino Real.

"We were going to have kombucha on tap and we were going to do a cafe," he said, adding they planned to partner with a coffee vendor to offer an alternative to Starbucks.

"The construction killed us. Even the people upstairs (at the bank) said 'We thought you guys closed two months ago,'" Khoury said.

Neither Oberman nor his attorney have responded to the Khourys when they tried to contact them, he said. "We've had no contact. They haven't given us any information — not even to our lawyers," he said.

Recently, painters have started work on the back of the building, which Khoury said sparked his curiosity. If the owner wanted to keep them there, why not start at the front of the building so the store can be unburdened by the netting and scaffolding? he asked.

"I feel like they are doing it on purpose," he said.

The co-owner said he is perplexed and disappointed by the situation. Oberman came to their father, Jalil, also known as "Papa Joe," at their San Francisco store, and asked them to open in Palo Alto.

"I love Palo Alto. Mark and I drive down here from Sonoma every day. It's our baby — it's our living. We're not just some rich people taking over a store. We can't even pay our (personal) bills now because we have to pay for the store. Thankfully, I have some savings, but I should be using that for my retirement," Chris Khoury said.

The San Francisco store can't support all five siblings working there and "Papa Joe" has 22 grandchildren. "We have to support our families," he said.

Khoury said he has three children ages 6 and younger. He has a degree in business administration and would look elsewhere for work to support his family. His brother, Mark, who also worked at the store, has four elementary through high school aged children.

"My 6-year-old daughter has been asking me to take her to Disneyland since she was 3 years old. I can't do that, but hopefully, someday I can," he said.

He is disappointed and will miss the many friends they have made in Palo Alto.

"We're just thankful for what we had and what we have," he said.

Oberman and his attorney have not responded to requests for comment from the Weekly.

"While the City cannot comment on legal matters, we are disappointed to hear about the potential closure of Khoury Market," city spokeswoman Meghan Horrigan-Taylor said in an email to the Weekly. "City staff is reaching out to the parties to better understand the situation and will determine next steps once additional details are available."

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Another market bites the dust at College Terrace Centre

Family business Khoury's Market was hampered by unending construction activity, owner says

by / Palo Alto Weekly

Uploaded: Sat, Jan 4, 2020, 9:04 am
Updated: Wed, Jan 8, 2020, 12:17 pm

After just one year in business, Khoury's Market at Palo Alto's College Terrace Centre plans to close, the second grocer at 501 Oxford Ave. to shutter in two years.

A previous store, College Terrace Market, closed in late December 2017 after only about six months in business.

The Khourys took over the spot in January 2019 after the space had been vacant for a year. In a recent, undated letter that announced the planned closure to customers, co-owner Chris Khoury said the business has been challenged by several months of scaffolding and fencing around the store for construction work around other parts of the building.

A dark shroud of black netting covers the front of the building. Colorful signs of fruits and vegetables on the side of the store are obscured.

"This gives the impression that the store is not open for business and also covers the windows, resulting in a lack of natural light within the store. Construction vehicles have been parked around the building constantly," Chris Khoury wrote.

The Khourys' letter does not specify a closing date. On Friday, a sign in the window announced the store's closure, and prices were 30% off.

A grocery store is a requirement at College Terrace Centre: In 2009, the Palo Alto City Council approved a more dense redevelopment and zoning changes in exchange for the developer's provision of the 8,000-square-foot space for a grocery store.

Without a functioning market, the property is considered to be in violation of its "planned community" zoning and is subject to fines of more than $2,000 per day until a new grocery begins its operation. The ordinance allows the city to begin issuing fines to the owner if the market space has been vacant for six months. The six-month grace period cannot exceed six cumulative months in any five-year period.

Owners of both Khoury's and College Terrace Market cited long delays with getting the necessary signage to give their businesses visibility. The market has also had numerous difficulties with the elevator — the sole access point to the store from the underground parking garage — and proper signage directing customers to the garage entrance has not been installed. The business was unable to overcome the obstacles, said Khoury, whose family runs other grocery stores in the Bay Area.

The city of Palo Alto's building and planning database indicates a host of permit requests since the Khourys moved in, which started with minor remodels and plans to replace the storefront in March 2019. In August, there was a permit request for signage at the market and a parking-directions sign. A separate August permit requested approval for exterior glazing. All were approved. In November, the owner's contractors received permits for new exterior paint.

"All of this makes it difficult for our customers to enter the market and enjoy our services," Khoury wrote. "Since we opened for business, we have worked hard to provide our customers with a gourmet shopping experience while maintaining a family-market atmosphere that allows us to understand and best serve the wants and needs of our neighborhood. We have sought to build relationships with and understand our customers in order to provide both the daily and specialty items needed to nourish our community."

After the College Terrace Centre construction was completed in 2016, the developer chose The Grocery Men 1 LLC investors to lease the site as College Terrace Market. New York-based Greystone Property Development then took over ownership and development of the complex.

Blox Ventures, a firm owned by local developer Jason Oberman, bought the blocklong development in July 2018 for $78.5 million. He brought the Khourys in to establish a market.

Khoury said the owner had wanted to repaint the building to distinguish it from First Republic Bank, which occupies the office space above the market and in an adjacent building. The work began in July and was supposed to take a month, but has stretched into seven months.

"We never even got to have a grand opening. We had a soft opening, but we were going to have a grand opening in September when classes started at the university and the landlord promised the work would be done by then.

"They were going to put a patio in for us and get our signs up. They changed the windows. That took a few months," he said.

