This lot may be a 66-acre major shopping center at Cochrane Road

600,000sf of retail space could jazz up area shopping
Rabbits and burrowing owls living near the old Saint Louise Hospital will have to make other arrangements if plans for a huge shopping center are completed.

The 66.5-acre property on the northeast corner of Cochrane Road and Highway 101, now growing crops and grapevines could be covered with 600,000 square-feet of retail potential if a partnership between the Guglielmos – a Morgan Hill winemaking family since 1925 – JP DiNapoli Companies Inc. of San Jose and Browman Development Company of Oakland, bears fruit.

Plans show space for two “big box” stores, a movie theater, and pads for nine major stores and several smaller shops. Few details are available about which stores exactly the partners are targeting but developer Darryl Browman told the Chamber’s Economic Development Committee on Jan. 20 that a larger Target was in their sights, plus sit-down and fast food restaurants.

John DiNapoli said Thursday that they would like to include a grocery store and would be happy to provide Morgan Hill with its dream stores – Trader Joe’s, Whole Foods or another high-end grocery. No commitments have been made but DiNapoli said he was aware of the South Valley interest in such stores.

“We are diligently pursuing them,” DiNapoli said.

Such a large retail center would have three positive affects, said Mayor Dennis Kennedy: opportunities for new business, more sales taxes for the city and the chance to do more local shopping.

“We’re losing a lot of revenue to other communities,” Kennedy said, “when Morgan Hill residents go to Gilroy or San Jose. If there are more businesses here and if we can capture the revenue, it would help the city’s budget and be a real plus for the community.”

Finance Director Jack Dilles said that retail stores generally pay between $100 and $200 per square foot annually in sales taxes, depending on the type of store. The city gets about 1 percent of that. At 600,000 square-feet, the new center could ante up between $500,000 and $1million, Dilles said, though not every square foot would be retail space.

The expected sales tax revenue for the 2004-05 fiscal year is $4.6 million.

Gene Guglielmo, one of three brothers who carry on their parents’ winemaking tradition, said the project was a long time coming.

“We’ve always wanted to do a joint venture there but it took 30 years for it to make sense,” Guglielmo said. “By joining hands with them (the DiNapolis), we’ll maintain a project that Morgan Hill, our family and the DiNapolis can be proud of.”

At 600,000-square-feet, the Cochrane center – unnamed at this time – would be more than twice the size of Cochrane Plaza across the freeway (275,000-square-feet) or Tennant Station (about 250,000-square-feet).

As always with the introduction of competition, the question of what effect the mega-center will have on older, more established centers. With Cochrane Plaza’s Target store being lured across the freeway and Mervyn’s on shaky ground – stores in other areas are closing after a corporate buyout – the Plaza’s future may be less than secure.

Developers Toeniskoetter and Breeding, Inc. are working on a center directly across Cochrane Road from the Plaza and are also eager to land the specialty groceries.

Tennant Station has recently undergone a major overhaul, returning Safeway to the center and completely refurbishing the movie theater; three more screens are in the offing. Mike LaBarbera, a Tennant Station owner, said he didn’t want to comment on the new center just yet.

Kennedy said the new center will not necessarily have a “negative impact” on the others.

“This is similar to when Kmart moved out (on East Dunne Avenue),” he said. “Home Depot moved in; this may open up possibilities.”

An environmental impact report is in the works and could have a major effect on whether the center is able to proceed. It should be finished in mid-July. At that point the partners will have to weigh the cost and trouble of mitigating the impact on the surrounding residents, animals and plants of traffic, air quality, the loss of prime farmland and the site’s location in the dam inundation area.

The 45-day public comment period opens April 12; residents can see the report and comment at City Hall, the library and on line at

DiNapoli said they are planning to meet with residents of nearby Mission Ranch and Coyote Estates, new communities east of the property, with purchase prices hovering around $1 million each.

The project went to the Architectural Review Board on Feb. 3, for a preliminary review. EIR comment period, 45-day public comment period on April 12 – May 30. on website and at city hall and at the library. mid july ready for certification.

“We’re really excited about the project,” DiNapoli said.

Carol Holzgrafe covers City Hall for The Times. She can be reached by e-mail at [email protected] or phoning (408) 779-4106 Ext. 201.

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