San Francisco's Retail Scene

[rs913]

Another fine North American example which I had the pleasure of visiting last month: St. Lawrence Market near downtown Toronto. (where you can sample 2 local specialties: "peameal bacon" on a Kaiser roll, and butter tarts. Not bad. Not bad at all.)

The Emeryville market doesn't compare to these examples. It's just a bunch of gross fast food stands. I worked a summer internship across the street, and my co-workers were way less than enthusiastic about it as their default lunch option.

[nequidnimis]

In a thread on the Central Subway, BTinSF mentions all the restaurants in the Richmond. Any favorites? I am looking for a brunch place near Geary and 8th Avenue. Any suggestions?

[BTinSF]

After years, Bayview will finally get full-service grocery store
James Temple, Chronicle Staff Writer
Wednesday, December 12, 2007

The world's third-largest retailer plans to open the first full-service grocery store along San Francisco's Third Street corridor, concluding a more than decadelong effort by city officials to expand the impoverished area's food shopping options.

Fresh & Easy Neighborhood Market, the aggressively expanding U.S. division of British-based Tesco PLC, has signed an agreement to buy the 15,000-square-foot retail space of a condominium project from co-developers Goldman Sachs Group Inc. and Noteware Development, said Roberto Munoz, the company's neighborhood affairs manager. The 360-unit project is located at 5800 Third St., a former Coca-Cola factory.

"In all of District 10, we have no real supermarkets," said Supervisor Sophie Maxwell, who represents the Bayview district. "It's a tremendously important amenity that a lot of other neighborhoods take for granted."

Fresh & Easy wouldn't disclose financial terms of the deal and doesn't know when the store will open, Munoz said. Mayor Gavin Newsom initiated the contact with Fresh & Easy, fulfilling a promise he made at a town-hall meeting last year to lure a grocery store to the Bayview neighborhood, said Jesse Blout, director of the Mayor's Office of Economic and Workforce Development.

"This project will be a flagship in our broader efforts to revitalize the Third Street corridor, and its presence will ensure that the community is a place where families will want to stay," Newsom said in a prepared statement.

Shopping options in Bayview-Hunters Point are largely limited to the Foods Co. bulk grocery store and the small Super Save market, along with corner stores and fast food restaurants. An October survey by the Southeast Food Access Working Group, part of Newsom's Shape Up San Francisco program, found that 94 percent of neighborhood residents would support new food options and that half frequently bought groceries at Safeway stores outside the area.

This lack of options contributes to the health problems that plague the area, said Mark Ghaly, co-chair of the working group and director of the Southeast Health Center. The Bayview-Hunters Point neighborhood has the highest rate of hospitalization for adult uncontrolled diabetes and congestive heart failure among San Francisco neighborhoods, according to a 2004 study by the San Francisco Department of Public Health.

"Let's bring the carrot closer to home," Ghaly said. "If we can get more convenient access to healthy foods, it would make a difference among the citizens I serve at my clinic." Safeway Inc., Whole Foods Market, Albertsons and Trader Joe's all declined overtures to locate along Third Street, city hall sources say.

Fresh & Easy was to open its 24th U.S. store this morning. It has 122 announced locations in Southern California, Las Vegas and the Phoenix area and expects to have 50 open by the end of February and 200 by the end of next year. Tesco is investing $2 billion over five years in its U.S. division.

The stores are smaller than traditional supermarkets, averaging around 10,000 square feet, about the same size as a typical Walgreens. They offer a mix of prepared meals, fresh produce and perishables, and carry national brands as well as their own. The company actively recruits workers from the neighborhoods the stores serve, spokesman Brendan Wonnacott said.

The Third Street deal "really does demonstrate that we're able to put our business into any kind of neighborhood, those that have been underserved by traditional grocery stores," Munoz said. "There's a lot of momentum and there's a lot of excitement because it's something the neighborhood really needs."

E-mail James Temple at [email protected].

http://sfgate.com/cgi-bin/article.cg.../BUI5TSD7U.DTL

[peanut gallery]

Interesting article on the trend to integrate high-end restaurants within some of the new residential developments going up.

