Commentary: Trader Joe’s Pronouncement of “Opening in 2008” Ups the Ante

There is “squandered” and then there is “SQUANDERED.” But I’m not sure I’ve ever seen someone this side of John McCain squander anything as badly as Trader Joe’s has squandered their opportunity and the support of the Davis public.

Last fall, Trader Joe’s was the one issue in this rancorous little politically minded town that everyone agreed on. At one point someone claimed that 98% of the public supported Trader Joe’s. I’m not sure exactly where that number came from precisely, but if it wasn’t actually 98%, it was close enough that we knew there was a strong consensus.

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The question wasn’t if but when, Trader Joe’s would come to town and then they would have instant success. However, in a move I can only chalk up to corporate greed, from one of those companies you just don’t expect corporate greed from, Trader Joe’s has frittered this advantage away.

I would still guess a majority of Davisites probably favor Trader Joe’s coming, but there are now some deep-seated questions.

Their fall from grace began with the proposal in October that they would move into the corner location of University Mall on the corner of Sycamore and Russell.

There was just one problem with that plan–that spot was already occupied by Radiological Associates of Sacramento–a clinic that does radiological imaging, with a huge base of clients, many of them not very mobile, who had just sunk in a large amount of money to upgrade their on-site facilities and who had just renewed their lease, and therefore had no desire to leave.

Trader Joe’s it was said would only move into that spot and not into the vacant Westlake Shopping Center or Davis Manor locations.

Not to be deterred from their ambitions, the Davis City Council decided to change the zoning on the corner that would facilitate Trader Joe’s coming, even though a zoning change was not completely necessary, nevertheless the council was holding out the welcome mat. Then they stepped back to let the landlords finish their deal with RAS, which at that time was said to be just a formality.

The next we hear about this deal however is that the landlord is suing RAS.

At that point, I personally became alarmed, but was assured by one of the members on the council that it won’t matter to the community, they simply want a Trader Joe’s. The councilmember was flat wrong. What they forgot is that people have a particular adhorrence to lawsuits. They view them as unkempt and unnecessary. Moreover, the sympathetic partner is usually the smaller company who is being uprooted by the larger corporation. You have to have an open and shut case of being fundamentally wronged for people to be supportive of lawsuits.

What was the beginning of the shift. Suddenly 98% approval had been turned on its head. Large numbers of people began to openly question why this spot when we have open spots in Davis.

Still I think many people blamed the Santa Monica based landlord Centro Watt, who was the party that filed the lawsuit against RAS rather than Trader Joe’s for this mess. No doubt, Trader Joe’s insistence on this spot and only this spot was driving people to question their intentions.

And frankly I have always questioned this spot. First, Trader Joe’s could put their store in the middle of Oeste Ranch, and people from Davis would come in the same numbers. Second, you have severe parking issues at University Mall. Third, you have the Alford Hitchcock-esque problem with The Crows. And fourth, you are adding a huge draw to that mall which is right in the middle of the most heavily congested traffic spots in Davis between Sycamore and Anderson on Russell Blvd. Now you are going to add a store that will bring in a ton of customers without an infrastructure upgrade.

West Lake or Davis Manor just makes much more sense than University Mall. Nevertheless a lease was signed in March, even without RAS agreeing to a move.

As I said, all of these issues aside, I think most people still supported Trader Joe’s, but may have questioned their insistence on that particular location.

However, on Thursday came out the story from Claire St. John in the Davis Enterprise that Trader Joe’s has sent out press releases announcing:

“Trader Joe’s is coming to Davis! We are scheduled to open on the North East Corner of Russell/Sycamore. The store is scheduled to open in 2008.”

Now that is very interesting. For as the paper goes on to report, nothing has changed with regards to the lawsuit.

The e-mail comes at a time when a lawsuit filed by Centro Watt against RAS has yet to be resolved and nothing indicates that anything has changed between the two parties.

Attorneys for RAS said they were surprised that Trader Joe’s would jump into the mix, especially since its information seemed to be incorrect.

“In prior correspondence, the landlord’s attorney said the landlord would like to relocate RAS in either ‘spring or summer of 2009′ or ‘upon expiration of the term’ of RAS’ current lease, which is on April 30, 2010,” attorney Michael Chase wrote in an e-mail. “It is our position that Davis Imaging will be staying at its current site and servicing the Davis community.”

First of all, I think RAS has a pretty good chance of prevailing in this lawsuit. But that is almost secondary to the second point and that has to do with the speed of the legal system. It’s already July of 2007. If the lawsuit proceeds, we will be lucky if it is resolved by the end of 2008. It certainly would not be resolved in time for Trader Joe’s to do all of the massive changes that they are proposing and be able to open in 2008.

