The Khourys took over the spot in January 2019 after the space had been vacant for a year. On Jan. 3, a sign in the window announced the store's closure, and prices were 30% off.
Co-owner Chris Khoury said in a letter to customers announcing the closure that the business has been challenged by many months of construction taking place around other parts of the building.
A dark shroud of black netting currently covers the front of the building.
"The construction killed us. Even the people upstairs (at the First Republic Bank) said, 'We thought you guys closed two months ago,'" Khoury said.
Khoury said the College Terrace Centre owner had wanted to repaint the exterior to distinguish it from the bank, which occupies the office space above the market and an adjacent building. The work began in July and was supposed to take a month but has stretched into its seventh month.
"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 his business could be successful if not for the construction. The Khourys have had loyal customers dating to when they took over the Neighborhood's former JJ&F Market in 2011.
"We were going to have kombucha on tap and we were going to do a cafe," he said.
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 ordinance 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. Only six months total of vacancy are allowed per five years.
Owners of both Khoury's and College Terrace Market cited long delays with getting the necessary signage to give their businesses visibility. The markets 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. Khoury's was unable to overcome the obstacles, said Khoury, whose family runs a second grocery store in San Francisco.
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.
Blox Ventures, a firm owned by local developer Jason Oberman, bought the blocklong development in July 2018 for $78.5 million. Oberman brought the Khourys in to establish a market.
Neither Oberman nor his attorney have responded to the Khourys when they tried to contact them, Khoury 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 front of the building were painted first, the netting and scaffolding could be removed, he said.
"I feel like they are doing it on purpose," he said.
Khoury said he is perplexed and disappointed by the situation.
"I love Palo Alto. (My brother) 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," Khoury said.
The San Francisco store can't employ all five Khoury siblings and their children.
He said he 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.
"We are disappointed to hear about the potential closure of Khoury Market," city of Palo Alto 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."
READ MORE ONLINE
An article about how the College Terrace Centre owner is seeking to get out of paying $140K in city fines is posted at PaloAltoOnline.com.
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