As upscale home complexes add great chefs, more buyers are biting
Stacy Finz, Chronicle Staff Writer
Wednesday, December 19, 2007

The great chefs of San Francisco are selling real estate.

No, they haven't all gotten their broker's licenses. And they're not participating in some strange reality TV show.

They're opening restaurants in San Francisco's newest luxury residential complexes. And their cachet is bringing in buyers.

Tony high-rises have always lured potential residents with views, pools and prestigious ZIP codes. But now, well-to-do Baby Boomers and young, upwardly mobile professionals want the amenities of high-end hotels. So developers are putting on the Ritz. And because San Francisco spends more money on dining out than any other metropolis on record, haute cuisine is becoming part of the package.

"Thirty-five years ago, a restaurant was just a place to eat," said San Francisco chef Gary Danko. "Twenty years ago, the name of the chef wouldn't have mattered. But now, chefs are celebrities on the same level as movie stars. People want to be associated with them, they want to eat their food, buy their cookbooks and watch their television shows."

And apparently they also want to be their neighbors.

Homeowners in the under-construction Millennium Tower each will get a temperature-controlled wine locker, a 20,000-square-foot clubhouse and nationally known restaurateur Michael Mina. The almost-ready-for-occupancy Infinity is offering a state-of-the-art gym, a 75-foot-long pool and Nancy Oakes, Pamela Mazzola and Ravi Kapur, chefs of the venerable Boulevard restaurant. The Fairmont Heritage in Ghirardelli Square boasts fine retail stores, a personal wine shopper and the famed Danko. The Soma Grand, a newly opened 246-unit condominium building in the trendy South of Market neighborhood, has a concierge and bed turn-down service and is negotiating to get the Slanted Door's Charles Phan, one of the most coveted chefs in town.

All those restaurants will be open to the public, but residents will get priority reservations and, in some cases, perks such as room service, catering and private dining.

The trend is happening all over. In New York, internationally known chef Jean-Georges Vongerichten opened his eighth restaurant, Perry Street, in the residential tower in which he lives. In Dallas, celebrity chef Dean Fearing teamed up with Crescent Real Estate to build a restaurant in the Ritz-Carlton, a mixed-use development with 70 condos. Ame in San Francisco's St. Regis Hotel, which also has a number of residences, has become a destination restaurant in the last year.

Now the concept seems to be hotter than ever. In less than five weeks, Millennium Tower sold $100 million worth of condos, according to Richard Baumert, managing director of Millennium Partners. He credits a lot of the hoopla to Mina, whose self-named San Francisco restaurant in the St. Francis hotel is one of the toughest-to-get reservations.

"Michael is a very recognizable name in San Francisco," he said. "And Rajat Parr, Michael's wine director, is one of the most celebrated sommeliers in the world. Our intention was to find the best names who would add distinction to the project."

In addition to operating what will be called RN74, a restaurant and wine bar in the 419-unit building, Mina and Parr will be responsible for food and beverage service for the residents' private dining room on the tower's second floor, where homeowners can either order off the RN74 menu or a special menu created just for them. Parr will set up the wine service and help with the clubhouse's tasting room, where residents will get their own cellars to store up to a case of wine each.

"What we found during our research for the project is that San Franciscans are obsessed with three things: food, wine and fitness," said Baumert, adding that in order to sell units that range from $700,000 to $12 million, they have to give the people what they want - a professional fitness center, fine wine and good food.

According to the most recent U.S. Bureau of Labor Statistics numbers, the average San Francisco household spends $3,769 a year eating outside the home. That's $545 more than households in New York, $598 more than in Chicago, $660 more than in Seattle, $986 more than in Atlanta and $1,725 more than in Miami.

New Soma Grand condo owner Nina Gruen said that after raising and fixing meals for five sons for years, she wants to spend her days as an empty nester making reservations. And she'll be making a lot of them in the lobby of her new home if Phan opens a restaurant there.

