The new Shoe Palace building is pictured under construction at 745 Jarvis Drive on Jan. 10.

Shoe Palace issued a letter to Morgan Hill city officials last week, disputing a recent statement that it would not be moving into its new building currently under construction.

Morgan Hill city staff released information Jan. 7 about the project in response to residents’ concerns about the scope of the building. But just last week, Shoe Palace responded that one of the city’s claims—that the company had decided not to occupy the new building after all—was incorrect.

Located at 745 Jarvis Drive adjacent to Highway 101, the Shoe Palace project consists of a 503,400-square-foot warehouse, office and distribution facility, adjacent to the company’s current headquarters. In recent weeks, crews have raised some of the structure’s massive concrete walls at the construction site, casting a high-profile view for motorists passing by on the freeway just south of the Cochrane Road exit. 

The facility is intended as an expansion of Shoe Palace’s headquarters and distribution capabilities to support its nearly 100 shoe and apparel stores across the western U.S., including in the Gilroy Premium Outlets.

The Jan. 7 statement by the city’s public information office noted that Shoe Palace would not be moving into the new facility, citing a change in business operations, and would instead lease it to other tenants.

However, a letter signed by Shoe Palace CEO George Mersho said the company will be moving into the new building, but noted it may not stay in its current facility.

“While there may not be a need for us to keep both buildings, our plan is to move our operations to the new building, contrary to what was reported in the Morgan Hill Times,” Mersho wrote, referring to a Jan. 17 article in the Times that quoted the information from City Hall.

Mersho went on to describe the company’s charitable efforts, such as its Cause for Cleats event and contributions to the San Francisco 49ers’ Convoy of Hope and Hope for the Holidays giveaways.

“We will continue to find ways to build our presence and trust with you, our community,” he wrote. “While our Shoe Palace family is committed to these efforts, we recognize our need to engage even more and look forward to finding ways to grow our relationship.”

Deputy City Clerk Michelle Bigelow confirmed that the city received the letter from Shoe Palace.

“We appreciate the clarification from Shoe Palace as we work to do our best to share information with the community,” she said. “The information that the city provided previously was our understanding at that time.”

A phone number for Shoe Palace on its website had no dial tone after multiple attempts, and an email to a customer service address was not returned as of press time.

It is unknown why Shoe Palace’s new building is listed available for lease on LoopNet, a website that lists commercial property for sale or lease. According to the listing by Colliers International, the building could be divided into two separate spaces. Lease rates are estimated at $10.80 per square foot per year.

The new facility is expected to hire 100 additional people, for a total of 300 employees, while also increasing truck deliveries from five to eight per day. A total of 56 truck docks are proposed in the plans.

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Erik Chalhoub joined Weeklys as an editor in 2019. Prior to his current position, Chalhoub worked at The Pajaronian in Watsonville for seven years, serving as managing editor from 2014-2019.


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