PALO ALTO — Starting in late September, the city plans to charge the developer behind a major overhaul of Edgewood Plaza up to $500 per day if a defunct grocery store at the site is not replaced.
But for a dozen residents who addressed the City Council on Monday, that’s not nearly enough.
“Our neighborhood needs a grocery store,” said Carla Carvalho, who lives on nearby Edgewood Drive. “What we do not need is lip service, which is what we feel that a $500 a day penalty would provide.”
The Fresh Market pulled out of California earlier this year, closing its Palo Alto location on March 13.
Carvalho and others said the city should use as precedent an agreement struck late last year with the developer of the College Terrace Centre project. If the market planned there goes out of business, the developer will have to pay $2,000 per day if it is not replaced within six months.
The call for a stiffer penalty followed City Manager James Keene’s announcement that Sand Hill Property Co. will be fined up to $500 per day, starting on Sept. 30, if The Fresh Market is not replaced.
“That figure is the fee that is currently set by code and is the current maximum that is allowed by the code at this time,” said Keene, noting that the city has received roughly 150 emails on the issue. “There are potentially different remedies or options the council could pursue.”
Keene also addressed rumors that the developer was courting a Target Express and other “non-grocery” retailers to fill the space.
“We want to make it clear that would not be consistent with the requirement for a grocery store and would not be permitted,” he said.
The council approved Sand Hill’s plans to overhaul and add 10 homes to the 1950s-era shopping center in 2012, but with the condition that a 20,600-square-foot grocery store remain at the site indefinitely. Edgewood Plaza was previously home to a Lucky and Albertsons.
Developer representative John Tze told The Daily News earlier this month that 40 national, regional and independent grocers have been contacted. National and regional grocers aren’t interested in the space because it is too small for them, but he is “getting more traction” with the independents.
“I think it’s just a little unrealistic that people think that three or four months after somebody pulls out that you can get somebody for such a large space that easily in a type of use that is so challenging these days,” said Tze, referring to pressure from online delivery services.
Carvalho said she doubted that interest in the site was low.
“We also know that Fresh Market was successful by admission of its management,” she said. “So it is not appropriate to assume that another grocery store would not be similarly successful.”
Resident Robert Smith said he also wants to see another market move into the shopping center, but he isn’t convinced that it will happen. He told the council it should consider other options, including a massive fine, if one can’t be found.
“This should not be considered as an easy thing, something that just kind of happens,” he said. “We have to be realistic, but we also have to hold him as much as we can to his commitments.”
Email Jason Green at jgreen@dailynewsgroup.com; follow him at twitter.com/jgreendailynews.