"I was ecstatic to hear the news," she said. "It's an incredible boon."

Not only does she appreciate the convenience of having a place to eat just an elevator ride away, but, she said, "A brand like Phan adds value to my investment." Units in the building run $500,000 to $2.9 million.
Gruen, who, with her husband, Claude, owns a marketing strategy company, sold her big house in the El Cerrito hills to buy a 2,400-square-foot condo with sweeping views of the city. With the sons now grown, the Gruens want to be close to the opera, theater and their favorite restaurants.

"We're a 12- to 13-minute walk to the Civic Center and an 18-minute walk to work," she said.

Their move to the city is not unusual, said Gruen, who has studied the suburban flight of the Baby Boomer as part of her work.

"They're no longer interested in the golf-course gated communities," she said. "They want to move to where the action is."

Alexis Wong, chief executive of AGI Capital, which is working with TMG Partners in developing the Soma Grand, knows that part of the action includes fine dining. So she's been wooing Phan for months.

"I said 'no' a dozen times to Alexis before I gave in," said Phan, who between his two Vietnamese restaurants - the Slanted Door in the Ferry Building and Out the Door in the Westfield San Francisco Centre - has him plenty busy.

But the chef says the location and the developer's financial incentives were too good to ignore.

"When you're building a restaurant from scratch, it's astronomical," said Phan, adding that the Soma Grand will pick up some of the tab, and a lot of the infrastructure like plumbing and electrical is already in place.

Phan said he's ironing out the details with Wong but is strongly considering opening the space as a lounge with Asian small plates.

Boulevard's Oakes, Mazzola and Kapur and their partners Richard Miyashiro and Kathy King also are brainstorming ideas for their restaurant at the Infinity, a 650-unit complex due to open its first phase in the spring. Oakes said they had been looking for a space to open a second restaurant for some time before stumbling onto the Infinity. Once the developers knew the Boulevard crew was interested, they started courting.

"I joked with them that we could talk it over sometime over a glass of 151 (proof) rum and Diet Coke," Oakes said. "When we got back to the restaurant, there was a bottle of 151 and some Diet Coke waiting."

She said what instantly appealed to them about the space was its Financial District location and the fact that it had already been planned as a restaurant.

"We looked at all types of existing buildings, and then it would strike us that there was no place to take out the garbage or that we would have to completely redo the ventilation," Oakes said. "We wouldn't even know how to go about all this. And now we have developers who do."

Oakes says she also likes the concept from an urban planning standpoint.
"Instead of having desolate sidewalks, you have everything you need right there," she said.

But not everyone is thrilled with these luxury towers and their swanky restaurants. Some feel that there is already a lack of housing for the average San Franciscan and that this is one more step toward turning the city into an exclusive playground for the rich. Last year's estimated median household income in San Francisco was $65,497, according to the U.S. Census Bureau, but it would likely take annual household earnings of at least $200,000 to afford a condo in one of these developments, said Sue Hestor, a local land-use attorney. And that wouldn't leave a whole lot left for eating at Gary Danko or Michael Mina.

"They're trying to price the market so high that only the very rich can afford to live here," Hestor said. "And, of course, the restaurants will be exclusive, too."

Rita Koike, a New York transplant and single mom who just bought a two-bedroom condo on the Infinity's 18th floor, sees only the positive. Not only are some of these projects gentrifying once-sketchy neighborhoods, but their mixed use is keeping people out of their cars.

"You don't have to leave your area because everything is there," she said. "I'd really rather eat locally. If you've got a good restaurant just downstairs, why go anywhere else?"

Koike also likes the familiarity of an on-location restaurant.

"When I lived on the Upper East Side, I had the same restaurants that I went to," she recalled. "And when they saw me coming, they greeted me with my glass of Champagne, my favorite shrimp cocktail to start and a Caesar salad with chicken."

Carl Shannon, managing director of Tishman Speyer, said the Infinity, where homes sell for anywhere from the low $600,000s to more than $6 million, is about building an entire environment.

