Safeway plans to close downtown San Jose store in June: city leaders

SAN JOSE — Safeway intends to shut its store in downtown San
Jose within weeks, city officials said Tuesday night.

“There is no question, this is a big loss,” San Jose Mayor
Sam Liccardo, in an interview with this news organization, said
Tuesday night of the looming shutdown of the Safeway store.

The soon-to-close Safeway store is located at 100 S. Second St.
and is scheduled to cease operations by June 14, a memo issued by
the office of San Jose City Councilman Raul Peralez stated.
Councilman Peralez represents the downtown San Jose area.

“We are very sorry to see Safeway close its doors,” the city
memo stated.

The main problem: Free parking vanished for Safeway patrons,
despite strenuous efforts by the city to gain ownership of the
underground parking garage that’s adjacent to the store.

A government agency, greatly influenced by Santa Clara County
officials, that is the successor to the defunct San Jose
Redevelopment Agency, frustrated the city’s multiple efforts to
buy the parking garage. As it’s obliged to do, the successor
agency sold the garage to a high bidder, according to City Hall
sources.

Eventually, a private investment group bought the garage and
jettisoned free parking for Safeway patrons in the form of a store
validation. That, in turn, undermined the financial stability of
the Safeway store, City Hall sources stated.

Rumors had circulated for several months that Safeway was
strongly considering a closure of the supermarket, which is one of
the smaller store formats for the grocery chain.

Pleasanton-based Safeway intends to offer the affected employees
positions at other company facilities.

“We recognize the great value that grocery retailers have to
our downtown residents and the concerns that arise once Safeway
discontinues its operations,” the city memo said.

However, a number of grocers are located within a mile of the
historic core of downtown San Jose, which is informally at the
corner of First and Santa Clara streets.

Whole Foods, Target, Trader Joe’s and Grocery Outlet are in
the vicinity.

What’s more, according to the city memo, several ethnic
grocers are nearby, such as Santo Market, Cardenas Market,
Arteaga’s Food Center, and Nijiya Market.

Still, the mayor believes residents and workers will
increasingly demand additional supermarket and retail options in
downtown San Jose for a number of reasons.

Chief among those: Google has proposed a transit village near
the Diridon train station, while Adobe intends to dramatically
expand the size of its downtown campus of three buildings by adding
a fourth office tower at an adjacent site.

“I will be happy to pick up the phone, do whatever I can to
encourage a grocery store, or other retail, for the Safeway
site,” Mayor Liccardo said.

Source: FS – All – Real Estate News 1
Safeway plans to close downtown San Jose store in June: city leaders