He didn't doubt they could be successful at the new store if not for the construction. The Khourys have had loyal customers dating to when they took over JJ&F Market in 2011. They saw advantages in their proximity to Stanford University. (Their other store is situated near San Francisco State University.) They hoped to get a license to serve beer with lunches at an outdoor patio and to have other customer attractions, offering conveniences for people who don't want to cross El Camino Real.

"We were going to have kombucha on tap and we were going to do a cafe," he said, adding they planned to partner with a coffee vendor to offer an alternative to Starbucks.

"The construction killed us. Even the people upstairs (at the bank) said 'We thought you guys closed two months ago,'" Khoury said.

Neither Oberman nor his attorney have responded to the Khourys when they tried to contact them, he said. "We've had no contact. They haven't given us any information — not even to our lawyers," he said.

Recently, painters have started work on the back of the building, which Khoury said sparked his curiosity. If the owner wanted to keep them there, why not start at the front of the building so the store can be unburdened by the netting and scaffolding? he asked.

"I feel like they are doing it on purpose," he said.

The co-owner said he is perplexed and disappointed by the situation. Oberman came to their father, Jalil, also known as "Papa Joe," at their San Francisco store, and asked them to open in Palo Alto.

"I love Palo Alto. Mark and I drive down here from Sonoma every day. It's our baby — it's our living. We're not just some rich people taking over a store. We can't even pay our (personal) bills now because we have to pay for the store. Thankfully, I have some savings, but I should be using that for my retirement," Chris Khoury said.

The San Francisco store can't support all five siblings working there and "Papa Joe" has 22 grandchildren. "We have to support our families," he said.

Khoury said he has three children ages 6 and younger. He has a degree in business administration and would look elsewhere for work to support his family. His brother, Mark, who also worked at the store, has four elementary through high school aged children.

"My 6-year-old daughter has been asking me to take her to Disneyland since she was 3 years old. I can't do that, but hopefully, someday I can," he said.

He is disappointed and will miss the many friends they have made in Palo Alto.

"We're just thankful for what we had and what we have," he said.

Oberman and his attorney have not responded to requests for comment from the Weekly.

"While the City cannot comment on legal matters, we are disappointed to hear about the potential closure of Khoury Market," city spokeswoman Meghan Horrigan-Taylor said in an email to the Weekly. "City staff is reaching out to the parties to better understand the situation and will determine next steps once additional details are available."

Comments

Michael
College Terrace
on Jan 4, 2020 at 9:25 am
Michael , College Terrace
on Jan 4, 2020 at 9:25 am

Yet, JJ &F market was there for over 30 years. Miss that market and it’s employees.


Online Name
Registered user
Embarcadero Oaks/Leland
on Jan 4, 2020 at 10:59 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Jan 4, 2020 at 10:59 am

Shame on the city for allowing this to happen. Start fining the developers $2,000 a DAY now.


Anon
Another Palo Alto neighborhood
on Jan 4, 2020 at 11:43 am
Anon, Another Palo Alto neighborhood
on Jan 4, 2020 at 11:43 am

I would like to see a serious, hours-long special session of the city council to debate and discuss how this went wrong and how to build in legal barriers in the future into any such project, so that this kind of mess just can't happen in the future. The city has tried numerous times now to get this right, but, there isn't any easy way to get it done.

Let's make sure that before any such future project is approved, there is a legally enforceable way to make sure that the commercial side of a mixed-use development is commercially, financially viable.


resident
Midtown
on Jan 4, 2020 at 12:04 pm
resident, Midtown
on Jan 4, 2020 at 12:04 pm

We don't need an expensive limited-selection boutique market in the part of town. When accessibility is a problem, there are lots of other choices in town for customers. Why don't they open an Asian grocery store with a good selection of reasonably priced fresh produce like Nijiya or Ranch 99? There is lots of demand and the nearest competition is miles away near Sunnyvale. Customers will be brave the construction hassles when you are the only store in town.


Only a sucker
Downtown North
on Jan 4, 2020 at 12:28 pm
Only a sucker, Downtown North
on Jan 4, 2020 at 12:28 pm

Online name- seriously???? This is your fault and the neighbors fault. How much shopping did your do there? The city did not need an overpriced small store. In the past jj&f was protected from competition. Those days are gone. Maybe the city is Also to blame with their onerous policies.
Where will we find another sucker to invest their money in a business destined to fail


signage
College Terrace
on Jan 4, 2020 at 12:32 pm
signage, College Terrace
on Jan 4, 2020 at 12:32 pm

Permanent signs for the bank and music school went up immediately, not so for Khoury Market or its predecessor. Sounds like the developer was planning for the market to fail. I agree that the developer should be fined daily as per the agreement.


Only a sucker
Downtown North
on Jan 4, 2020 at 1:05 pm
Only a sucker, Downtown North
on Jan 4, 2020 at 1:05 pm

Since age-group realize that signage has to go through the cities onerous process?
The city decided years ago that the city dues not want large full service stores ( to much traffic, too big, what about small overpriced stores?)
The Council needs to pass a law mandating that residents spend a certain amount of their money at these stores. If they can make legal things illegal in the city (weed, vaping) they can force residents to shop at certain locations.


Barry
Professorville
on Jan 4, 2020 at 1:07 pm
Barry, Professorville
on Jan 4, 2020 at 1:07 pm

Once Trader Joe’s opened less than a mile away, any market in this location is doomed.