"It's about location, architecture and amenities," he said. "And we feel that bringing in a top-notch restaurant will really resonate with the quality of the product."

At the Fairmont Heritage, the vacation condominiums in Ghirardelli Square, builders are trying to sell a lifestyle, said Todd Chapman of JMA Ventures. The developer has refurbished the historic square, adding retail shops that include a fancy grocery store, wine bar and Danko's yet-to-be-named second restaurant. Danko's first is just a few minutes' walk away.

"It's fantastic to have someone of his caliber in the development," Chapman said. "Food is such an important part of the Northern California culture."
It's a culture that Chapman feels will sell the part-time homes, which range from $250,000 to $380,000 for a 1/10 interest. Residents can call ahead to have their apartments stocked with wine, and every kitchen is equipped with warming drawers, Sub-Zero refrigerators and Wolf cooktops. Or, if residents prefer, they can leave the cooking to Danko. His 200-seat restaurant will be modeled after a modern brasserie, with a menu that includes onion soup, steak, french fries and hamburgers. He will also provide room service.

Because his latest venture is so much bigger than his original restaurant, diners likely will get day-ahead reservations.

Residents won't even have to wait 15 minutes.

http://www.sfgate.com/cgi-bin/articl....DTL&type=food

[BTinSF]

I pointed this out in the SOMA Grand thread, but I hope nobody is foolish enough to buy into any of these buildings because of the restaurant on the ground floor nor would it be wise for the restauranteurs to count on a lot of business from within the building. My building--Opera Plaza--opened with 3 restaurants: Max's, Modesto Lanzone and Monsoon. Max's is what it is but the other two were high end at the time (DiFi used to lunch regularly at Modesto's). Max's is still there attending to the business lunch and pre-opera/symphony crowd but the other two lasted a few years and moved on (actually, Modesto got into trouble with the IRS and went back to Italy while Monsoon owner Bruce Cost first tried an East Bay location I believe, then went to New York). One issue they encountered was absentee owners--even Opera Plaza has a surprising number of people who own units as pied-a-terres and aren't there much (some of them bed down after going to the opera or symphony so they don't have to drive back to Sillycon Valley). I'm guessing The Infinity, Millenium and ORH will have even more. IF these restaurants last, it will be because they are distinations for diners from all over the Bay Area and the fact that they are in these buildings will be incidental.

[peanut gallery]

Originally Posted by BTinSF

IF these restaurants last, it will be because they are distinations for diners from all over the Bay Area and the fact that they are in these buildings will be incidental.

That's one of the main reasons for bringing in high-profile chefs to run them. The other is more subtle and addresses your first point about buying a place because of the restaurant. It's not as straightforward as saying: "I'm buying because XXX restaurant is in the building." But people are buying into a lifestyle, an image, particularly in the case of a building like Millennium. The finishes, the various services, the private wine tasting room, the high-end wine storage lockers, the big name chef -- these things all enhance the image of luxury and exclusivity. And that, as much as anything, is what people are buying into.

I think the Boulevard crew will do fine at Infinity as well. They were looking for somewhere to open another restaurant anyway. This location -- between the FiDi and Rincon Hill -- seems good to me. And they get the benefit of being in a new landmark, so they can leverage that for a time as well. I don't have an opinion about the other two mentioned in the article, as I don't know those neighborhoods as intimately. But I hope they do well.

[rs913]

Also, having an exclusive restaurant in your building isn't exactly the same as having a deli or convenience store or dry cleaner in your building. The latter really does provide more convenience for residents on a daily basis, but the former is more of an occasional thing, and having it in the building vs. down the street really doesn't make a whole lot of difference (except for Howard Hughes-type "wealthy eccentric shut-in" tenants)

It really is about enhancing the brand name, as peanut gallery notes. Not practicality. But hey, if people will pay more for that, more power to them (the developers, that is)

[MarkSFCA]

What ever happpened to the Home Depot that was supposed to be built on Bayshore Blvd in SF? Remember they got so much press a couple of years ago but now you never hear anything about it. Does anyone know anything about it?

