Whole Foods confirms lease at Davis Commons

It’s official: Whole Foods has leased the former Borders Books & Music space in the Davis Commons shopping center, and will open a grocery store there sometime in the next 12 to 18 months.

“We have signed the lease, now we have to design our store,” David Lannon, president of Whole Foods Market for Northern California, confirmed Wednesday.

“The store’s entrances will stay where they are now, and we won’t do much to the exterior. We’d like to open in a year or so.”

Lannon said the store will feature a large prepared foods area and lots of “grab-and-go” items.

“We want to take advantage of the large grassy area out in front, and the seating that’s already there,” he said. “We definitely want to increase the amount of bike parking. We’re also talking about potentially doing bicycle delivery, which we already do in some of our other locations.”

The store will have produce, meat, seafood, bakery, cheese, beer, wine and grocery sections, Lannon said.

“But we haven’t designed the store yet. We’re just beginning the process.”

Lannon noted that “Whole Foods has done very well in college communities — Palo Alto and Berkeley in the Bay Area, Ann Arbor in Michigan. … And Davis has such a long-term commitment to organic and natural foods — the Davis Farmers Market has been going for years and, of course, the Davis Food Co-op as well.”

Asked how he expects Whole Foods to fit into a local market that’s already served by quite a few grocery stores, Lannon replied, “This will be a smaller store. We’re expecting to have our share of the market, but we don’t need it to be dominant in the market. We think there’s enough pie to go around.

“Hopefully we can turn some of the shoppers who aren’t currently natural food shoppers into natural food shoppers, and that would help other natural grocers,” he added.

Lannon also mentioned that Whole Foods “didn’t really look at other sites in Davis. When Borders went out of business nationally, we looked at all their locations, and we liked this location a lot.”

As for the long timeline before opening, there’s much to be done to prepare a site for a grocery store, said Mark Friedman, president of Fulcrum Properties, which built and owns Davis Commons.

“Grocery stores are fairly complicated projects — there’s refrigeration, recycling, loading and other aspects to consider,” he said. “It’s more complex than standard retail, and it will take a while to design a store for Davis, and a little longer to get into construction.

“The real story,” Friedman continued, “is that I’m thrilled to get what I think is the premier grocery retailer in the country into a downtown location in Davis. Davis is a city with a very high ‘food IQ.’ Whole Foods has a real appreciation for local-source agriculture and organic food production, and there’s no other retailer that’s done more nationally to disseminate those values to the general public.”

Friedman added that he expects to retain the clothing retailer Gap as a Davis Commons tenant into the foreseeable future. Last month, Gap announced it would close about 180 stores nationally over the next two years.

“I think Gap is happy here,” Friedman said.

But Ben & Jerry’s soon will be gone. Its lease is coming due and “they are not a tenant we plan to renew,” Friedman said.

At the Davis Food Co-op, which operates a 26,000-square-foot store on G Street, within walking distance of Davis Commons, general manager Eric Stromberg wasn’t exactly enthused about the news that Whole Foods is coming to town.

“We always welcome the chance to raise the bar,” he said, but added that he’s concerned the city may have more grocery retailers than the local market can support.

“There are about 25,000 households in Davis, and we’ve already got a number of stores. The city isn’t in desperate need of another grocer. There isn’t a lot of unmet need.”

Stromberg said the Co-op is counting on its local roots and longtime presence in the community.

“We’re going to mark our 40th year in 2012,” he said. “It will also be the International Year of Cooperatives. We plan to do a lot of celebrating.

“And we are going to keep on doing what we’ve been doing: giving back to the community. We do classroom visits on health and nutrition and cooking. We have a 1,200-square-foot teaching kitchen across the street from our store. We do sponsorships and donations; we stay tied in with the community.”

Stromberg draws encouragement from his awareness that Vallerga’s Market in Napa and the Sonoma Market in Sonoma “are local, independent grocers that have done well despite Whole Foods coming in just a few blocks away from their stores. They are both in a fairly saturated market, but they’ve thrived.”

Eric Stille, president of the Nugget Markets, remarked somewhat wistfully that “the one thing that is consistent about the grocery business is that you’ll always have competition.”

“That being said,” Stille added, “competition makes you better. I welcome Whole Foods to the community.”

Stille also observed that having a grocery store go into the former Borders location “does take out a prime sales tax-generating opportunity for the city.”

At one time, Borders was one of the top sales tax producers in Davis. Many items sold at grocery stores are not subject to sales tax.

Dennis DeLano, co-owner of the 12,000-square-foot Westlake Market in West Davis, an independent store that opened last year, declined to comment on the Whole Foods news.

— Reach Jeff Hudson at jhudson@davisenterprise.net or (530) 747-8055.

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Posted by Jeff Hudson on Nov 2 2011.
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