Anon6
Downtown North
on Jan 4, 2020 at 1:11 pm
Anon6, Downtown North
on Jan 4, 2020 at 1:11 pm

“Signage” - you are 100% correct. The developer dragged his feet for a year on purpose. He should be fined every penny he owes - he’s not as “Aw shucks” innocent as he plays. I feel bad for the Khourys. They were NOT the problem.


resident
Midtown
on Jan 4, 2020 at 1:13 pm
resident, Midtown
on Jan 4, 2020 at 1:13 pm

Trader Joes' selection of fresh produce, especially Asian-style fruits and vegetables, is really poor. There is lots of opportunity for competition.


Shopper
Registered user
Old Palo Alto
on Jan 4, 2020 at 1:29 pm
Shopper, Old Palo Alto
Registered user
on Jan 4, 2020 at 1:29 pm

I shopped at Khoury regularly. I would not consider them overpriced- certainly nowhere near Mollie Stones around the corner. Their selection of middle eastern and Eastern Europe foods was excellent. I fully believe that issues with signage and construction nets etc was intentional by the land lords. They were trying to prove that a market can’t survive there... with that clause gone they can rent the space out for offices at a much higher rent. Unbelievable and very sad for Palo Alto


Resident
Another Palo Alto neighborhood
on Jan 4, 2020 at 2:06 pm
Resident, Another Palo Alto neighborhood
on Jan 4, 2020 at 2:06 pm

I would put this down to two things.

One accessibility and visibility. The owners seemed to be fighting a losing battle with signage and scaffolding which must have been difficult for any store to overcome.

Two, lifestyle of the local residents who just don't use it. So many people now get the bulk of their foodstuffs online or Costco and just use a local grocery store for incidentals. Unless the local residents were using it, or any grocery store, for 99% of their groceries, then I can't see how a small market can fare well at any location anymore.


rsmithjr
Registered user
Duveneck/St. Francis
on Jan 4, 2020 at 2:11 pm
rsmithjr, Duveneck/St. Francis
Registered user
on Jan 4, 2020 at 2:11 pm

The underlying problem here is the "planned community" ordinance. A developer can propose a project that overrides zoning by promising to provide "benefits" to the community.

In practice, this has meant that interesting but impractical or useless benefits have been proposed and sometimes accepted by the city. We have three neighborhood grocery stores that were built under the PC. All three have had problems; Edgewood is in court right now after the developer refused to honor his commitments.

The biggest problem here is that developers have a strong dis-interest in providing the benefits, and the city doesn't see any way to turn a profit on it and would just as soon ignore the situation. The only reason that the city is pressing the matter at Edgewood is that the community has organized and complained loudly. There are other PC's that have reneged on their benefits and the city has done nothing.

The developers are simply walking all over the city on these issues and the city is not doing its job in vetting or enforcing the PC's.

The things that need to happen here, in my opinion, are:

1. The community needs to demand that the city press the matter and make sure that a store is maintained at the College Terrace location and the builder provides adequate signage and support for the store. The city needs to charge the maximum allowable fees to ensure compliance. We cannot count on the city to do this without "prompting".
2. The city PC ordinance should be seriously modified or repealed.
3. The city should inventory all PC's and bring them all into compliance.


Resident
College Terrace
on Jan 4, 2020 at 2:37 pm
Resident, College Terrace
on Jan 4, 2020 at 2:37 pm

Too bad the city denied the original applicant J&A Family Market just because they didn't want a "Mexican Market" in their town. that all white and uptight city council screwed the applicant and the neighborhood!!!


Online Name
Registered user
Embarcadero Oaks/Leland
on Jan 4, 2020 at 2:46 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Jan 4, 2020 at 2:46 pm

"Online name- seriously????"

Yes, absolutely seriously. The developers promised a grocery store and should be fined until they provide one. They did everything possible to hide and destroy the market and shouldn't be rewarded by putting in more lucrative offices.

They gamed the system just like Sand Hill did with Edgewood and public pressure FINALLY forced the city to start fining them as per the original agreement. Of course now we've got a Sand Hill developer of the Planning & Transportation Commission.


Only a sucker
Downtown North
on Jan 4, 2020 at 2:59 pm
Only a sucker, Downtown North
on Jan 4, 2020 at 2:59 pm

Online name- once again, seriously?????. You Make claims that the developer needs to play by the rules. Well so does the city. The rule says the developer has 6 months to fill the space. So finess do not start now.
IMHO, the store would have succeeded had the neighborhood shopped there. I bet you most shopped elsewhere.
Regarding signage, it states that a permit request was approved after August for signage. Why was none installed? Who was supposed to pay for it?
Bottom line no store will succeed there unless the city subsidizes it or we make it Mandatory for residents to shop there.


JR
Palo Verde
on Jan 4, 2020 at 3:00 pm
JR, Palo Verde
on Jan 4, 2020 at 3:00 pm

If the developer is contractually obliged to have a market open then they need to meet their responsibility. It's irrelevant whether a market is viable at that location or not, if the developer entered into a contract then it needs to be enforced. Enough with developers getting rich by screwing over residents, the city council needs to enforce the contract.


Comedy of Errors
College Terrace
on Jan 4, 2020 at 3:15 pm
Comedy of Errors, College Terrace
on Jan 4, 2020 at 3:15 pm

Isn’t it interesting that everyone wants to jump all over the developer? For starters the original developer doesn’t even own the building. Residents are quick to judge and jump all over something. The real issue is the cheap residents who won’t support the local market. Everyone groans that they must have that grocery store. And of course they won’t support it with their dollars, just their loud mouths.

