The so-called “retail apocalypse” that has struck the nation has forced the owners of the Cochrane Commons shopping center to rethink the last phase of its build-out.
The Morgan Hill Planning Commission on Feb. 11 reviewed conceptual plans for residential units, an assisted living facility and other businesses for the 31-acre remainder of the property open for development. The meeting was only a study session for the proposal, and no formal application has been submitted yet.
Businesses in the shopping center located in northeastern Morgan Hill include Target, Party City, Dick’s Sporting Goods and others. The center is owned by a group that includes Browman Development Company and DiNapoli Capital Partners.
The center was originally approved in 2005, allowing for more than 650,000 square feet of commercial space that included 12 major retail tenants and 50 smaller restaurants and shops in a two-phase build-out. After opening in 2007, the Great Recession hit, forcing Circuit City to close and putting the second phase of the center on hold, said Scott Bohrer of Browman Development Company.
Traditional retail stores have been hit hard due to changing consumer spending habits and the rise of online retailers such as Amazon, with more than 9,300 stores across the country closing in 2019, according to Coresight Research.
As such, Bohrer said it’s been difficult to attract big-name retailers to the center since the recession hit.
“We have approvals for 350,000 square feet for an additional shopping center that we can build today,” he said. “Despite marketing it, the interest just hasn’t been there. The population growth hasn’t been there. We’ve really struggled, and our existing tenants have really struggled as well.”
The city approved a General Plan amendment in 2016 for a 14-acre portion of the property that allows the developer to add residential units, at 24 units per acre.
The owners submitted their initial plans to the city for review in 2019, and have begun holding a number of outreach meetings to inform residents of the project.
“The last thing we want to do is deliver a shopping center driven by consumer traffic that no one wants to go to,” he said. “We are fishing for ideas, trying to understand what is going to be meaningful for the community members of Morgan Hill, especially the neighborhoods surrounding this.”
Bohrer noted that one of the goals of the new “mixed-use” plans is to increase walkability amongst the entire center.
He added that consumers today are looking for experiential retail, restaurants and other service-based businesses, which they cannot find online.
As a result, Cochrane Commons has seen a shift in its focus, attracting lifestyle-oriented tenants such as Club Pilates and the recently-opened Vitality Bowls, according to Bohrer.
“It is a rapidly changing world that we operate in,” he said.
Commissioner Liam Downey said the concept is “exactly what a center like this and a town like this needs,” but he didn’t see the early plans reflecting that.
“You talked it, but you didn’t walk it yet,” he told Bohrer. “If you want to do what you say you’re going to do, you have to make a lot of changes here. It looks like a big residential project right now with some retail on the side.”
Commissioner Laura Gonzalez Escoto echoed Downey, and said it was difficult to create a mixed-use development part of an already-established suburban shopping center.
“It’s not mixed-use flex as much as it should be, and I don’t think the connectivity is there,” she said.