Save Mart set to build in San Leandro Agreement set for new Save

Oakland Tribune, Aug 3, 2007 by Rachel Cohen

SAN LORENZO -- Plans for a new grocery store and town center are under way for the corner of Hesperian Boulevard and Paseo Grande.

The empty 5-acre lot where the original Mervyns department store reigned in the 1950s and 1960s will anchor the new San Lorenzo Town Center with a 52,000-square-foot supermarket. Save Mart Supermarkets, the owner of the Albertsons grocery store about a block north on the east side of Hesperian, has agreed to move its store down the street -- the result of months-long negotiations to get Save Mart to commit to the move by signing a letter of intent with redeveloper Civic Partners.

"The focus for the last couple of months was getting the letter of intent with Save Mart so there was a guarantee they were committed to the project," said Civic Partners development manager Mike Herrero.

The new market will be the same size as a store in Ripon, near Modesto, which several San Lorenzo leaders and county representativestoured in May. The initial lease term is for 25 years, with four five-year renewal options that could extend the term to 45 years, Herrero said.

The store will be called Lucky's, as will the rest of some 70 other Bay Area supermarkets Save Mart purchased from Albertsons in the past year. Lucky's was a popular local brand until Albertsons bought and ended it in 1999.

Herrero added that the rent for the new store is expected to be about 21/2times more than the rent at the current San Lorenzo Albertsons, where, Herrero said, the company pays far below market rate -- about 60 cents per square foot. The details of how much Civic Partners and the county will pay for the acquisition of the property, as well as to whom the rent will be paid, are being discussed.

Save Mart has planned a nine-month period for construction of the new store. Save Mart estimates the store could open in early 2009.

The new grocery store lot is part of 19 acres on both the east and west sides of Hesperian Boulevard that the redevelopment agency assumed control of on Tuesday. The county and Civic Partners now have 90 days -- which started Tuesday -- to negotiate exclusively with each other, and have the option of one 90-day extension.

Fourth District County Supervisor Alice Lai-Bitker said the Board of Supervisors voted unanimously to support the exclusive right to negotiate agreement at its meeting on Tuesday.

"I think this is a major step forward for the San Lorenzo community," she said. "There is still a lot of work to be done between the county and the developers."

This land has been owned by the Bohannon family since the 1940s, when they first developed San Lorenzo farmland into planned neighborhoods, as well as the cherished town center and the Mervyns of mid-century. The Bohannons have agreed to give the county redevelopment agency the exclusive right to negotiate the development contract with Civic Partners and are working out the cost of the land sale.

In addition to the new supermarket, there will be 8,000 square feet of additional retail space and about 82 for-sale market-rate townhomes. Plans also include refurbishing and leasing the existing Albertsons commercial area, as well as making major facade improvements to the remaining retail space, developing a new public plaza (the Village Square), and dedicating about 16,000 square feet for the San Lorenzo Library to use in addition to its current building and parking lot.

Wulf Bieschke, president of the San Lorenzo Village Homes Association and a lifelong San Lorenzan, said, "We're more than happy for these guys to come in."

He added that residents are looking forward to seeing designs of the sites, seeing where the town square will go and being able to add their comments.

"We're not going to just let them put up square boxes," he said. "We're looking for some architectural designs that we can run by the community."

The Homes Association will have an open work session next week to discuss how to present the new development to the community possibly at a September barbecue.

Rachel Cohen can be reached at (510) 293-2463 or rcohen@dailyreviewonline.com.