When a neighborhood group or larger community comes out and aggressively insists there be a grocery store, the council should force the group to subsidize it with a lump sum payment per household for which the residents who groan the loudest would get a dollar for dollar credit at said grocery store. Guaranteed business for grocery store. Neighborhood gets what it screams it always wanted. Problem solved.


Only a sucker
Downtown North
on Jan 4, 2020 at 3:18 pm
Only a sucker, Downtown North
on Jan 4, 2020 at 3:18 pm

JR- really? Just have a series of markets that no one will shop at?
The solution will be to have the city subsidize the market either through paying for it with city dollars or a tax on college Terrace residents or Mandatory shopping laws. Also they need to shut down the 3 markets nearby to eliminate competition.
CT residents know the market is there. Signage is a red herring. If they had wanted to do there, they would have. And if to many people shopped there, CT residents would complain about traffic.


Frank
Downtown North
on Jan 4, 2020 at 3:31 pm
Frank , Downtown North
on Jan 4, 2020 at 3:31 pm

It seems to me that this is Alma Plaza all over again... so why not mimic what appears to be success at that location? The boutique grocery store with poor signage and counterintuitive parking didn’t work. But seemingly once Grocery Outlet moved in and the street-facing signage improved, they seem to be doing ok. Unless someone else knows otherwise?

My point is that, regardless of who’s at fault, it’s too late to build a different building. Parking is poor. The entrance is obscured. The street side is poorly marked. But now that the space exists let’s put something there that the market will actually support, so it could overcome these challenges. We have Molly Stones. We have Piazza’s. We have Edgewood Market. We have Trader Joe’s. We have Whole Foods and Safeway. We don’t have an Asian market. And the demographics in town would seem to indicate it would be supported.

Of course my whole argument is moot if Ranch 99 or something similar isn’t interested BECAUSE of the poor parking, entrance, signage, etc.


Only a sucker
Downtown North
on Jan 4, 2020 at 3:41 pm
Only a sucker, Downtown North
on Jan 4, 2020 at 3:41 pm

Frank- and if you recall one of the current council members, I forget if it was filseth or Dubois, vehemently opposed the outside signage at grocery outlet.
The city has always been against signage. Will they really support increased signage? What about the neighborhood activists that oppose everything?


rsmithjr
Registered user
Duveneck/St. Francis
on Jan 4, 2020 at 3:48 pm
rsmithjr, Duveneck/St. Francis
Registered user
on Jan 4, 2020 at 3:48 pm

@Comedy of errors,

Yes, the PC ordinance leads us to exactly this kind of mess.

1. The residents have no legal obligation to shop at the market. Yes, some of them may have cheered for what was promised to be a return of JJ&F. That was stupid on their part.

2. The developer is on the hook to keep a grocery of similar quality to JJ&F for the life of the project. Yes, this is crazy. What if no one shops there? BTW the new owner inherited these obligations which were in full view to him when he bought the project, no defense there. The original owner behaved very badly during this process, for example promising "only I can save JJ&F", when it was clear that the store was near closing anyway.

3. The city also is supposed to enforce this mess. If they don't they undermine their credibility in the future when it comes to dealing with developers.

This was of course a bad idea. The residents should have realized that JJ&F had served its purpose and there were plenty of opportunities to shop. The developer should not have gotten greedy and made promises that were unrealistic. And the city shouldn't have approved this scheme.


Property Owner’s Obligation
College Terrace
on Jan 4, 2020 at 4:23 pm
Property Owner’s Obligation, College Terrace
on Jan 4, 2020 at 4:23 pm

@ Only a Sucker

I think you are confused/misunderstanding the only important point here:

The owner of the property is required to have an operating grocery here even if they have to subsidize it in perpetuity. Not the City, not CT neighbors, but the Proprty Owner! Get it? What’s so difficult to understand about that? Are you an agent for the property owner?

Even if the property owner has to offer it to a grocery tenant for $1 per year rent. If they can’t get a grocer to operate a store for $1 per year rent then the next step is for the owner to pay a grocer (subsidize) the grocery business to the maximum amount of $2,000/day x 182 (6 months minus one day). If a grocer can’t make it with the property owner paying them $364,000/yr. then they just leave it vacant for good and pay the fines in perpetuity, it’s the cost of doing business the owner agreed to.

Of course they only have to pay the 6mo of fines (as opposed to full year) if a grocer is operating and closes. So at some point may make sense to increase grocer subsidy to just less than a full year’s fine total ($728,00/yr.) before they burn all the potential grocers who would give it a shot.

And RJSmith -You got it right on - The new owner was fully aware of this requirement when he bought the property including the grocer obligation.


CT resident
College Terrace
on Jan 4, 2020 at 4:23 pm
CT resident, College Terrace
on Jan 4, 2020 at 4:23 pm

I shopped at Khoury's twice, the first time was nice and the second time two out of the three items I bought had been expired for multiple months. No amount of signage would have gotten me to go back.


Only a sucker
Downtown North
on Jan 4, 2020 at 4:42 pm
Only a sucker, Downtown North
on Jan 4, 2020 at 4:42 pm

Property owner obligation - only in Palo alto would resurgence have no problem with a non viable Grovety store. The important thing is to have a store that no one shops in. Solution - the owner hires someone to open a store for 1 day every 6 Months. Problem solved.
BTW, I DID not resize the property was sold. Not sure why the new owner bought it with that clause.


rsmithjr
Registered user
Duveneck/St. Francis
on Jan 4, 2020 at 5:36 pm
rsmithjr, Duveneck/St. Francis
Registered user
on Jan 4, 2020 at 5:36 pm

Regarding the developer's requirements to supply a grocery store: this is the arrangement that the developer asked for! He wanted to override zoning, and to do so, the developer proposed the grocery store and the requirements thereunto. The developer even hired PR people to get residents to come to the city meetings so that he could have this arrangements.