[WildCowboy]

They received their site permit a couple of months ago, but it was appealed by those who don't want to see this project move forward. The appeal hearing is on the 16th.

Link

[MarkSFCA]

Thanks WildCowboy. I hope it gets built. I think that area would be perfect for a Home Depot and I think the other businesses nearby would benefit from the increased traffic since there are many similar type of home improvement shops in the area but they offer other types of brands that Home Depot does not carry.

[peanut gallery]

This Marin Independent Journal article has more details on Kuleto's two new restaurants under construction along the Embarcadero. Looking at some of the prices, I don't think I'll be dropping in for lunch on a regular basis, but the occassional dinner will be in order.

Cuisine Scene: Kuleto serves up two new S.F. restaurants at once
Leslie Harlib
Article Launched: 01/15/2008 09:23:56 PM PST


Waterbar's main players include (from left) Mark Franz of San Anselmo, partner and executive chef; Emily Luchetti of Sausalito, executive pastry chef; Parke Ulrich of Novato, executive chef/partner; and designer/owner Pat Kuleto of Sausalito and Napa. (IJ photo/Leslie Harlib)

In one dazzling swoop, designer and restaurateur Pat Kuleto and his teams of chef/partners will make Rincon Park - a small wedge of land at the base of Folsom Street across the Embarcadero and 20 feet from the bay - the epicenter of fashionable San Francisco dining beginning Jan. 28.

That's when Kuleto's newest restaurants, Waterbar at 399 Embarcadero and Epic Roasthaus at 369 Embarcadero, will open for daily lunch and dinner and weekend brunch after five years under construction.

Sausalito- and Napa-based Kuleto, his Waterbar business partners Mark Franz of San Anselmo, executive chef Parke Ulrich of Novato, Sausalito-based pastry chef and cookbook author Emily Luchetti and managing partner Pete Sittnick of Tiburon, all turned up last Wednesday for a hard-hat preview lunch of raw oysters, shrimp and paella at the seafood restaurant; it was a culinary dress rehearsal. Kuleto's Roasthaus partner, executive chef Jan Birnbaum, was also cooking, dishing up two complex courses at meat-driven Roasthaus as part of the adventure.

The movable feast was a visual one, too, with miles of water and the Bay Bridge feeling touchably close, just beyond both buildings' two-story windows.

In Waterbar, two 20-foot tall cylindrical aquarium pillars had just had their interior shell-covered piers installed. The West Coast fish, representative of local waters and that will inhabit the aquariums, will arrive from Seattle next week. Their more unfortunate cousins, edible fish who will have a brief sojourn swimming in two horizontal fish tanks from which guests can choose them for dinner, will arrive closer to the opening date.

"It feels great," Kuleto said, staring, as everyone did, at the complex world of shells and coral shapes inside the towering saltwater aquarium tubes. "I can't believe these just went in this morning."


A giant metal wheel and exposed metal pipings are a fantasy of industrial, ruggedly masculine chic at Epic Roasthaus, Pat Kuleto s new venture with partner/executive chef Jan Birnbaum. (IJ photo/Leslie Harlib)

Construction dust clung to Roasthaus' giant interior metal wheel and metal and glass pipes that look like something Willie Wonka might have created if he'd turned to meat instead of chocolate. But Birnbaum presented potent steakhouse chow: a prime roast of butter-tender beef presented on the bone. Cauliflower caramelized in ruffly circles under drizzles of truffle oil. Cornbread madeleines and popovers no bigger than marbles. A dessert parfait distinctive for its heart of house-made burnt chocolate ice cream.

The excitement doesn't come cheap. Some dishes at Waterbar start at $75 (there are raw or roasted grand shellfish platters for $90). Epic Roasthaus is also pricey, with wood-fired Liberty duck for $32, 14-ounces of prime rib for $48, a 3Ú4-pound ground-to-order $25 hamburger. It features an extensive bar menu, including skewered brandy-soaked duck gizzards and roasted marrow bones.

