Delays could seal fate of Milk Pail

Developer Merlone Geier says referendum could kill San Antonio plans

The July 1 City Council meeting, where Merlone Geier hopes to get City Council approval for its big San Antonio shopping center redevelopment proposal, is quickly approaching.

For over two years, the San Francisco-based developer has been pitching its plan for a 70,000-square-foot movie theater, 1,480 space parking garage, a seven-story hotel, a pair of six-story office buildings and new ground-floor shops around a public square designed with an eye towards "place-making" -- all on a 9.9-acre portion of the San Antonio Shopping Center at the corner of San Antonio Road and California Street. It would replace the Ross, BevMo and several small properties on the corner, all of which Merlone Geier now owns -- except for the Milk Pail market.

The project may not slide through very easily. The potential consequences for the Milk Pail market -- which is facing closure without an agreement to lease parking spaces in the project or a workable deal to relocate the business -- have drawn outcry from numerous patrons of the popular European-style open air market. Meanwhile, a group of residents concerned with the city's jobs-housing imbalance say they will seek a referendum on the project, putting it on the ballot for voters to decide on but only if it is passed before a "precise plan" is done in December. That plan would consider larger needs in and around the shopping center, such as the need for park space, bike and pedestrian access and a school for the 600 kids expected to move to the area.

The City Council is holding a study session on the precise plan June 24.

Merlone Geier's Mike Grehl told the Voice on Monday that his company may pull the project if it appears the referendum would delay it, and would also halt its efforts to help the Milk Pail.

Grehl said that pleasing the referendum backers, who want housing added to the project, would mean delaying construction for two years so the state-required environmental impact report can be modified to study the impact of the replacing office space with housing units. Planning director Randy Tsuda disagreed, saying such a modification might take six to seven months if he were to "hazard a guess." Grehl said that estimate was "optimistic."

Merlone Geier may forgo phase two entirely and instead build a 175,000 square-foot big-box retail building along the the southern half of the site, as approved by the City Council a few years ago -- and the Ross and BevMo buildings on the northern half would remain, to be leased to new tenants, Grehl said.

"As an investor and manager of money for people (our goal) is to mitigate risk and time," Grehl said, explaining why delays could kill the project.

Citing a significant lack of housing to accommodate job growth from companies including Google, Samsung and LinkedIn, the Campaign for a Balanced Mountain View wants to see the pair of six-story office buildings in the project replaced by housing. The group, which says it will collect signatures for a referendum, says the office buildings could add 2,000 employees to a city which already has a housing shortage and is suffering from serious gentrification from tech job growth.

"If the current plan is not stopped, then we'll need well over 2,000 new housing units just to keep the jobs-housing imbalance from getting worse," said Lenny Siegel, who is leading the Campaign for a Balanced Mountain View.

The referendum wouldn't be cheap, it is likely to require a special election next year costing the city $300,000, if residents gather the 3,400 or so required signatures.

The warning from Merlone Geier did not deter Siegel.

"Merlone Geier is trying to spin the consequences of a referendum campaign," Siegel said. "Like politicians, I expect them to change their tune once the voters have spoken."

Grehl said there was another possibility allowed under the current EIR: replacing the seven-story hotel with a six-story residential building with 150 units. Tsuda said that would also require a six- to seven-month long EIR modification.

Milk Pail in jeopardy

While Milk Pail owner Steve Rasmussen said he had not heard from Merlone Geier since February, Grehl said Merlone Geier continues to search for properties that the Milk Pail could move to, and hopes to line something up before the July 1 meeting in order to get Rasmussen's support for the project.

"The Milk Pail's fate and Milk Pail's future are completely outside the hands of things in my capacity to control." Rasmussen said Monday. "I continue to look for alternative sites that the Milk Pail could relocate to because of the enormous uncertainty of working with Merlone Geier. We are at the end game and it has come fast."