All of that leads me once again to question what Trader Joe’s is trying to do. Are they trying to brow-beat or intimidate RAS into moving? Do they expect the public in Davis that is at times very fickle is going to be supportive of this.

Frankly this move strikes as sheer arrogance on the part of Trader Joe’s. Now this is Trader Joe’s acting, not just some out of area landlord. They don’t have Centro Watt running interference for them now, they are naked and exposed and many are not liking what they are seeing.

This entire ordeal is changing my view on whether or not I want Trader Joe’s at all.

Meanwhile the Davis City Council is continuing to allow West Lake Shopping Center rot and hanging all of the other businesses out to dry with no anchor. It has been over a year since Food Fair left and amazingly all of the other entities have survived, but for how long? I’m sure people on the east side of town are saying the same about the Davis Manor.

I think the city council made a colossal mistake by signing off on a zoning change before a deal was struck, they now have no leverage at all. Davis was the perfect market for Trader Joe’s. We didn’t have to attract them, they had to sell us. And we blew it. Now this is a mess and Trader Joe’s tactics are going to backfire big time.

—Doug Paul Davis reporting

Author

  • David Greenwald

    Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

Categories:

Land Use/Open Space

160 comments

  1. This is all part of the negotiation process. By clarifying its position, Trader Joes helps motivate a deal to be struck between RAS and the landlord (Centro Watt). The only thing preventing RAS from moving is adequate compensation. If anything, the Trader Joes announcement provides RAS with more cards to negotiate with – the landlord is being forced to clear the space rather quickly. Perhaps RAS should move to West Davis since there is vacant space over there.

    As for the crows – they are systematically shooting crows in Asia because crows carry influenza. Something to think about the next time you go to Starbucks, which is where I am going right now.SAH

  2. This is all part of the negotiation process. By clarifying its position, Trader Joes helps motivate a deal to be struck between RAS and the landlord (Centro Watt). The only thing preventing RAS from moving is adequate compensation. If anything, the Trader Joes announcement provides RAS with more cards to negotiate with – the landlord is being forced to clear the space rather quickly. Perhaps RAS should move to West Davis since there is vacant space over there.

    As for the crows – they are systematically shooting crows in Asia because crows carry influenza. Something to think about the next time you go to Starbucks, which is where I am going right now.SAH

  3. This is all part of the negotiation process. By clarifying its position, Trader Joes helps motivate a deal to be struck between RAS and the landlord (Centro Watt). The only thing preventing RAS from moving is adequate compensation. If anything, the Trader Joes announcement provides RAS with more cards to negotiate with – the landlord is being forced to clear the space rather quickly. Perhaps RAS should move to West Davis since there is vacant space over there.

    As for the crows – they are systematically shooting crows in Asia because crows carry influenza. Something to think about the next time you go to Starbucks, which is where I am going right now.SAH

  4. This is all part of the negotiation process. By clarifying its position, Trader Joes helps motivate a deal to be struck between RAS and the landlord (Centro Watt). The only thing preventing RAS from moving is adequate compensation. If anything, the Trader Joes announcement provides RAS with more cards to negotiate with – the landlord is being forced to clear the space rather quickly. Perhaps RAS should move to West Davis since there is vacant space over there.

    As for the crows – they are systematically shooting crows in Asia because crows carry influenza. Something to think about the next time you go to Starbucks, which is where I am going right now.SAH

  5. There will, in all probability, be a settlement before the trial with RAS being offered “incentives” to move(as long as they are not too onorous to the landlord) What this settlement finally comes down to will depend on both the legal merits of the arguments AND who has had control of the narrative offered to the public. RAS has clearly dominated this public narrative recently and Trader Joe’s(to strengthen the landlord’s negotiating position) is trying to get the public’s attention, “We’re coming to Davis in 2008!”

  6. There will, in all probability, be a settlement before the trial with RAS being offered “incentives” to move(as long as they are not too onorous to the landlord) What this settlement finally comes down to will depend on both the legal merits of the arguments AND who has had control of the narrative offered to the public. RAS has clearly dominated this public narrative recently and Trader Joe’s(to strengthen the landlord’s negotiating position) is trying to get the public’s attention, “We’re coming to Davis in 2008!”

  7. There will, in all probability, be a settlement before the trial with RAS being offered “incentives” to move(as long as they are not too onorous to the landlord) What this settlement finally comes down to will depend on both the legal merits of the arguments AND who has had control of the narrative offered to the public. RAS has clearly dominated this public narrative recently and Trader Joe’s(to strengthen the landlord’s negotiating position) is trying to get the public’s attention, “We’re coming to Davis in 2008!”

