OAKLAND — The future of a planned retail development in the Rockridge neighborhood is uncertain because of the cost of removing asbestos in a former Chase Bank building there, as well as the national downturn in the retail industry.
Crews working for developer TRC are safely removing the asbestos from the building at Broadway and Pleasant Valley Avenue. However, TRC property manager Shannon Naraghi said the exorbitant cost of removal and worries about the state of the retail sector have TRC rethinking development plans, according to a KTVU report on Sept. 18. Naraghi declined to comment further this week when contacted.
The first part of the Shops at the Ridge development is done, with a new Safeway and a Chase Bank, along with other shops. The second phase of the project is currently a gaping empty lot occupied by the half-demolished former bank building.
TRC notified the Bay Area Air Quality Management District of the presence of asbestos in the old bank building in March 2017, according to Ralph Borrmann, a spokesman for the air district.
People living nearby were concerned about the possible release of asbestos, but Borrmann said, “No asbestos was released. There were no violations of policy. The company is in compliance.”
The spokesman added, “The asbestos-containing material on site is a gooey mastic which surrounds some of the support rods. Since it is non-friable, the contractor would need to hand-remove a portion of the mastic before cutting the bar.”
In addition to what Naraghi described as the high cost of removing the asbestos, the property manager said developer TRC is concerned about the retail industry.
“The temperature of retail has changed,” Naraghi said, according to media reports. “People are more cautious now.”
The remark suggests that, despite being one of the Bay Area’s more affluent neighborhoods, even Rockridge is feeling the effect of the national retail slowdown.
The neighborhood is not the only one in the East Bay that is affected. Richmond’s Hilltop Mall has floundered in recent years with high vacancy and a lack of foot traffic, and its anchor tenant, JCPenney, shuttered in 2017. Better days may be ahead for the mall, which was purchased by LBG Real Estate Companies, LLC, in July.
Another East Bay mall seemingly feeling the pinch is Southland Mall in Hayward, with a number of vacancies, though spokesman Matthew Chudoba has said sales are at an all-time high and new retailers are coming.
Nationally, the picture is even worse. Anchor tenants like Macy’s, Sears and, as with the Hilltop Mall, JCPenney, have been closing stores across the country. When big stores like this close, traffic declines for the entire shopping mall, which can eventually kill it off completely. Estimates of the number of shuttered malls are as high as 7,000 in 2017.
Toys “R” Us, Payless, Gymboree and Radio Shack declared bankruptcy in 2017, and the chair of the board of directors for the Rockridge Community Planning Council said this likely was one of the things that spooked TRC.
“This (Shops at the Ridge) was all intended to house mid-sized retail, stores in the range of 10,000-to-15,000-square-feet, like Toys ‘R’ Us,” said Stuart Flashman, head of the Rockridge planning council.
“Looking around, they realized there’s a lot of mid-sized retail going out of business and ‘Are we going to be able to populate this if we build it?’” Flashman said.
“The asbestos removal has bumped up the cost of the demolition, so they are having to recalculate and say, ‘How much is this going to cost, how much are we going to make?’ and when they started penciling in how much they can rent for, they started saying, ‘Hold on, now,’” Flashman said.
Flashman said neighbors suggested building residential properties on the land instead, but the owner of the property, Alvin Chan, “has all along steadfastly said no.”
Flashman agrees with the nearly universal consensus that online shopping is the biggest reason for the decline of retail.
“They’re getting outdone by the internet,” he said, adding, “there’s nervousness around College Avenue” about the general retail climate.
In just one example, Amazon Prime, a subscription service that gives Amazon customers access to free two-day delivery, had 90 million U.S. members as of September 2017, according to a survey by Consumer Intelligence Research Partners, a Chicago research firm. There are approximately 325 million people in the United States.
Amazon Prime grew 38 percent in the preceding 12 months. Meanwhile, in-store visits on Thanksgiving and Black Friday in 2017 dropped 1.6 percent from the year before, according to retail research firm ShopperTrak.
Flashman isn’t entirely pessimistic about the future of retail on College Avenue and Rockridge in general.
“There are things that work well on the internet and things that don’t,” he said. “With Toys ‘R’ Us you go in and search around and find things on your own, and the Internet is like that.”
In contrast, an old-fashioned shoe store with customer service, “where someone measures your foot and says, ‘Let me go get some shoes for you to try on,’” offers something the internet doesn’t have, Flashman said.
“One of the newest stores that opened here in Rockridge is Cole Hardware. Their store is tremendously popular,” he said. “You go in there and say, ‘I have a problem with my toilet,’ and they can tell you what to do. That beats the internet any time.”