Rasmussen is hoping to get the City Council to require a shared parking arrangement with Merlone Geier, which the developer continue to resist. Without it, the Milk Pail will be forced to shut down when its current parking agreement expires in 2016, as it has only five parking spaces on site, and needs 22 to meet city requirements.

Rasmussen has hired lawyer Joan R. Gallo, who recently wrote a letter to city officials saying that "it would be perfectly legal to require parking adequate for the center to function as a whole and require that the developer make parking available to the Milk Pail at fair market value. The Milk Pail currently pays rent under its Parking License and would continue to pay for its use of the spaces. The decision not to require that developer to make parking available in this manner is strictly a policy decision."

Gallo points to several city agreements with property owners in the center, known as the WIRET agreement and the La Mancha agreement, that show precedent for such requirements, including one saying that property owners must be willing to lease spaces to adjacent owners at fair market value. Because of his understanding of the agreements, Rasmussen said in an email, "When we did our very costly remodel in 2007 that made our store 'like new', I expected that the likelihood that we would lose our parking was very remote."

Tsuda said that such agreements do not exempt the Milk Pail from providing its required amount of parking and City Manager Dan Rich has said it isn't the city's place to pick winners and losers in a conflict between two property owners.

If phase two does not go through, Grehl said Merlone Geier will not be extending the agreement allowing Milk Pail customers to use the Ross parking lot.


Posted by Konrad M. Sosnow, a resident of Cuesta Park
on Jun 20, 2014 at 2:17 pm

It looks like Merlone Geier is using the threat of sealing the fate of the Milk Pail to leverage the City Council to go forward with their plans and for the Campaign for a Balanced Mountain View to drop their potential referendum.

I urge the City Council and the Campaign for a Balanced Mountain View to not be swayed by such threats!

Do what is best for Mountain View. There is always a price for every action.

Posted by GDM, a resident of Blossom Valley
on Jun 20, 2014 at 2:40 pm

If the Council requires a parking provision for the Milk Pail they are setting a precedent and anybody in the future who is effected by development can expect similar help from the City.

The Milk Pail as a private business must pay their own way. They have done nothing for the public to deserve favored treatment.

Posted by GDM, a resident of Blossom Valley
on Jun 20, 2014 at 2:43 pm

More housing means more congestion. Office workers do not put as many cars on the road as residents do. A lot of them will commute by public transit.

I urge the City Council to move ahead with the project. It will be a great upgrade to the San Antonio center.

Posted by incognito, a resident of Waverly Park
on Jun 20, 2014 at 2:47 pm

If Merlone Geier and Steve Rasmussen were a couple of little kids out on the playground at recess, MG would be sent to the principal's office for bullying. In this case, the principal, MV, is trying to appease the playground bully, saying it's not our role intervene, etc. However, all the other kids on the playground are banging on the principal's door, urging the principal to do something to protect little Stevie.

Posted by Well Named, a resident of Old Mountain View
on Jun 20, 2014 at 3:13 pm

Why should City Manager Dan Rich care? Like his name, he is now rich! He makes over $200K per year, he has a guaranteed retirement plan, and then he will consult back to the city for big bucks after he has "retired".

Hey may not care who wins and who losses when it comes to someone else business, but when it comes to Rich's money, you can bet he is going to win every time!

Ask the City of Cupertino how much they are paying him to not work there anymore.

Posted by SB, a resident of St. Francis Acres
on Jun 20, 2014 at 3:23 pm

@incognito - Let's hope the City will be an UP-stander not a Bystander.

Posted by member, a resident of Monta Loma
on Jun 20, 2014 at 3:25 pm

Merlone Geier's phase 2 proposal is fair and brings Mountain View a lot of value. I don't want to see more apartment housing in this location. There is already enough. Around the El Camino/San Antonio intersection, there is already severe traffic compared with when Sears was around. I think that has a lot to do with the new apartment complexes in the village. There is a huge development on the Los Altos side. If we have offices and restaurants in phase 2, at least these people will travel in the opposite direction. Mountain View is 66% renters and is doing a lot to balance the job/housing situation. Why don't Palo Alto/Los Altos build more housing?