  8. There will, in all probability, be a settlement before the trial with RAS being offered “incentives” to move(as long as they are not too onorous to the landlord) What this settlement finally comes down to will depend on both the legal merits of the arguments AND who has had control of the narrative offered to the public. RAS has clearly dominated this public narrative recently and Trader Joe’s(to strengthen the landlord’s negotiating position) is trying to get the public’s attention, “We’re coming to Davis in 2008!”

  9. According to one of our council members, Trader Joes prefers more central locations, so did not like the Westlake site at all. They were somewhat interested in the Manor site however. I believe the council gave in much too easily. We want Trader Joes, but not at any price, I would hope. And Trader Joes wants to come here. I believe if the council had had any backbone, they could have gotten Trader Joes to go to the Manor site. Now, everything is a mess. I do not want to see Radiological Associates have to move. University Mall is absolutely not the right place for TJs for many reasons.

    I, for one, will not shop at TJs if they insist on University Mall.

  10. According to one of our council members, Trader Joes prefers more central locations, so did not like the Westlake site at all. They were somewhat interested in the Manor site however. I believe the council gave in much too easily. We want Trader Joes, but not at any price, I would hope. And Trader Joes wants to come here. I believe if the council had had any backbone, they could have gotten Trader Joes to go to the Manor site. Now, everything is a mess. I do not want to see Radiological Associates have to move. University Mall is absolutely not the right place for TJs for many reasons.

    I, for one, will not shop at TJs if they insist on University Mall.

  11. According to one of our council members, Trader Joes prefers more central locations, so did not like the Westlake site at all. They were somewhat interested in the Manor site however. I believe the council gave in much too easily. We want Trader Joes, but not at any price, I would hope. And Trader Joes wants to come here. I believe if the council had had any backbone, they could have gotten Trader Joes to go to the Manor site. Now, everything is a mess. I do not want to see Radiological Associates have to move. University Mall is absolutely not the right place for TJs for many reasons.

    I, for one, will not shop at TJs if they insist on University Mall.

  12. According to one of our council members, Trader Joes prefers more central locations, so did not like the Westlake site at all. They were somewhat interested in the Manor site however. I believe the council gave in much too easily. We want Trader Joes, but not at any price, I would hope. And Trader Joes wants to come here. I believe if the council had had any backbone, they could have gotten Trader Joes to go to the Manor site. Now, everything is a mess. I do not want to see Radiological Associates have to move. University Mall is absolutely not the right place for TJs for many reasons.

    I, for one, will not shop at TJs if they insist on University Mall.

  13. I welcome Trader Joe’s at any appropriately zoned site in Davis that doesn’t currently have a grocery store. I would have particularly loved to see them at Davis Manor or Westlake, or at the proposed Mace Ranch shopping center. I know that City Staff has tried to interest them in these sites.

    But Trader Joe’s has done their analysis, and is quite firm in their decision.. Where they locate is between them and their prospective landlords. I believe that most Davis residents very much want to have them in town, and don’t want to see them go to Woodland or Dixon.

    The University Mall landlord has stated that their lease allows them to move RAS to another spot in the mall, and that they will spend their own money replicating the expensive tenant improvements made by RAS. RAS, with their high-powered lawyer, has not rebutted these statements by their landlord.

    University Mall is a good site. That neighborhood is currently without a grocery store, and has the highest density of housing in the City. I also believe that Mall is vulnerable. I love having Gottshalk’s there, but I have read that Gottshalk’s could be bought out by Walmart. Without their anchor, they the mall could be in trouble as they wer a few years ago.

    The mall owners bought the Mall with the understanding that Davis would not zone for big box retail. The council majority’s decision to approve Target has put a lot of retailers and commercial landlords in a difficult spot.

    I know of three local independent merchants who have served us for almost 60 years, and have lost their leases recently due to either the tearing down of their buildings for larger projects or excessively high downtown rents. Unlike Radiological Associates, tenants were not offered the option to be relocate nearby at the landord’s expense.

    There are many, many small local merchants in Davis who are currently loosing their livelihood do to evictions and higher retail rents. RAS seems to be among the more fortunate of businesses in this regard.

  14. I welcome Trader Joe’s at any appropriately zoned site in Davis that doesn’t currently have a grocery store. I would have particularly loved to see them at Davis Manor or Westlake, or at the proposed Mace Ranch shopping center. I know that City Staff has tried to interest them in these sites.

