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Concern Grows about Commercial Vacancies in Downtown Novato

Should the city of Novato revise an ordinance that some believe is too restrictive in this economy?

Commercial property vacancies are not difficult to find in the Bay Area these days, and the situation isn’t any different in Novato. Old Town has its fair share of unleased space, and these spots along Grant Avenue have been gathering spider webs and dust — not just to fall into the Halloween spirit.

On the west side of downtown, the former location of Del Reeno Meats at 1413 Grant Ave. has been vacant for 10 years. This January, the former Pini Ace Hardware site at 1107 Grant Ave. will have been vacant for nine years. (FYI, Pini is in the ninth year of a 20-year lease at the Nave Shopping Center, according to co-owner Chip Young.)

West of Redwood Boulevard, at 881 Grant Ave., the former site of Alain Pinel Realtors has been vacant for more than two years. At 830 Grant Ave., the former site of the Feathered Nest, has been vacant for about two years as well.  

Further complicating matters and standing in the way of potential tenants is a city ordinance that restricts financial institutions from setting up shop on Grant Avenue east of Redwood. The ordinance was put into place (in part) with the good intention of keeping the small-town feel in Old Town while promoting boutique retail establishments. Novato has way more service-oriented businesses — salons, medical offices, banks — in its downtown area than retail/restaurants; the opposite is true in popular downtown districts such as Fourth Street in San Rafael and Kentucky Street/Petaluma Boulevard in Petaluma.

While Novato's downtown ordinance had support at the time, some now question if it is not counterproductive in an economy that is still trying to recover. Wouldn't an occupancy of any kind be better than another "for lease" sign?

The 881 Grant Ave. property, built as a bank on the corner of Machin Avenue and Grant, is particularly impacted by the restriction. It looks suited for anything but retail with the building having been previously occupied by a realty company and, prior to that, a printing company. John Williams, managing director at Sperry Van Ness commercial real estate, said "a prominent financial firm" is interested in the property. But the current ordinance prohibits the that type of company from becoming a street-level tenant on that sector of Grant Avenue. Imagine being the owner of that building, having to say no to a potential tenant.

Local business people say there is little doubt that a “financial institution” in this space should have some residual benefit to the retail merchants in the area. Not only would such a business bring more employees into Old Town, but it would also bring in their customers, both of which have dollars to spend and stomachs to fill. Retailers and restaurants could stand to benefit from a little more foot traffic and perhaps the vacant storefronts would start to fill up again. 

The ordinance issue is expected to be a topic at upcoming city meetings. Several people, including Williams and former Novato Chamber of Commerce president Jerry Peters, have spoken in front of the Novato City Council about the matter.  

How do you feel about the ordinance? Do you think a financial institution should be allowed to occupy 881 Grant Ave.?

Driving through the Bel Marin Keys industrial parks, you will face a visual barrage of “For Lease” signs on every street. We'll take a look at that area in a future column.

Vintage Oaks Shopping Center is bucking the trend with only two vacant spots. Kathy DeOchoa, general manager of Crosspoint Realty, which handles leases at Vintage Oaks, said the shopping center's occupancy rate is 98.3 percent. The former Southern Pacific Smokehouse is to reopen in November as Hopmonk Tavern Novato.

Do you know of a new business opening around town? We want to know! Please contact Tom at tomnovatopatch@gmail.com with all your business tips.