I attended the meetings and the developer was all sweetness and light at the first series of meetings. He talked about his commitment to the neighbors, how he had talked to them and realized their need for a store and their love of JJ&F.

The city, while not as skeptical as they should have been, did ask him a lot of questions.

When developers are trying to get something from the city, they are very nice and filled with promises. Later, when they try to avoid their previous obligations, it is a different story.


Only a sucker
Downtown North
on Jan 4, 2020 at 6:11 pm
Only a sucker, Downtown North
on Jan 4, 2020 at 6:11 pm

Rjsmith-, maybe you remember. I seem to recall that when the original proposal was made, the developer proposed his son run the Grocery store. That was shot down by the council. Am I correct?
I would like to see an in depth analysis of why this happened. Is it the signage. The garage, the small size, the prices or something else. Obviously CT residents should be a major part of the analysis


Upzoning
Registered user
College Terrace
on Jan 4, 2020 at 6:34 pm
Upzoning, College Terrace
Registered user
on Jan 4, 2020 at 6:34 pm

This property was originally zoned neighborhood commercial which allowed for approximately 13,000 square foot of office and 13,000 square foot of retail. The developer wanted 40,000 square foot of first class office space. He realized that the only way he was going to get the property upzoned was to convince everyone that he loved JJ&F and he would save JJ&F if he was allowed to build all that extra first class office space. This is how the grocery store became the public benefit. In other words, the price ther developer offered in return for having all that additional and profitable first class office space to lease.


Anon
Another Palo Alto neighborhood
on Jan 4, 2020 at 7:23 pm
Anon, Another Palo Alto neighborhood
on Jan 4, 2020 at 7:23 pm

Posted by Only a sucker, a resident of Downtown North

>> Property owner obligation - only in Palo alto would resurgence have no problem with a non viable Grovety store. The important thing is to have a store that no one shops in.

With the entrance appearing to be blocked, it could certainly lead to reduced patronage. *Regardless, it doesn't matter.*. The building owner is under an obligation to facilitate a store. It is just another cost of doing business, like taxes. The new owner was aware of this obligation before purchasing the property. *Cost of doing business.*. Just like anything. Taxes. Utilities. Maintaining a working elevator. (Oops.). I't sure the new owner thought it was worth it, what with the extra (14,000 square feet?) of office space added.

>> BTW, I DID not resize the property was sold. Not sure why the new owner bought it with that clause.

Because the owner thought the there was enough office space rent coming to justify it, that's why. The new owner made a business decision. Any reason to think the owner is losing money on the office space?


A shopper
College Terrace
on Jan 4, 2020 at 7:33 pm
A shopper, College Terrace
on Jan 4, 2020 at 7:33 pm

Went there once, if I bought anything there, I must be it not myself.
The market is not serious about service ,it was all about not to be fined 2000 a day.


Just Wondering
Midtown
on Jan 4, 2020 at 9:16 pm
Just Wondering, Midtown
on Jan 4, 2020 at 9:16 pm

Is there a tax whiz out there who can answer this: From a tax perspective is it more advantageous for the property owner to pay the $2,000/day fine or to pay a grocer $2,000/day to operate a grocery? Is one of these options better for tax advantage?


rsmithjr
Registered user
Duveneck/St. Francis
on Jan 4, 2020 at 10:17 pm
rsmithjr, Duveneck/St. Francis
Registered user
on Jan 4, 2020 at 10:17 pm
Capa
College Terrace
on Jan 4, 2020 at 10:35 pm
Capa, College Terrace
on Jan 4, 2020 at 10:35 pm

I was thrilled to have a walking-distance alternative to Country Sun and Mollie Stone’s, and went in during the soft opening and again a couple of weeks later when all the “neighborly”? comments of support and enthusiasm appeared on Nextdoor prompting us to shop here.

And you know what?
There was no selection of organic fruits and vegetables, no useful bulk section, and none of the staples that I normally buy.

If you’re otherwise a Safeway shopper this might have been a market for you. But if you drag yourself to TJ or Sprouts there was nothing for you at Khoury’s, plus the prices were not that low to make it worthy of poor selection and in-cave shopping experience.


DeniseW
College Terrace
on Jan 4, 2020 at 11:22 pm
DeniseW, College Terrace
on Jan 4, 2020 at 11:22 pm

The community needs to support a market and so far they haven't done it. It is impossible for a store to be successful without community support. I empathize with both of the markets that tried. People didn't even go in. That black shroud hanging on the building for months made it look like it was closed. I think the city council should retract the requirement and open the property to any store that the community wants to support. Perhaps there is too much competition. We have Mollie Stone's already. Many people order food online from Instacart or shop at Costco. Perhaps, there is no need for a grocery store. Times have changed.


Mirinda
Palo Verde
on Jan 4, 2020 at 11:56 pm
Mirinda, Palo Verde
on Jan 4, 2020 at 11:56 pm

Grocery Outlet Rocks !


Death Shroud
Esther Clark Park
on Jan 5, 2020 at 12:00 am
Death Shroud, Esther Clark Park
on Jan 5, 2020 at 12:00 am

Was the Black Death shroud that obscured the building/grocery store due to work initiated by the grocery tenant on their tenant space, or the occupant of a different tenant space in the building, or property owner/landlord improvement project?