    But Trader Joe’s has done their analysis, and is quite firm in their decision.. Where they locate is between them and their prospective landlords. I believe that most Davis residents very much want to have them in town, and don’t want to see them go to Woodland or Dixon.

    The University Mall landlord has stated that their lease allows them to move RAS to another spot in the mall, and that they will spend their own money replicating the expensive tenant improvements made by RAS. RAS, with their high-powered lawyer, has not rebutted these statements by their landlord.

    University Mall is a good site. That neighborhood is currently without a grocery store, and has the highest density of housing in the City. I also believe that Mall is vulnerable. I love having Gottshalk’s there, but I have read that Gottshalk’s could be bought out by Walmart. Without their anchor, they the mall could be in trouble as they wer a few years ago.

    The mall owners bought the Mall with the understanding that Davis would not zone for big box retail. The council majority’s decision to approve Target has put a lot of retailers and commercial landlords in a difficult spot.

    I know of three local independent merchants who have served us for almost 60 years, and have lost their leases recently due to either the tearing down of their buildings for larger projects or excessively high downtown rents. Unlike Radiological Associates, tenants were not offered the option to be relocate nearby at the landord’s expense.

    There are many, many small local merchants in Davis who are currently loosing their livelihood do to evictions and higher retail rents. RAS seems to be among the more fortunate of businesses in this regard.

  15. I welcome Trader Joe’s at any appropriately zoned site in Davis that doesn’t currently have a grocery store. I would have particularly loved to see them at Davis Manor or Westlake, or at the proposed Mace Ranch shopping center. I know that City Staff has tried to interest them in these sites.

    But Trader Joe’s has done their analysis, and is quite firm in their decision.. Where they locate is between them and their prospective landlords. I believe that most Davis residents very much want to have them in town, and don’t want to see them go to Woodland or Dixon.

    The University Mall landlord has stated that their lease allows them to move RAS to another spot in the mall, and that they will spend their own money replicating the expensive tenant improvements made by RAS. RAS, with their high-powered lawyer, has not rebutted these statements by their landlord.

    University Mall is a good site. That neighborhood is currently without a grocery store, and has the highest density of housing in the City. I also believe that Mall is vulnerable. I love having Gottshalk’s there, but I have read that Gottshalk’s could be bought out by Walmart. Without their anchor, they the mall could be in trouble as they wer a few years ago.

    The mall owners bought the Mall with the understanding that Davis would not zone for big box retail. The council majority’s decision to approve Target has put a lot of retailers and commercial landlords in a difficult spot.

    I know of three local independent merchants who have served us for almost 60 years, and have lost their leases recently due to either the tearing down of their buildings for larger projects or excessively high downtown rents. Unlike Radiological Associates, tenants were not offered the option to be relocate nearby at the landord’s expense.

    There are many, many small local merchants in Davis who are currently loosing their livelihood do to evictions and higher retail rents. RAS seems to be among the more fortunate of businesses in this regard.

  16. I welcome Trader Joe’s at any appropriately zoned site in Davis that doesn’t currently have a grocery store. I would have particularly loved to see them at Davis Manor or Westlake, or at the proposed Mace Ranch shopping center. I know that City Staff has tried to interest them in these sites.

    But Trader Joe’s has done their analysis, and is quite firm in their decision.. Where they locate is between them and their prospective landlords. I believe that most Davis residents very much want to have them in town, and don’t want to see them go to Woodland or Dixon.

    The University Mall landlord has stated that their lease allows them to move RAS to another spot in the mall, and that they will spend their own money replicating the expensive tenant improvements made by RAS. RAS, with their high-powered lawyer, has not rebutted these statements by their landlord.

    University Mall is a good site. That neighborhood is currently without a grocery store, and has the highest density of housing in the City. I also believe that Mall is vulnerable. I love having Gottshalk’s there, but I have read that Gottshalk’s could be bought out by Walmart. Without their anchor, they the mall could be in trouble as they wer a few years ago.

    The mall owners bought the Mall with the understanding that Davis would not zone for big box retail. The council majority’s decision to approve Target has put a lot of retailers and commercial landlords in a difficult spot.

    I know of three local independent merchants who have served us for almost 60 years, and have lost their leases recently due to either the tearing down of their buildings for larger projects or excessively high downtown rents. Unlike Radiological Associates, tenants were not offered the option to be relocate nearby at the landord’s expense.

    There are many, many small local merchants in Davis who are currently loosing their livelihood do to evictions and higher retail rents. RAS seems to be among the more fortunate of businesses in this regard.