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David Edmondson October 08, 2012 at 07:46 PM
On the one hand, financial institutions like banks deaden streetscapes. Unlike pedestrian-oriented shops and the like, banks negatively impact the pedestrian space and discourage the kind of exciting, walkable life a downtown needs to thrive. On the other hand, vacant storefronts are worse. I think one reason for the poor shape of Novato's downtown is the insistence that commercial development happen outside the city center. If commercial development does occur in the core, zoning requires too much parking, and developers oblige with strip development. That's the opposite of what you want if the goal is to foster a downtown that people walk in.
janna nikkola October 09, 2012 at 02:55 AM
I have never supported the city council's "no banks here" policy with regard to the eastern end of Grant Avenue. The building at 999 Grant Avenue now being built by Circle Bank stood vacant for 10-12 years due to this ridiculous policy. The former building had been built for and by Great Western S&L. When they left, attorneys remodeled the building for their use. When they left, the building stood vacant for 10-12 years. Circle Bank negoiated in good faith with the owner to lease the building but the city council would not allow it. They would only allow banks on the second floors or in the rear of first floor spaces in Old Town. After the building had stood vacant for all those years, Circle Bank was finally successful in purchasing it, so tore down the old building and is now building their new office. If there are financial institutions willing to lease space in Old Town from willing owners, they must be allowed to do so. To disallow such a reasonable transaction borders on restraint of trade which Novato can ill afford. A study about banks on Grant Avenue and in Old Town revealed the #1 reason Novato residents go downtown to Grant Avenue was to do their banking, so banks DO generate foot traffic. Banks are also more stable tenants as they often do feasibility studies to support their decision to move into an area, so once they move in they tend to stay. Banks also provide stable, good-paying jobs for Novato residents.
Michaelb October 09, 2012 at 01:25 PM
This doesn't surprise me considering all of the other mistakes our City council has overseen. I have a friend who was interested in the old butcher shop and was turned down because it didn't fit the requirements. This is odd considering every other retail space is either a nail or hair salon. Novato needs to forget about this "Old Town Red Barn image" and reinvent itself. Take a look at Los Gatos, they kept a feeling of history and they are thriving. This idea that everything needs to be painted red and kept with this certain look is about as outdated at the council's taste. I cannot wait to see how things look five years from now.
LP October 09, 2012 at 02:44 PM
When my kids were young I used to go to Tilly's coffee house all the time. The had a little area set up for kids so it was very comfortable to sit at and then walk around the shops. The only coffee houses now anchor Grant (Dr. Insomnia's & Peet's). It doesn't promote going farther into the block. As for the Old Butcher shop it just needs to be torn down. From what I've heard the people who look at say it is in need of many repairs, none of which the landlord is about to do.
Mark Burnham October 09, 2012 at 03:15 PM
LP .. I would put to you that there are far more options downtown than when Tilly's occupied the Grazie space. In the middle of the block there is now Grazies and Flour Chyld bakery. Both are located with bulb out sidewalks in front and provide ample space to bring kids downtown. Five Little Monkeys Toy Store is smack dab in the middle of the block and across the street from that are a whole row of family friendly establishments: All Seasons Soccer, Old Town Sports, Pinnacle Dive Shop (yes for kids too), Finnegan's, & Powells Candy Shop. Never have there been more options for kids and families in downtown Novato.
Jay Strauss October 09, 2012 at 03:42 PM
To demonstrate how absurd our downtown zoning ordinance is, consider the following. A nationally known financial services company based in Novato wanted to move into the long vacant space on Grant at Machin (near the new city hall). The existing ordinance prohibited it. However, the existing ordinance allows "personal services" a defined category of use under our zoning code, which is expressly defined as including palm reading and fortune telling. This was merely a joke until a palm reading establishment recently opened up on nearby Grant!!!!!!! I do not know who was on the city council when this ordinance was enacted, but they were asleep. Its time to change the way business is done in this town. Grant Street is languishing, yet we as a community don't seem to have the time or inclination to do anything about it. We cling to outdated concepts about what a "small town" should look like. Commercial vitality is not inconsistent with a "small town" character. Look at cities like Mill Valley and Lafayette, which have much smaller populations than Novato, yet have vital downtowns. It can be done here if only we had the vision and will.
Morris & Company October 09, 2012 at 04:09 PM