Also, did the grocery tenant choose not to install the signage that the City approved to save money because they knew they were already on their way out? Or because nobody would have been able to see it anyway until the death shroud was lifted, or did the property owner throw up a roadblock to prevent the signage from being installed?

@DeniseW - I think the only way that the City Council should approve a request from the property owner to revise/amend the PC Zoning requirement is if an economic analysis is undertaken to quantify the dollar value that the additional 26,000s.f. (? Or however much extra square footage) of class A Office space (over the life of the building) is worth. Then the property owner would pay that money in lieu of providing the grocery store to the City to be used for public benefit elsewhere. That is the only fair way I can think of to do it for the people of Palo Alto.


musical
Palo Verde
on Jan 5, 2020 at 3:59 am
musical, Palo Verde
on Jan 5, 2020 at 3:59 am

Always fun to go back and see what we were saying 10 years ago. -- Web Link

plus ça change, plus c'est la même chose


Michael O.
Stanford
on Jan 5, 2020 at 9:01 am
Michael O., Stanford
on Jan 5, 2020 at 9:01 am

There has to be more to this story than is being told. I'm concerned that the Khoury family was in on this from the beginning. They have done zero advertising, zero promotions, absolutely nothing to promote their market -- none of the things that you would expect a normal business to do to succeed. I would like to know exactly what the terms of their contract was. Blaming this on the city and the developer is too facile. The last market was structured to close on the day it did from the beginning. Does anyone know the actual behind the scenes info on this? And no, the neighborhood doesn't need this kind of market, obviously, or otherwise it would have succeeded.


Nayeli
Registered user
Midtown
on Jan 5, 2020 at 10:56 am
Nayeli, Midtown
Registered user
on Jan 5, 2020 at 10:56 am

Where can someone even park? Obviously, the answer is the parking garage under the bank. However, the problem is that few people know this. It isn't clear when you drive by the building. "FREE GARAGE PARKING" should be notated on the signs around the building.

Personally, I don't know if anything aside from a "destination" type of market will survive here. By "destination" type of market, I'm referring to grocery stores such as Grocery Outlet, Whole Foods, Aldi's, 99 Market, Draeger's or Trader Joe's. Given their niche, people will go out of their way to stop at such places.

Unfortunately, a grocery store at this location will effectively be viewed as a neighborhood convenience store. Even if it opens a sandwich counter or something similar, it might struggle because it will be forced to raise prices on virtually everything in order to afford the high rent.

A "Mom & Pop" grocery store (like Zanotto's) might work -- but it would struggle to attract customers in a location where people are hardly aware that a grocery store exists or struggle to figure out where to park. After all, a similar grocery store (Mollie Stone's) is just a ten-minute walk away on California Avenue.


Oxford Ave Address
another community
on Jan 5, 2020 at 11:10 am
Oxford Ave Address, another community
on Jan 5, 2020 at 11:10 am

@MichaelO - Good point that would also explain why the most recent grocery operator changed the street address from one on El Camino that anyone on the peninusila would instantly recognize to the Oxford address that fewer people would know. Not a smart decision if you are trying to increase visibility of your business.


Oxford Ave Address
another community
on Jan 5, 2020 at 11:14 am
Oxford Ave Address, another community
on Jan 5, 2020 at 11:14 am

@DeathShroud - Basic calculations show the inlieu payment inder your scenario would be in the 10's of millions of dollars over 30+ years and that is before factoring in inflation!


Malcolm
Registered user
College Terrace
on Jan 5, 2020 at 12:54 pm
Malcolm, College Terrace
Registered user
on Jan 5, 2020 at 12:54 pm

The developer got to build a massive building in a residential area. In exchange they promised a neighborhood benefit in the form of a market.

Some portion of the $60k/month fine they are supposed to pay would go a long towards making any grocery store viable.

If they don't want to support a grocery store then they can pay the fine. Or perhaps Palo Alto should red tag the building.


ALB
Registered user
College Terrace
on Jan 5, 2020 at 1:50 pm
ALB, College Terrace
Registered user
on Jan 5, 2020 at 1:50 pm

Yes Malcolm you are correct this Planned Community building was authorized on specific conditions in the agreement including the benefit to the community of a market. Unfortunately the market was moved to the address on a highway instead of the former College Avenue site. The original address was neighbor friendly. Now the new landlord, Jason Oberman, for various and unknown reasons has put a tourniquet via the netting and scaffolding on the Khoury business with delayed work now in the seventh month. When a business is started up it takes a minimum of two years to gain traction. With the darkened façade many people did not even know that the market exists. Combine infrastructure issues in the poorly constructed building including the elevator breaking down, pipes bursting and drain problems the Khourys were not supported by their landlord. The pièce de résistance is the dark netting and scaffolding. What better way to choke the business. In my opinion the landlord wants the tenant to leave so he may calculate a higher paying tenant. Do not say that the grocery store failed. The landlord failed because he has committed the sin of indifference in my opinion.

Even with the revised permit of November 18, 2019 to get the colors changed the work could have been completed by the Hays Group by now. Why indeed did the landlord keep up this shrouding into the seventh month?

So neighbors need to write to the council and yes require them to direct Molly Stump, the city of Palo Alto attorney, to include the missing language regarding the fines. The city needs to be fiscally responsible and not allow this landlord to outsmart them any further. Palo Alto neighborhoods and College Terrace are disturbed that the attorney had not included the correct language regarding penalties and fines. Please update the ordinance so Oberman and his lawyer will not deprive the community of the benefit that is a condition of approval.


