Mall owners hoping housing gains offset potential retail losses
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PUBLISHED: July 19, 2019 at 5:45 am | UPDATED: July 20, 2019 at 6:50 am
ALAMEDA — With some brick-and-mortar stores closing as people shift to online shopping, the owners of Alameda South Shore Center are making plans to avoid shuttered businesses and capitalize on the Bay Area’s high demand for housing.
The 45-acre center’s owners, Jamestown L.P., of Atlanta, have submitted a proposal to the city to build up to 1,215 apartments at the shopping center that borders Robert W. Crown Memorial State Beach, a popular spot for joggers, picnickers and windsurfers. Jamestown’s plan would take decades to complete if eventually approved. Stores and other businesses would remain at the center’s core, however, even if the proposed housing gets built.
Among anchor businesses currently in the center at Otis Drive and Park Street are Safeway, Trader Joe’s, Kohl’s and Old Navy. The redevelopment would focus on what Jamestown calls the site’s underused southeast and northwest parcels — now occupied by parking lots and the Shoreline Car Wash and Big 5 Sporting Goods, both smaller businesses across from the beach and Shoreline Drive, as well as another area where offices and other lots border Otis Drive.
If the city gives the OK, those businesses would likely not get their leases renewed and the first apartments would rise across from the beach around 2025, according to Jamestown. The entire redevelopment could be finished by about 2045.
“It could be a nice place to live because it’s so close to the beach,” said Amanda Haney, 24, of Oakland, as she shopped at the center on Monday. “But if they’re going to be apartments that not many people can afford, then who will really benefit? Especially if the apartments cause rents nearby to go up and people are forced to leave.”
Alameda South Shore Center, which is surrounded by a residential neighborhood, totals about 600,000 square feet and is one of two major shopping centers in the city. The other center, Alameda Landing, is located near the Webster and Posey tubes that connect with Oakland.
The housing project and its pace of completion will hinge on whether some of the center’s businesses, such as T.J. Maxx and Ross Dress for Less — now located in areas targeted for redevelopment — will still be there in the coming years amid changes in the retail market, said Remy Monteko, a Jamestown vice president of asset management.
Jamestown’s goals are to increase the property’s benefits, be ready for any changes in the retail market and take advantage of the high demand for housing in the Bay Area, she said. Some of the overall housing could include condominiums, Monteko added.
The plan from Jamestown comes as owners of shopping centers and malls try to adjust to changing consumer habits and attract millennials, in part by offering more dining and entertainment options as traditional mall-based retailers such as Macy’s, Sears and JCPenney struggle. This summer, for instance, Round One Entertainment, a Japanese retail chain that offers bowling, arcade games, karaoke and other activities, will open at Hayward’s Southland Mall, where a Mervyn’s and a Kohl’s once operated.
Coresight Research, which analyzes and reports on the retail industry, announced July 11 that so far this year, 7,062 stores have closed throughout the United States, with 3,017 stores opening. That compares with 5,864 closures and 3,258 openings for all of 2018. The data covers department stores and specialty retail businesses, including those that sell consumer electronics, groceries and furniture.
A redevelopment plan the city approved in 2009 guides changes at the Alameda shopping center. The plan allows owners to develop an additional 60,000 square feet of retail within the center. Jamestown, which submitted its plan to the city in May, wants to amend that plan and convert a portion of the already approved retail expansion to multifamily residential housing.
No date has been announced for when Alameda’s Planning Board or another city body might consider the request to build the housing. An estimated cost for the ambitious project also is not yet available.
Jamestown portfolio features other properties around the country, including Berkeley’s Fourth Street shopping neighborhood off University Avenue near Interstate 80 and Ghirardelli Square in San Francisco.
Jamestown held community meetings July 9 and 10 to get feedback on its plan for Alameda. Other outreach events will be held at the shopping center Aug. 1 and Sept. 5. For information, including to RSVP, go to southshoreneighborhood.com.
“We were really heartened and encouraged by the level of community engagement,” Monteko said.