Construction on new Target store begins
Wednesday’s groundbreaking for the first phase of the Alameda Landing development was a party that city leaders have been waiting more than seven years to hold. They and Landing developer Catellus greeted the pending arrival of a new Target-anchored shopping center and hundreds of new homes with an impromptu food truck buffet and white-clothed tables festooned with tiny plastic construction hats spread out across a vacant lot.
“This is really great for the city, not only in terms of tax revenue, but – we’re getting started out here,” Mayor Marie Gilmore said as she waited in line for lunch amid an enthusiastic crowd of city leaders and staff and the developers’ representatives. “How exciting is that?”
Plans for the 72-acre site stalled with the nation’s sour economy, as Catellus was bought and then sold and anxious city leaders pressed for progress. But the economy is showing fresh signs of life. Developers said Wednesday that they expect a much-hoped for Target to be open for business in October 2013 – in time for Alameda’s annual Halloween candy rush.
That 139,000-square-foot Target store will anchor a 23-acre, 291,000-square-foot shopping center that over the coming months will rise from the ashes of a former Naval supply center behind the Posey Tube. And the model homes for a new housing development of up to 270 homes may be open for viewing in early 2014. (The company is holding off on plans for up to 400,000 square feet of office space as the market for office space recovers.)
“I think we’re starting to see signs of improvement in the market,” said Jeffrey D. Frankel, vice president and division manager of TRI Pointe Homes, which will build the residential portion of the Alameda Landing development. “It’s the right time to get things going.”
Frankel said he hopes to have early development plans in city staffers’ hands within the next 60 days.
Catellus’s Sean Whiskeman said the developer is talking to other retailers and restaurant owners about setting up shop at the new retail center, though he said it’s too soon to announce any names.
“The interest has been very strong,” said Whiskeman, Catellus’s first vice president.
The commencement of the project is good news for city leaders who have waited years for this day to come. City staffer expect the new Target to haul in $300,000 in annual sales tax revenues at a time when the city is facing chronic budget deficits, and the development is expected to bring hundreds of construction and retail jobs.
It also lifts a huge potential liability off the city’s shoulders. The city fronted the $1.8 million bill for cleaning up a fire that destroyed a vacant building at the site in 2009, along with a $3.2 million loan to help build Wilver “Willie” Stargell Avenue, though that’s money the city will be getting back, said Debbie Potter, the city's development services manager for Alameda Landing.
Plans for homes and retail development on the site were introduced in 2005, and approvals secured in 2006 and 2007. But a crippling recession that brought housing development to a standstill and slowed retail and office development put Alameda Landing on hold, and Clif Bar, which had planned to relocate there, went elsewhere. (Catellus completed the Bayport housing development, which sits adjacent to the Alameda Landing site, in 2009.)
But warehouse giant ProLogis’s decision to sell Catellus to TPG Capital LP helped refocus Catellus’s effort to develop the property, Whiskeman acknowledged.
“Alameda Landing is a key portfolio project for us and we’re just excited to get going,” he said.
Meanwhile, the city retained the right to direct up to $35.5 million in future property taxes toward development of the $103 million project in the wake of a court decision that eliminated the state’s redevelopment program, which granted locals the power to divert property tax money into such projects.
And the economy has shown some signs of life. Statistics released by the Commerce Department on Tuesday showed that June’s housing starts were the highest since October 2008, while DataQuick reported that the Bay Area’s median home prices are the highest they have been since August of that year.
Retail sales have been falling in recent months, though Whiskeman said retail development has picked up over the last six to 12 months. Gilmore said she’s hopeful the arrival of Target will trim Alameda’s widespread retail sales leakage by giving local residents a fresh local option for purchasing the goods the store sells.
Gilmore said Wednesday that it “seems like forever” since Catellus and city leaders embarked on efforts to develop Alameda Landing. But as part of Wednesday’s event, the developer began demolition of two abandoned buildings that stand where Target is set to go.
“This is truly a happy day,” she said.