ALB
Registered user
College Terrace
on Jan 5, 2020 at 2:11 pm
ALB, College Terrace
Registered user
on Jan 5, 2020 at 2:11 pm

Please make a correction to my previous post. The last paragraph should not include The Khourys at the beginning of the third sentence. I mistakenly included the owners of the store in this sentence. Therefore kindly delete their name.


Upzoning
Registered user
College Terrace
on Jan 5, 2020 at 2:37 pm
Upzoning, College Terrace
Registered user
on Jan 5, 2020 at 2:37 pm

The building owners are already in court trying to get all the fines overturned.

They were successful in court last May getting the special schedule of fines that the council put in place at the time of the upzoning as part of their conditions of approval. Fines specifically designed by the council to incentivize the building owners to uphold their offer to keep a market in operation as the public benefit in return for upzoning to allow the owners to build all that additional and profitable first class office space.

How did they do that? Appears that at the time the council approved the upzoning and development agreement, the city staff "forgot" to add the special schedule of fines to the official documents! Despite knowing this since May, the legal staff have not yet rectified this error so that at least going forward the fines will be in place.

The only fine that is now in place is the much lesser general fine for a code violation. The owners are currently in court appealing even this fine. It will no doubt help their case if they can show that two markets have failed and the public benefit was an unreasonable requirement. They should not be held to it. A judge may agree with them.


Upzoning
Registered user
College Terrace
on Jan 5, 2020 at 2:51 pm
Upzoning, College Terrace
Registered user
on Jan 5, 2020 at 2:51 pm

@Death Shroud

The exterior of the building is entirely the responsibility of the landlord. That is standard terms of retail leases. When the Khoury's took on the lease they were promised a visible exterior sign by the landlord. As well as replacing the dark glass so that from the street it can be seen that there is a grocery market inside.

At the time the new owners took over the grocery store had not been in operation for more than six months and the fines were accruing. The Khoury's were not ready to open the market but as a favor to the owner to stop the fines they opened. Once they had already opened and the fines stopped, the building owner appears to have left them out to hang.

It is worth noting that only the market was singled out for this treatment by the owner. The other ground floor businesses immediately had prominent signs installed by the owners and they have not been hidden behind construction cloth.


Mark Weiss
Registered user
Downtown North
on Jan 5, 2020 at 3:27 pm
Mark Weiss, Downtown North
Registered user
on Jan 5, 2020 at 3:27 pm

With the profits the developers made flipping the building they can buy every living current and former council member an Ike’s sandwich of her or his choice 3x per day for the next 800 years


Anon
Another Palo Alto neighborhood
on Jan 5, 2020 at 5:01 pm
Anon, Another Palo Alto neighborhood
on Jan 5, 2020 at 5:01 pm

Posted by Upzoning, a resident of College Terrace

>> How did they do that? Appears that at the time the council approved the upzoning and development agreement, the city staff "forgot" to add the special schedule of fines to the official documents! Despite knowing this since May, the legal staff have not yet rectified this error so that at least going forward the fines will be in place.

You are making it sound like a criminal act on the part of the city. I doubt that. Hanlon's razor:

"Never attribute to malice that which can be adequately explained by stupidity."[

Web Link


upzoning
Registered user
College Terrace
on Jan 5, 2020 at 5:06 pm
upzoning, College Terrace
Registered user
on Jan 5, 2020 at 5:06 pm

Anon

Would you prefer the word "neglected" rather than forgot? Either way, the city has known about this omission since last May and has yet to rectify this original error.


Resident 2
Charleston Meadows
on Jan 5, 2020 at 6:32 pm
Resident 2, Charleston Meadows
on Jan 5, 2020 at 6:32 pm

Palo Alto residents are extremely frugal, this is why the Grocery Outlet has been able to stay open and thrive.


Here is a good idea
Midtown
on Jan 5, 2020 at 7:22 pm
Here is a good idea, Midtown
on Jan 5, 2020 at 7:22 pm

Problem: Apparently the store is closed because it does not have enough business. There is an abundance of similar grocery stores in Palo Alto. Add the nearby Costco and it becomes evident that a typical store in the style of, say, Safeway will not be able to attract enough customers. This is not a problem due to the city policies.

Solution: as mentioned in one of the above posts, open an Asian grocery store. I think we already have several Latino stores nearby (I already shop in at least two of them). What we (or some of us) need is a good Asian store. Keep the store nice and tidy to attract a steady or occasional diverse set of customers.


Only a sucker
Downtown North
on Jan 5, 2020 at 7:47 pm
Only a sucker, Downtown North
on Jan 5, 2020 at 7:47 pm

Has the city of Palo alto ever had an ethnic market? If not, then why not? Maybe the weekly can do a story.


Upzoning
Registered user
College Terrace
on Jan 5, 2020 at 8:31 pm
Upzoning, College Terrace
Registered user
on Jan 5, 2020 at 8:31 pm

Could it be that the store didn't have any customers because there was no visible sign on the exterior that there was a market, the dark glass obscured the market, and then the shrouding hid it completely? How many people knew there was a market in that space? The owners did not delay putting up exterior visible signs for their other ground floor businesses, nor did they hide them behind construction fabric for seven months.