But Kuleto and his teams say they're producing accessible, not fancy food. Both establishments will trumpet ingredients-driven cuisine. Meats at Roasthaus will primarily be sourced from sustainable growers including Marin Sun Farms and Devil's Gulch. Seafood at Waterbar will be local or flown in fresh from the Amazon basin.

Celebrating eat rather than being eaten, Kuleto extolled the deliciousness of piranha, one of the more exotic items on Waterbar's menu.

"These days you can get almost anything you want from purveyors," said Ulrich. "And it's amazingly fresh. You can get fish from Sicily that's still in rigor mortis."

For Waterbar reservations and more information, call 284-9922 or go to www.waterbarsf.com; for Epic Roasthaus reservations call 369-9955 or go to www.epicroasthousesf.com.

[peanut gallery]

I just noticed a relavant note on that same page. It mentions that the York Hotel on Sutter will become the Hotel Vertigo and that Food Network's Tyler Florence will open a restaurant within it. Also, if you visit his website, you'll learn that he's a Raconteurs fan (assuming your speakers aren't off).

Mill Valley resident Tyler Florence, celebrity chef, television personality and best-selling cookbook author, has just signed a deal with San Francisco-based Personality Hotels chain to open his first restaurant. It will be in the Hotel Vertigo at 940 Sutter St. - currently the York Hotel. The restaurant's name is still to be determined.

"We're working on it right now," Florence said. "We expect to be open by this summer."

Florence, a trained restaurant chef who has not worked in restaurant kitchens for 11 years, says he went with the Personality Hotels group because it's "the largest boutique hotel group in San Francisco. I think they've really got their fingers on the pulse of what's coming up."

Unlike the home-chef-focused dishes he's become known for on TV and in books, Tyler says his restaurant will offer more ambitious fare.

"What I write about is designed for fantastic entertaining at home," he says. "What we'll serve will be a little more interesting - the best of the best."

[peanut gallery]

Curbed has a couple of notes on new eateries coming soon to the new Mint Plaza. (It's below the brief write-up on Kuleto's twin new joints.)

Basically, it says:

• Blue Bottle will be open within a week (possibly Wednesday)
• Chez Papa should join it in early February
• Dolce Vita (not sure when)
• Limon is rumored as well

This is great news because this is a pleasant little plaza and it just needs a draw to bring the people.

[BTinSF]

^^^There's long been Cafe 36 (I think it is) right around the corner on 5th--they make a very decent felafel sandwich and other such stuff and you could easily take your food to the plaza to eat it.

[peanut gallery]

Thanks, BT. I'll give that place a try.

[BTinSF]

Friday, January 25, 2008
Teriyaki chain plans 40 Bay Area outlets
San Francisco Business Times - by Sarah Duxbury

Makhan Bains is cooking up a Bay Area invasion for a new Japanese fast-casual restaurant.

This week, Made in Japan Teriyaki Experience locations will open in San Francisco and Hayward. A third location will open in Union City this spring. Bains and his franchisees have signed leases for two locations in Fremont and are negotiating on five sites in San Jose and Pleasanton. His goal is to have eight Teriyaki Experiences open in the Bay Area by the end of the year and 40 within six years. If they are successful, Bains, as the area developer, has the option to open up to 102 stores across Northern California, including the Sacramento area.

Canadian-based Teriyaki Experience has been around since 1986, but only opened its first U.S. restaurant in July 2007 under a new president, Nick Veloce. Hayward and San Francisco are the company's second and third U.S. stores, but they are the start of Veloce's plan for a massive U.S. expansion. Teriyaki Experience has signed commitments for 162 U.S. restaurants, with up to 50 of them opening this year. Worldwide, 130 Teriyaki Experiences are already open.

"The U.S. is obviously a very significant market for us, and we feel the timing is right. Our concept is geared to today's fast-paced, health-conscious fast-food consumer," Veloce said. He noted that the down real estate market is also proving a boon to expansion. Veloce wouldn't share revenue figures for the privately held company, but he did say it has seen double-digit growth for each of the past several years, and that growth has come from existing locations as well as new ones.

