Pleasant Hill moves Beyond store closings to new opportunities

PLEASANT HILL, CA (May 18, 2023) — A glass half full mindset is the prevailing attitude in the wake of the announced closure of Bed Bath & Beyond’s downtown store, with city officials turning attention to those tenants who are or will soon be opening for business in smaller spaces along Crescent Drive.

But the proverbial elephants in the downtown – two big-box empties representing 78,253 sq. ft. of commercial real estate – are hard to ignore.

Mayor Tim Flaherty, a real estate attorney by day, remains optimistic that the actions the city is taking to control what it can in the current economic environment will position the community well going forward.

“We can be an influencer but not the decision-maker, and that makes it frustrating,” he said.

Post-pandemic, as the retail market moved into a new cycle, the city took steps to streamline the permitting process to they can get the right tenant mix. The downtown corridor is also being rejuvenated with the replacement of trees along Crescent Drive and developing a greater common area for the public to congregate.

Looking for a ‘vibrant’ mix

Creating “a town square environment” is the strategy behind these collective efforts to draw visitors downtown.

“If you have the right mix, that can be quite vibrant,” Flaherty said.

With shopping malls seemingly on the way out, he believes the city’s efforts provide “good opportunities.” But he is not ready to shut the door on the shelf life of big-box entities. He pointed to Burlington taking over the former Toys R Us location along Contra Costa Boulevard.

On Pleasant Hill’s wish list of large potential tenants is another supermarket operator, such as a Trader’s Joes, with Safeway the predominant chain in town. The soon-to-be-available Bed Bath & Beyond space would seemingly be a great location for another food store, said Flaherty.

UBS owns both large property footprints in the downtown, the former OSH site and Bed Bath & Beyond. Vestar manages the properties, according to Zach Seal, Pleasant Hill’s economic development manager.

“Vestar’s real estate team has strong relationships with retailers and retail brokers, so they have the wherewithal and the contacts to find tenants for these two spaces. The city and UBS/Vestar work in partnership to maintain and improve downtown’s infrastructure, and the city always helps when we can, as we do with any property owner, to assist with planning reviews and building permits to help facilitate new tenants moving in,” Seal said.

Flaherty noted that for years, USB/Vestar could not do anything to draw prospective tenants to the OSH site because OSH did the minimum and paid the rent to hold the site. It’s only been recently that the parties got out from under OSH’s thumb, so they could move forward to find new suitors for that site.

In fact, Vestar was recently in extended negotiations with Target for that site – only to see things end without a deal.

Welcoming new businesses

The city’s efforts to stimulate development of 270 units of housing along Cleaveland Road, set to open in early 2024 in close proximity to the downtown, is further in line with the goal of bringing people to the existing and future tenants that dot the retail corridor around Crescent Drive.

“It’s kind of a chicken and egg thing,” Flaherty said regarding what is needed first – the people or the businesses.

Brandi Hardy, marketing director for Downtown Pleasant Hill, lamented the departure of Bed Bath & Beyond, but she’s raising an optimistic glass to toast the future.

“While we are sorry to see them go, the loss of any retailer provides us with the opportunity to assess new offerings that may better match the changing wants and needs of our shoppers,” she said.

This year alone, the organization has welcomed several new tenants. Paris Baguette recently opened, and Smallcakes Cupcakery is projected to open in June. The former Sweet Tomatoes restaurant was subdivided to accommodate three more tenants, including Restore Hyper Wellness, which is now open; Cantina Jack’s, with the same owner as Jack’s Restaurant around the corner; and Morgan Territory Brewing, which projects to open a tasting room by early June.

In addition, Citibank is expected to open in short order.

All of Morgan Territory Brewing’s offerings are generated out of a Tracy plant, but COO Michael LaCross sees the future moving full speed ahead after the pandemic put the brakes on the brewery’s retail plans. The changes in the Pleasant Hill downtown business landscape in recent years “gave us an opportunity to be in Pleasant Hill,” he noted.

LaCross is no stranger to the area, as his family lives “just down the street” in Lafayette.

“Pleasant Hill has a really nice vibe and energy,” he said, pointing to the concerts and Off the Grid. “We will just add to that energy in a positive way.”