Town Square Moderator
Registered user
Another Palo Alto neighborhood
on Jan 6, 2020 at 10:15 am
Town Square Moderator, Another Palo Alto neighborhood
Registered user
on Jan 6, 2020 at 10:15 am

ALB: Your initial comment has been corrected as indicated in your request.


Anon
Another Palo Alto neighborhood
on Jan 6, 2020 at 12:05 pm
Anon, Another Palo Alto neighborhood
on Jan 6, 2020 at 12:05 pm

Posted by Only a sucker, a resident of Downtown North

>> Has the city of Palo alto ever had an ethnic market? If not, then why not? Maybe the weekly can do a story.

Yes, but, which ethnicity are you talking about, and, how large? For example, there is Russian market at 3707 ECR, "Euromart". Great for some things, such as authentic Russian "cheese, meat, sausages, hot/cold smoked fish, pickled vegetables, cakes, candies". I think it has been pretty much the same for 20 (?) years. According to the web:

"Магазин, олицетворяющий крошечный кусочек России. Магазин - сувенир, праздник, талисман и дом. Магазин подлинных вкусов российской традиции."

If you mean a large Chinese supermarket like Ranch99, then, no, I don't recall any. Perhaps you can convince the Middlefield Safeway to sell to such a chain. Good luck.


Annette
Registered user
College Terrace
on Jan 7, 2020 at 7:15 am
Annette, College Terrace
Registered user
on Jan 7, 2020 at 7:15 am

Agree w/all above who call this a mess. And I put the lion's share of blame squarely on the City. The developer-tilting City Council majority handed a huge W to the original too-slick-for words developer when they granted the PC. And what's with the City Attorney's decision about fines? And why was the original design that had the grocery in a much more viable area of the project scrapped? And what's with the various "improvements" that have kept the grocery locked in a weird, dysfunctional limbo - for years now?

To those who blame the neighborhood for not supporting the store: a picture is worth a thousand words. The owners should be held to the terms of the deal and the City should fast-track whatever improvements are needed to make the building work for a grocery.

A neighborhood-serving grocery was the public benefit that was the cornerstone to getting the College Terrace Centre PC approved. It's hardly a stretch to imagine the owners whining to CC and Staff that they have done all they can to honor the terms of the deal but a grocery just isn't viable. Blah, blah, blah. We've heard it before and we know Council's tendencies.

Keeping in mind that a public benefit is required, if the terms of the deal are revisited, rather than allowing the owner to skate away from the grocery requirement, maybe the deal should be re-written to require that the owner permanently convert the space to BMR affordable housing units w/a component for teachers or public safety staff. And add that the space can NEVER be converted to office use.


Resident
College Terrace
on Jan 8, 2020 at 9:15 pm
Resident, College Terrace
on Jan 8, 2020 at 9:15 pm

It's so clear the developer/owner did NOT want the grocery store to succeed and wanted to rent it to a higher paying tenant.

The location was atrocious in the building. Instead of being in the location where J&J Market was (which had ample parking and lots of foot traffic), they placed a BANK in that prime spot and instead put the grocery store in the worst possible location in this hideous and ugly building.

Likewise, without any signage, we had no clue a grocery store was up and running.

The owner of this building doomed this grocery store from the beginning and should be fined massively for breaking their terms of agreement. It's a contractual break in the agreement.

Really, the city should have said that if there is no grocery store, the city of Palo Alto can claw back ownership of the land by 50% or 40% or something like that.

College Terrace got an ugly building that is extremely massive and the community neighborhood does NOT benefit from it's presence. It's an eyesore and hideous to begin with, but there are no green spaces, it's extremely large, with very little sidewalk space, and casts a shadow on College Terrace neighborhood.

The owners keep flipping the property to make money and in the meantime, the residents of College Terrace lost a lovely grocery store they could walk to.

The city should have stipulated that the market gets the prime location of where J&J Market used to be, where there was lots of foot traffic from College Terrace.

And now we have Adrian Fine - the developer's puppet boy as Mayer of Palo Alto. Things are sure looking up in 2020


Resident
College Terrace
on Jan 8, 2020 at 9:30 pm
Resident, College Terrace
on Jan 8, 2020 at 9:30 pm

My kids and I used to walk up College Avenue to go to J&J Market. When elderly relatives (grandparents) visited, they easily walked up College Avenue or drove up and parked on College to go into J&J market. Directly across from the gas station, it had high visibility.

Ever since the new building went up, one had to scramble to parallel park on Oxford Avenue, where there is NO FOOT traffic and then go into the grocery store.

It's been purposefully done because the College Avenue side has much greater foot and car visibility. It's also closer to California avenue. Many small businesses line College Avenue. No one really walks up Oxford.

This was purposefully done to ensure the Supermarket was NOT VIABLE.
As such the owner of this hideously built building should either subsidize any market that comes into this building (to ensure the market business at least breaks even) OR move the supermarket into the prime location where the market used to be (facing onto College Avenue), and put up the signage.

It's all about marketing and visibility and access.

If the Khoury's market had signage and was facing onto College Avenue (where JJ Market used to be), and there was a bit of green space and a few places to sit out front with benches, and umbrellas, this market would have thrived.

Instead they stuck it under construction, cut off from the rest of the world, with no signs, and facing onto ugly Oxford street where no one walks up or down (including cars).

Buch of pretension to act like they put in a market and now claim it was not viable. B.S.


Hmm
Barron Park
on Jan 9, 2020 at 10:35 am
Hmm, Barron Park
on Jan 9, 2020 at 10:35 am

Are they going to leave all the food to rot on the shelves live they did last time they closed?


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