The City Council voted 4-1 Tuesday night to approve plans by Safeway to build one of its new "Lifestyle" supermarkets in Pleasanton with a scheduled opening of November next year.
Councilman Matt Sullivan voted against the project, contending that the new store could "suck the life" out of existing grocery stores in Pleasanton, possibly leaving employees at those stores without jobs.
But Mayor Jennifer Hosterman and others on the council disagreed, calling both the new Safeway superstore and the retail complex to be built with it as a financial and shopping opportunity for Pleasanton.
"This new store, here in Pleasanton where Safeway has its corporate headquarters, will be the company's flagship store that will be continually updated with new ideas and products," Hosterman said.
Emily Wagner, Pleasanton's director of finance, said an economic and planning study by a Berkeley consulting firm showed that 25 percent of the sales to be generated by the new store will come from shoppers using Pleasanton stores for the first time. Because of its larger size and product offerings, including large organic foods and fresh vegetables sections, the Lifestyle store also will bring back Pleasanton shoppers who now go to supermarkets outside of Pleasanton to shop, including Whole Foods in San Ramon, the survey added.
The fiscal impact to Pleasanton will add $123,000 to the city's general fund in the store's first year of operation and $285,000 a year after that.
The 58,000-square-foot store with adjoining retail and commercial stores and restaurants will be built on a 12-1/2-acre site at the at the southwest corner of Valley and Bernal avenues adjacent to the I-680 northbound off-ramp. Construction is expected to start shortly after a second reading of last night's approve ordinance, which is scheduled for the next council meeting on Nov. 16.
The council meeting that was scheduled for Election Day, Tuesday, Nov. 2 has been cancelled.
In a detailed presentation during a two-hour public hearing, Brian Dolan, Pleasanton's director of community development, said the new Safeway complex will include a bank with drive-up tellers and ATMs, a pharmacy, also with drive-up services, and restaurants. Walkways throughout the complex will connect the stores with sit-down outdoor plazas.
The project is being built on the edge of a 39-acre site owned by South Bay Construction and currently zoned for up to eight four-story office buildings. Approved in 2000, that development never got under way because of the downturn in demand for office space.
Sullivan, in voting against the Safeway project, said the city needs to "step back" and determine how best to use that site before allowing developments. He suggested that with the city now required to provide more low-to-moderate-priced housing, the South Bay property might best be used for high-density residential development with some retail.
"But not this development," Sullivan said. "I can't support it."
Facing Valley, the store will back onto the northbound I-680 off-ramp. Driveways will be positioned along Valley Avenue and one on Bernal will link with the Koll Center driveway on the other side with a full-phase traffic signal to allow turns into and out of both centers in either direction. Although larger and newer than the Pleasanton Safeway at Valley and Santa Rita Road, that popular store will remain open.
Scott R. Trobbe, a principal partner at South Bay Construction, said he still plans to develop the rest of the 40-acre site it owns into an office building complex. Plans for the four-story campus haven't changed much since 2000, when South Bay joined with Greenbriar Homes and others to acquire the full 510-acre Bernal site from the city of San Francisco, which had owned the land since the 1930s.
Greenbriar and KB Home have since built the homes and apartments the city of Pleasanton approved as part of the purchase agreement, that included 370 acres as a gift to the city for public uses. The city's first development on its property—lighted baseball fields—was completed last year.
Trobbe said Tuesday that while the office building market is still sluggish, the synergism in the new Safeway section of the site could attract more interest.
Sullivan agreed that the office park plans of 2000 are probably no longer relevant and that the sluggish office market is likely to continue for years. Given the city's recent loss of its housing cap and a court-ordered mandate to build more affordable, high density apartments and other housing, the Trobbe property—including the Safeway complex—could be where this housing should go.
"Although it's not near BART, it is transit-oriented in that it's next to a freeway," Sullivan said. "I can see housing there and some retail, maybe even a grocery store, but not this."
As for the new Safeway store's impact on surrounding businesses, Wagner said the Berkeley consulting firm that analyzed the project found that 20% of the grocery store sales will be new to the city while 45% of other retail sales in the stores next to Safeway also will be new to the city.
However, she said, 80% of grocery store sales and 55% of other retail sales will come from the existing market.
"The analysis found that the estimated demand by Pleasanton residents for food stores and restaurants exceeds the supply, which means that there is a net outflow of consumer dollars from Pleasanton to other locations," Wagner said, calling the outflow "retail leakage."
Councilman Cindy McGovern, noting that Safeway dropped its earlier plans to include a gas station as part of its new store development, questioned that decision.
"I've been asked by many just why there won't be a gas station," she said. "I know many who drive to Dublin to buy gas at that Safeway and then do their shopping there."
City Manager Nelson Fialho said his staff, the Planning Commission and Safeway had agreed that a gas station at the new Bernal site just wouldn't fit.
Those who spoke at the public hearing only praised the project. Some from neighborhoods in that vicinity as well as from developments along Foothill Road said the store is needed to reduce their travel time to more distant stores, including those in nearby Dublin and San Ramon.