Teriyaki Experience is a mix between fast-casual and fast food restaurants. The food is cooked fresh in front of the diner and costs more than a meal at McDonald's. It falls squarely into the most robust category in the industry. Fast-casual restaurants saw 14 percent growth in 2006, with sales estimated at $15 billion, compared with just 6 percent growth at U.S. chain restaurants overall, according to Technomic Information Services, a Chicago food research firm.

"It's fast and it's healthy," Bains said of what attracted him to the concept, which uses steam rather than oil to grill the food. "Especially here in the Bay Area, we have very health-conscious people looking for something unique."

Bains is no stranger to the Bay Area restaurant industry. His Raja International operates Indian restaurants in Hayward and Union City, as well as the state's largest Indian food catering company.

"I've been looking for a new concept," he said of the move from Indian cuisine to Japanese and from a home-grown concept to a franchised chain. He said some of his restaurant industry connections are among his first franchisees.

Bains is looking for streetfront, food-court, university and even hospital locations of about 1,500 square feet.

[email protected] / (415) 288-4963

Source: http://www.bizjournals.com/sanfranci...28/story9.html

[peanut gallery]

Sounds great. The SF restaurant will be at 356 Kearny Street, which is easy walking distance for me. I'll have to give it a try. FYI: the first one in the US is in Atlanta.

[Jerry of San Fran]

Waterbar on the San Francisco waterfront - I had occasion to eat at the new Kuleto restaurant last week. The entree did not make sense to me, scallops on a bed of dinosaur kale (I will try anything with the hope it works). Prices are really high for lunch, even for someone, like myself, used to expensive lunches.

The decor is nice, but did not grab me. The architecture is alright to my taste. The view of the Bay Bridge was the most interesting thing to me.

[BTinSF]

Friday, February 29, 2008
Discounter T.J. Maxx to set up shop in S.F.
San Francisco Business Times - by Sarah Duxbury

Whether or not current economic uncertainty gives way to a full-blown recession, San Francisco shoppers will soon have another place to save money.

T.J. Maxx is close to signing its first San Francisco lease for 25,700 square feet at 855 Harrison St., at Fourth Street. The site is currently a Staples, and TJX, the Framingham, Mass.-based parent company to T.J. Maxx and Marshalls, has already moved through the conditional use permitting process with the San Francisco Planning Department.

A spokeswoman for T.J. Maxx declined to comment on the store beyond acknowledging an interest in the area, as the lease is not yet signed.

While many retailers have announced poor sales results and even plans to shutter stores, these are bumper times for the off-price retailer. For the fourth quarter ended Jan. 26, 2008, TJX saw profit leap 45.6 percent to $301.1 million compared with $205.5 million a year ago. Sales grew 7.7 percent to $5.49 billion from $5.1 billion a year ago, and same-store sales rose 4 percent.

"TJX typically performs well in weaker consumer environments ... and their comps in downturns were actually positive," Brian Tunick of JP Morgan wrote in a research note.

The weak performance of department stores -- Nordstrom just announced that its net earnings dropped 8.6 percent from $232 million to $212 million in the fourth quarter -- the closure of stores related to the Macy's-May merger, as well as macroeconomic trends like high gas prices, declining property values and a volatile stock market all make this is a good time for off-price retailers like T.J. Maxx, Marshalls and Ross Stores to shine.

"Everything that's going on is in their favor. That's why (TJX's) earnings are up 45 percent," said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment baking firm based in New York. "People still want branded merchandise, but there's an affordability issue. The consumer has never been under more pressure. And the new thing on the block is apparel inflation. We haven't seen that since 1998."

This will be San Francisco's first T.J. Maxx; there are six others in the Bay Area. TJX also operates a Marshalls on Market Street. The new outlet is slightly smaller than T.J. Maxx's average store of 30,000 square feet.

