It has been over six years since “Blue Light Specials” could be found gracing the Kmart on Clayton Road in Concord. Since then, the property, which includes a large parking lot, has stood virtually empty.
A similar fate threatens the once prosperous Sun Valley Mall on the other side of Concord. Unoccupied slots provide space for declining traffic at anchor stores J.C. Penney and Sears, filling the landscape.
With internet reseller business growing larger each year, it is getting more difficult to find tenants for large facilities such as this. Throughout the East Bay and the entire Bay Area can be found similar examples of failing retail.
This same trend can be found in San Francisco. Nordstrom closed three years ago. Once crowded, Macy’s is a shadow of its former self.
Exclusive designer venues have closed due to less consumer traffic, shoplifting, and a large homeless population in the Union Square area.
San Francisco Centre mall is closed.
Fickle consumers in the East Bay prefer to shop close to home. They want to use their cars rather than utilize BART to reach upscale shopping destinations. The fading allure of traveling to San Francisco is dissipating consumer demand.
Does this mean that with the increasing power of Amazon and other internet sellers, retail is dead? Hardly!
In San Francisco, crowded Stonestown Mall in the southern side of town has never been busier. Boutique stores that closed at and around Union Square can be found there. Plans are underway to convert a failing movie theater to become much-needed housing. The place is booming.
Brookfield Properties, which presided over the closing of Nordstrom on Market Street, operates Stonestown. In the East Bay, another division is trying to develop the multi-billion-dollar Concord Naval Weapons Depot.
Despite occupancy problems at large malls such as Sun Valley and Hilltop in Richmond, other venues continue to prosper. Business has never been better at big-box stores Costco and Walmart.
Occupancy at retail outlets in downtown Pleasant Hill, the Veranda in Concord, and downtown Walnut Creek continues to be full. Similar success can be found along the 680 corridor all the way to Pleasanton.
Despite the allure of internet shopping, consumers still like to frequent brick-and-mortar establishments where they can view merchandise they wish to purchase. At the same time, these businesses have a strong online presence to meet the demands of their clientele.
Josh Roden, President of NorCal Brookfield Residential, domiciled in San Ramon, is keenly aware of this. In formulating plans for the proposed Concord Naval Weapons Station development, he says, “It is important that we include housing, retail, and business interests into this project to reflect the needs of the community.”
A similar perspective is held by Concord Mayor Laura Nakamura as she addresses the necessity for additional housing and changing buying trends in the retail sector.
She says, “As part of our Affirmatively Fair Housing (AFFH) Overlay District, several unoccupied or underutilized retail spaces—including sites such as the former Kmart—are receiving residential zoning overlays. This allows for high-density housing (up to 60 units per acre).”
Nakamura concludes, “It is a win for local government because they can meet state mandates for building new housing that meets quotas for affordable units. At the same time, existing property tax revenues can be maintained or even increased.”
What lies ahead is yet to be determined. Former Walnut Creek Mayor and prominent real estate developer Merle Hall cautions about government overregulation of retail and housing.
He says, “If you look for the highest and best use for land, that is a market function. But if you are using the land in a way that doesn’t make economic sense, it doesn’t change the value of the land—it means you need to stop what you are doing and do something else.”
One thing is certain: the evolution of the needs of housing and retail will continue to be a topic of change in the near future.
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