"Main Street Revitalization" articles, clearly state that "clustering boutique style retail, & restaurants" creates pedestrian friendly SUCCESSFUL small downtowns. In our core "shopping district" we have too many "service" businesses (nail & hair salons, answering service, now 2 Palm Readers on the same block) -in Prime Retail spaces, that STOP the desire to STROLL. The "Service" % now out ways the retail !! Having a new retail boutique next door to a clothing shop, we now "share" customers/shoppers. We need to learn or pay attention to other cities such as Sonoma, Healdsburg, San Anselmo, & Petaluma--CLUSTERING is the key to success. I'm concerned that this Recession may cause the City to consider changes (in desperation to appease a few building owners) in the zoning code that will be detrimental to the future of our little Main Street. Perhaps lowering the rent & an active effort to fill some of the vacant properties would attract tenants. FYI…the Meat shop is a tear-down. We looked at that property- Nasty. Hopefully, other shop owners will agree with this strategy.
Jerome J Ghigliotti Jr October 09, 2012 at 05:10 PM
The high number of commercial vacancies is exactly why it was a bad idea to tear down Denny's/Mill's. I hope that the owner of the property learns the error of his ways, even if it is too late to save the quaint restaurants that occupied that property for more than half a century.
Mark Burnham October 09, 2012 at 05:27 PM
Morris & Co & Mr. Strauss. Unfortunately the height of downtown's potential has been reached. Had the city council not decided to build their offices on the one centrally located, city owned space that the downtown specific plan mandated be a parking facility we would have far more upside downtown. As it stands now we are faced with a Circle/Umpqua development that will be very difficult to lease. Partly due to the high asking price ($3.50pf) versus going lease rates of $1.50-1.75 (double? come on!) but mainly because there is not parking to accomodate the 100+ spaces this building requires. What business owner in the right mind would pay double the going rate & then be left with not enough parking for their own employees? Not to mention their customers? (insert answer: "the city council"..ha.) The same issues that plague 999 Grant will definitely apply w/ the theater's efforts to re open. The effort still requries upwards of $3 million to be raised. A large benefactor would be needed. Who would risk these funds in the face of absolutely zero parking for a 300+ seat 2 screen theatre? Factor in the uncertainty of the Circle's promise of a $1mill construction loan (Umpqua doesn't have to live up to it). Pointing the finger at an ordinance that limits financial biz from Grant is NOT where blame should be laid. Point the finger at the real culprits,the city council, who have forever destroyed the potential of Grant due to their incompetence & selfishness
Norma Dawson October 09, 2012 at 07:36 PM
What exactly is happening at the Circle/Umpqua building? I haven't seen anything happening there in months. I hate to see empty buildings downtown, but we watched a cute little town in Colorado open up it's main street and now is mostly real estate offices. I would hate to see that happen in Old Town. Agreed the meat shop is nasty, it was even when it was open towards the end of it's operation. Is there any word of anything at the old Pini Building?
kathy miller October 10, 2012 at 01:33 AM
Sol Food Restaurant should go into pini site with space for outdoor dining. No More banks and nail salons. Vegetable stand , organic famers site in revamped meat store. No more grocery outlet, 99cents stores, and all the other crappy stores that anchor our shopping centers.
K.H. Vogee October 24, 2012 at 04:10 PM
The rents for these over-sized spaces are atmospheric! I think the old Pini site and -the Alain Pinel site should be re-worked into attractive micro-business retail spaces, in graduated sizes...the building owners would help grow thriving small businesses and find the smaller spaces easier to rent. The community would find our Old Town a diverse and interestiong place to frequent and the owners would get the satisfaction of helping grow the economy...a win win for all.
Julie Casey October 27, 2012 at 04:20 PM
I'd like to have an article about the Novato Square shopping center as well as the Bel Marin Keys area. This shopping center used to be a thriving part of our community and is now a ghost town. Why are we having trouble bringing in big vendors for the Pini space and the Bell Market space? Are there issues with new building codes? Is it rental rates? What are the property owners looking for in a tenant?
Ventress Dugan October 27, 2012 at 04:58 PM
My opinion is the Novato Square Shopping Center is allowing the present businesses to run out their leases and will sell the property for Affordable Housing to be built. The management has made NO attempts to rent or upgrade this property. If this was sold for that purpose, the owners would gain huge tax exemptions. In the shopping centers present state, it is a playground for underage drinking, skateboarders and who knows what else. WHY has the city council done nothing about this situation?

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