Over the past months, this column has been reporting who’s coming to town, especially in the new Target Center off of Cochrane Road and U.S. 101. So for this month, I thought I would write about who has expressed interest in the past and decided not to come right this moment. However, before I do that, let’s recap who is coming to town.
Petco, Staples, Circuit City, Chili’s, Red Robin, Sleeptrain, DSW (that’s shoes for the uninformed), Cold Stone Creamery, and Starbucks, to name a few, are going into the Target Center. Gottschalks is still interested. Interestingly enough, Panda Express is also going into the center. How many Panda Expresses can a community support? It appears three is the correct answer. Cochrane Plaza and Tennant Station shopping centers each have one. Speaking of Chinese food, have you tried the recently opened China Palace on Main Avenue near downtown. It took the place of the Mushroom Grill. Anyway, check out the interior decor, it’s upscale Chinese, a nice addition to Morgan Hill.
So which businesses have shown interest in the center, but aren’t coming yet. A few months ago, I reported that Costplus was coming to town. Unfortunately, Costplus has decided to wait. As a company it’s not doing well and it was a corporate decision not to proceed. Not surprising as Pier 1 Imports is also experiencing problems. Another company that initially expressed interest in Morgan Hill was Black Angus Steakhouse. However, after it performed its own market analysis, it decided not to proceed at this time. There are probably not enough roof tops in its trade area. Panera Bakery also decided not to come to Morgan Hill at this time. It appears it’s worried that a new store could impact sales at its Gilroy location. So what does this all mean? It just means there are numerous factors that go into retail location decisions, and timing is an important one. Now as those factors change, so can a company’s decision. While many of these factors are beyond the city’s control, there are some factors we can influence such as development costs, processing, land use, and infrastructure costs. The city and Redevelopment Agency recently committed upwards of $65 million to pay for traffic and sewer improvements which would reduce impact fees by upwards of 75 percent for commercial/industrial businesses looking to locate in specific areas of town. Quite an incentive if you ask me.
Contacting Retailers
So what retailers are wanted in town? Joyce Maskell on my staff recently contacted J. Jill, REI, Talbots, Chico’s, Eddie Bauer, Coldwater Creek, Loehmann’s, and Ann Taylor. Why these stores you ask. Because she likes those stores. How did we know who to contact? We have a Retail Tenant Directory which list nationwide retailers and key contact persons. It’s about three inches thick. Now don’t get too excited because this doesn’t mean they’ll come to town just because we called. However, just having them return our calls is better than it used to be. (It should be noted that the brokers for the center indicated they previously contacted these companies, but were turned down). Our goal is to get retailers to think about Morgan Hill as a future store location, if not now. If the center is highly successful, we’ll get more interest in the future. With regard to the above retailers, we’ve conducted some follow up and sent them market information on Morgan Hill. We’re checking to see if some of them can meet with us in Monterey at the International Council of Shopping Centers (ICSC) regional conference in March. ICSC is a global trade association with more than 65,000 members worldwide. At the conference, we always have a booth which gives us an opportunity to speak to dozens of companies, brokers, and developers involved in the retail industry. This is where we first met face-to-face with the Trader Joe’s representatives.
Sad News
One of the key components of the city’s efforts is the Below Market Rate (BMR) housing program. Lourdes Balderas in my office was responsible for administering the program for many years and helped hundreds of Morgan Hill residents purchase their first home. She recently died after a long bout with cancer. She will be sorely missed by the community and city staff. This column is dedicated to her memory.
Garrett Toy is director of Business Assistance and Housing Services (BAHS) for the City of Morgan Hill. BAHS is responsible for the city’s economic development, redevelopment and affordable housing activities. E-mail him at garrett.toy @morganhill.ca.gov.