The site is visible from Interstate 80, a stretch of road over which some 400,000 cars pass daily. T.J. Maxx will have to add windows to the Harrison Street façade to make the structure more street friendly.

Retail West brokered the deal for Staples, which sought someone to take over its lease.

TJX operates 847 T.J. Maxx stores and 776 Marshalls. In the most recent fiscal year, TJX opened 26 T.J. Maxx stores

"They are perfect for this economy," Davidowitz said. "They are a very good operator and they're what the consumer needs now."

[email protected] / (415) 288-4963

Source: http://www.bizjournals.com/sanfranci...ml?t=printable

[BTinSF]

Friday, March 14, 2008
Stonestown welcomes grocer, mulls expansion
San Francisco Business Times - by J.K. Dineen

Stonestown Galleria owner General Growth Properties has signed a lease with grocer Trader Joe's and is exploring a 150,000-square-foot expansion that could include a larger cinema complex, two new freestanding restaurants, and additional retail along 20th Avenue.

Trader Joe's, which will open in 18,000 square feet formerly occupied by Copeland Sports, is looking to be up and running by next fall, according to General Growth senior general manager Richard Forster. The store will be San Francisco's fourth Trader Joe's, with others in North Beach, South of Market, and Laurel Heights.

"Stonestown Galleria is a success even without a market," Forster said. "But one of the trends in our industry is people are attempting to go back to a more neighborhood-friendly sort of tenant mix and part of that includes adding a market. We're going back to our roots as a grocery-anchored shopping center."

Meanwhile, the Chicago-based shopping center REIT has started testing the neighborhood waters to gauge support for a possible expansion. Forster stressed that right now the company has no concrete plans and was probably a year away from filing an application for environmental evaluation, the first step in the city's planning process.

"We have some very interested neighbors who have a vested interest," said Forster. "We want to make sure that they are part of the process and we have run some ideas by them. It's a starting point."

The new construction would likely include bulldozing Stonestown's freestanding two-screen cinema and replacing it with a larger movie complex -- probably six to eight screens -- that would be incorporated into the mall. The new cinema complex would likely be built above parking. In addition, General Growth research has shown a demand for more upscale dining options, and the developer will look at building a pair of 8,000- to 10,000-square-foot restaurants. A row of new exterior stores along the 20th Avenue mall entrance would attempt to "soften" that side of the building while "eliminating the perception that Stonestown is a big box."

The arrival of Trader Joe's will add another destination to the 850,000-square-foot mixed-use center, which is anchored by Nordstrom, Macy's, and Borders Books & Music. The mall was bought by General Growth Properties in 2004.

The proposal will no doubt draw close scrutiny from residents west of Twin Peaks, who suddenly find themselves inundated with development proposals. In December the Business Times reported that Parkmerced's owners Stellar Management and Rockpoint Group are proposing to nearly triple the size of that rental housing enclave to 9,000 units. And in late 2006, San Francisco State University announced a master plan thatwould add roughly 800,000 gross square feet of new academic and support space to the campus by 2020.

District 7 Supervisor Sean Elsbernd, who represents the area west of Twin Peaks, said the Stonestown proposal has to be viewed in the context of neighboring developments. "It's about the cumulative impact on 19th Avenue," he said. "We really need to get a better grasp of how this can work. I understand the mall wants to improve with time, but it sits on California Highway 1 which was built with the population of the 1950s in mind, not 2008."

He added: "It would be nice to have another theater nearby, but not if it's going to take me a half hour to drive there, whereas today it takes five minutes."

Forster said the idea is not to draw more customers to the mall, but to offer more retail and entertainment opportunities to existing customers, who could grocery shop, catch a movie, and buy new sneakers in one outing.

"Adding square footage doesn't necessarily mean you're adding trips," said Forster. "Folks are trying to save trips and time, to do more in one location. The idea is to increase the time they would spend here and the amount of dollars they would spend while they are here."

[email protected] / (415) 288-4971

Source: http://www.bizjournals.com/sanfranci...17/story4.html