Objective Analysis of the Loch Lomond Marina Development

Report outline

The purpose of this report is to outline the issues pertaining to and affecting the proposed development of the Loch Lomond Marina parcel, and to point out deficiencies and errors in the thought process governing the planning process. Currently the plan is to eliminate current retail facilities to make way for future housing without adequate thought being given to the logic of their current placement.

Additionally, the very viability of the current Supermarket-Bruno's- is being challenged based on naïve studies and preconceptions which fit the property owner's viewpoint.

The ability of this market to not only survive, but thrive, is abundantly evident when the facts are viewed in the light of day and other venues with similar statistics are brought into the equation.

Considerations of Market size and Store size

In addition to the approximately 2,500 households to the east of San Rafael High School, a supermarket at the Loch Lomond Marina has a customer base which reaches in the other direction to the west, north, and south. The annual income of the households to the east guarantees an additional income from a clientele which maintains these homes,

engaging in new construction, remodeling, and daily maintenance. Furthermore, there is an active base from fishing as well as hundreds of daytime visitors to both Mcnear's Beach which attracts visitors from all over the Bay Area and Nationally recognized China Camp State Park.

The existing supermarkets to the west of the proposed development have been and will continue to be additional sources of additional revenue and as congestion at the hub of Highway 101 continues to degenerate, this well run, full service market will continue to become the attractive alternative.

Three store formats can be analized for their merit and relative potential.

Option 1. Build a new full service supermarket of 12,000 to 15,000 square feet.

Based on a per capita income of over $100,000, a new store must cater to this clientele and it's particular needs. Such a store would cost approximately three million dollars to construct, based on current construction costs and what was spent by other independent markets in Marin County such as Paradise Foods and Woodlands Market.

The competition from neighbors Whole Foods and Trader Joe's would nessesitate the additional expenditure of at least one million dollars over the first few years to establish an entity capable of competing adequately in this market arena.

Option 2. Build a smaller format supermarket of 5,000 to 7,000 square feet.

A smaller store means a smaller selection.With a clientele already determined to have high standards, reducing their choices would serve only to drive them to other markets which can fullfill all of their needs. Savings on construction costs is negligable as most costs are the same or close no matter what the square footage is. The only real tangible savings is in the cost of the inventory, a relatively insignificant sum. The result would be a multimillion dollar convenience store- hardly the goal of anyone concerned.

Option 3. Maintain and improve the existing supermarket.

Bruno's in it's current incarnation is already pursuing a path similar to it's fellow independants in Marin County, Woodlands Market and Paradise Foods. In the past two years Bruno's has undergone a radical change and the results have been tangible. Enthusiasm amongst the clientele has been impressive and the financial increases are many times the national trend. An additional outlay of around half a million dollars will elevate the profile of the store and aim it towards it's target goal of twelve million dollars annually. Such sales will also translate to an impressive rent based on these annual sales.

Analysis of the Sedway study

Any discussion of Lyn Sedway's study must include the admonition that her study was guided by and paid for by the developer and conclusions reached are most certainly influenced by these facts. That being said, it is evident that the study looks at national trends and completely ignores the peculiar sets of circumstances present not only in California, but more particularly, Marin County. Local examples cited are not appropriate monikers whereas obvious examples are conveniently ignored.

Example 1. Woodlands Market

Having been purchased by the current owner in 1986, this store has grown from two million dollars in annual sales to twenty five million in 2005. A major remodel and expansion to it's current 16,000 square feet perpetuated this impressive nine year period of growth.

Example 2. Paradise Foods

This basically new store opened in 2001 and has grown from approximately four million in annual sales to a current thirteen million. With the landlord searching for a potential tenant for seven years, the owner took a major gamble in entering into this enterprise, but realized the potential and acted on it.

Example 3. Scotty's Market

Three generations of grocers have run this enterprise. Recent remodeling has helped to grow the business from five million to nine million dollars in the last five years. With a square footage of 11,000 square feet, they are obviously space constrained, nonetheless, the growth is impressive

Impressive growth is not limited to these markets, stores such as Mollie Stone's and Andronico's have made great strides over their previous incarnations. An understanding of the local market and willingness to embrace it are the keys to success. Bruno's has actively been pursuing this path with tangible results.

Past and current restraints affecting the growth of the market.

Despite a clear lease of the “building at 688 Pt. San Pedro Rd. together with the parking lot in the front and west of the building”, and the fact that the tenant has been paying property taxes on the entire 1.8 acre parcel for the past fifteen years, there is a concerted effort by the landlord to violate the terms of the lease and procure a sizable portion of the parking lot based on assertions that the tenant either doesn't use it or doesn't need it. This reasoning completely ignores the fact that a clear lease is in effect. This fact notwithstanding, the need for ample parking is very real. Looking at other successful supermarkets in Marin will illustrate this point. During peak times Woodlands Market often has to resort to a parking attendant and Whole Foods San Rafael has gone to the extreme of tearing down a neighboring building to improve it's parking dilema. As the business at Bruno's continues to flourish, the parking lot will become an asset. To reduce the number of available spaces ignores this growth, hurts the business' ability to thrive, and as previously stated, violates the terms of the lease.

The lease calls for the landlord to maintain the parking lot and landscaping and the tenant pays a monthly maintenance fee as stipulated in the terms. Virtually nothing has been done by the landlord. The parking lot had deteriorated to such a degree that a year and a half ago it became necessary to put a slurry seal on it just to make it continue to be usable and eliminate liability from dangerous potholes and cracks. With a broken sprinkler system and no routine maintenence being performed, the existant plantings had become overgrown and obstacles in their own right. Extensive cleanup and replanting was undertaken by the staff at Bruno's. The landlord has stated that the resurfacing was unnecessary despite much evidence to the contrary, and has flatly refused to contribute financially to any of the aforementioned work.

The sign for Bruno's at the entrance to the parking lot, one of the store's only markers from the street, was removed by the landlord further impeding the ability of the store to thrive.

The proposed restructuring of the entry also has it's own set of problems, making it increasinly difficult for customers and commercial vehicles to enter and exit with their current ease.

Conclusion

With the planned housing development a strong retail component is essential. With Bruno's already in existance it is the logical choice to draw future retail facilities to the development. Giving the new residences a place to shop as well as serving the current customer base will ease congestion to the west at the already overloaded hub around Montecito Plaza and Highway 101. Having full service businesses within walking distance will create even more of a sense of community for the new development.

Richard Williams

2005-07-18T01:38:49

Richard Williams