The walls of the Target store are going up at the site of the East Washiangton Place shopping center, while at the Deer Creek Village site on North McDowell, the future home of Friedman's Home Improvement, the progress is all happening behind the scenes. Both centers are on track to open in 2013 and Petaluma will begin seeing sales tax revenue generated by these new retail opportunities in the first quarter of 2014.
East Washington Place, which will soon become Petaluma's largest shopping center, is planned to open in July or August. In addition to anchor store Target, the 378,000 square foot center has signed leases with TJ Maxx, Dick's Sporting Goods, Ulta Cosmetics, Panera Bread, Chipotle and Sprouts Grocery store. Ryan Nickelson, vice president of investments for the developer, Regency Centers, said this week that two new leases were recently signed with BevMo, a wine, spirits and beer store, as well as Chase Bank.
"The center is currently about 75 percent leased. There are some small shop spaces available but we expect it to be almost fully leased by the time the center opens," says Nickelson.
Because the site work, grading, paving and underground utility work were completed in the summer, December's heavy rains have not slowed work and construction has been able to move onto framing the buildings. "We were able to get out of the dirt phases. With that done, it's a lot easier working in the rain," says Nickelson.
At the location of the 300,000 square foot Deer Creek Village shopping center on North McDowell, construction equipment isn't on the site yet but building plans are being drafted and negotiations are underway to secure tenants in addition to Friedman's. Ground breaking is expected to happen once the rainy season is over in April with the center planned to open in the fourth quarter of 2013.
"There are four other tenants including a 40,000 square foot junior anchor that we are in the process of finalizing the letters of intent so we can get leases completed and release the tenants' names. Our intent is to get these built at the same time as Friedman's," says Greg Geertsen, managing director of developer Merlone Geier Partners.
Even in a difficult economy, Geertsen says that tenants are eager to come into the center. "Petaluma is one of the few cities in the country that has retailers expanding into it. We are very fortunate to have tenants like Friedman's and others who are only opening a select number of stores. It shows you how much demand there is."
Based on a fiscal and economic analysis from a couple of years ago, the demand for additional retail opportunities in Petaluma will generate much needed sales tax revenue for the city's general fund. "When the centers are fully leased and up and running, Deer Creek is predicted to generate $700,000 and the Regency center $1 million in annual revenue," says Petaluma finance director Bill Mushallo.
Because of the filing process for tax revenue, there is lag time between when the stores open and when the city will see revenue. "If Target opens in the third quarter of 2013, they will file sales tax in the fourth quarter and we will see revenue in the first calendar quarter of 2014," Mushallo says.
Next month, the city council will receive and review the city's mid-fiscal year financial update. "These revenue projections will be taken to the City Council in February," according to Mushallo. "It will make it a little clearer, but it is still an estimate."