Earlier this month, The Public Market announced another exciting tenant to its growing  list of purveyors and have three more in the queue. Public Market alumni Nyum Bai has become the ‘Toast of Oaktown’ and recently listed fifth on Bon Appetit’s Best New American Restaurants of 2018.

They are a little more than a month away from the ribbon cutting celebration of the renovated & expanded Christie Avenue park that will bring a highly anticipated children’s play area and dog run to the neighborhood.

But not everything is going great for the Public Market project. The New Seasons grocery space remains empty and The E’ville Eye recently learned that ‘Parcel B,’ which was to add retail space and parking directly across from the food hall, has been suspended indefinitely.

“CCRP and our investment partners have decided to suspend construction of Parcel B,” confirmed CCRP President Mark Stefan when contacted. “We are preparing plans to return the site to a surface parking lot while we study future options for the site.”

Rising Construction Costs, Challenging Retail Landscape to blame?

One of the many reasons behind the decision to suspend development of the parcel is the staggering cost of construction in the SF Bay Area that has risen to the second highest in the world. The causes of this, outlined in a recent UC Berkeley funded Turner & Townsend report, include a bureaucratic approval process, a labor shortage and NIMBYism. Trump administration tariffs and immigration policies aren’t expected to help this cause.

Pressures on ‘Brick & Mortar’ retail from online sales continue to mount. Despite a surging economy, the often mentioned ‘retail apocalypse’ is predicted to displace low-income workers and shrink local tax bases like ours in the coming years.

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To boot, our City Council has not exactly been supportive of the project along the way. They initially rejected the project that will eventually include nearly 400 units amidst our region’s ongoing housing crisis (later approving it and calling it a negotiation tactic to extract more affordable units). Our Council also revoked a noise ordinance waiver necessary to expedite the project and meet proposed deadlines. While the relief from construction noise was welcomed by nearby neighbors, slowing down the project has negatively impacted the tenants of the food hall and drawn-out construction.

In 2015, the City passed its highest in the nation Minimum Wage Ordinance and in 2016, they passed the first of its kind Fair Work Week ordinance that adds complexities to managing employee schedules. Both these ordinances have been welcomed by employees and labor groups but have added challenges to running a business and the decision by some to choose Emeryville for opening one. Cost of living and housing costs for retail employees remains an enormous barrier to living close to their jobs.

“Real estate is always dynamic, particularly in the Bay Area,” noted Stefan adding that all the above factors had a cumulative effect on his projects ability to attract new tenants and their decision to suspend this part of the project.

Construction and Parking Impacting Purveyors

Needless to say, the ongoing construction and parking challenges have also created difficulties for the businesses at the Market. CCRP has tried to mitigate this by offering a generous rewards card and hosting regular events like their Second Friday Market Beats and Thursday Pm Nights.

The loss of New Seasons has been the biggest downer for the food hall purveyors who were relying on its draw to improve foot traffic. “We thought New Seasons was the light at the end of the tunnel,” noted one purveyor who preferred anonymity adding that business was down significantly during the realignment of Shellmound. “Short-term this is probably good news for business, but long-term we likely won’t be seeing the full development that was supposed to occur.”

New Seasons Still Negotiating with Subtenants

Realigning Shellmound was a very expensive proposition. Despite the decision to suspend the addition of retail, Stefan pointed out that it still provides numerous benefits to the project and the community. “It brings pedestrian, bike and auto traffic closer to our retail offerings. It improves bike safety and creates a much more inviting environment for our customers to hang out and enjoy. We anticipate that the return of parking and much less construction will be not only beneficial for business, but also will provide locals some relief from the impacts of traffic and building in the surrounding area.”

Stefan had no additional updates on the grocery space other than that New Seasons was still under lease and that they are actively negotiating with possible subtenants.

Despite the recent bad news, Stefan remained optimistic about the longterm viability of the project. “We are committed to the success of Public Market and to providing the best overall experience for our customers.”