Posted by MV, a resident of Monta Loma
on Jun 20, 2014 at 3:32 pm

Milk Pail does not own the parking lot. Merlone Geier does. Just because I like Milk Pail does not give them the rights to use other people's property. We can plead to Merlone Geier, boycott their center, but it has the same legal grounds as MG demands MP selling the land to them.

Posted by Last straw with MG, a resident of Monta Loma
on Jun 20, 2014 at 3:32 pm

I just read this article and I am truly appalled by MG behavior. I don't even shop at the Milk Pail but the bullying tactics MG is using against a popular, locally-owned business is disgusting. I actually was all for the development moving forward until I just read this article. MG, you should be ashamed of yourselves threatening MV residents like this and giving the appearance you are trying to help the Milk Pail when it's pretty clear you are not. Go ahead, pull out. I no longer care and I, personally, no longer have any interest in shopping at anything you build there. It's really not that hard to work with Milk Pail owners and give them a shared parking agreement. And don't think for a minute the residents of MV are so stupid we don't see through your lies and scare tactics. Good riddance.

Posted by Dave, a resident of Cuesta Park
on Jun 20, 2014 at 4:18 pm

I live here and also work just down the street from Milk Pail and shop there. Just want to say that I would much prefer the movie theater-hotel-first floor shops and office buildings to replace the junk that is there now. It would bring vibrancy and a center of activity to this area. We don't need big box retailers and random buildings (Ross/BevMO etc.) Please let the development proceed.

Posted by Plenty of developers in the sea, a resident of Monta Loma
on Jun 20, 2014 at 4:36 pm

Let them walk. I'm sure 10 other developers will happily line up for the chance to build something there. Maybe 1-2 of them will be willing to actually listen to community input rather than just push forward to make a quick buck.

Merlone Geier isn't the only game in town. I'd rather work with another developer and get more of what we want there and not work with these bullies and be stuck with something that's just better than what's currently there. We'll have to live with it for the next 30+ years, no need to rush. Let's do it right.

Posted by b Minkin, a resident of Sylvan Park
on Jun 20, 2014 at 5:22 pm

The city council was an active participant in setting in motion the plan for San Antonio, and it is incorrect for them to claim they have had no hand in choosing a winner.

Posted by PA Resident, a resident of another community
on Jun 20, 2014 at 5:25 pm

I think it is utterly ridiculous for businesses not to share parking. We are supposed to be supporting walkable environments and if we are expected to park and drive between every destination in the San Antonio Center it is a step backwards. Who cares if someone is parking to see a movie or parking to buy some produce or parking to visit a friend in one of the townhouses? In fact, the person parking for the least amount of time is likely to be the one shopping at Milk Pail.

Posted by, a resident of another community
on Jun 20, 2014 at 6:54 pm

We already have gridlock on El Camino and San Antonio Rd. Parents taking kids across El Camino on Los Altos Ave. back that street up for multiple light cycles trapping residents around school commute time. We don't need more housing OR more office space. We need a school on that side of San Antonio. Rather than threaten eminent domain on the Target property for a new school, why not put a park or school on the land.... anything for relief of the oppressive traffic and overcrowding we have ALREADY without all the new units under construction already?

It feels like Mtn View and Palo Alto both want more property tax revenue so they shove the massive overbuilding and traffic congestion it brings towards each other, as far from the center of their towns as possible, and it destroys the "small town" quality of life in Los Altos as it chokes our main road into town off.

Put a park there and let the Milk Pail share the parking with park users. If you want an ugly, overcrowded place to live then move to Brooklyn.

Posted by Sparty, a resident of another community
on Jun 21, 2014 at 4:56 am

Sparty is a registered user.

Traffic at that intersection is no worse than the twice a day disaster at Hausner School.

Posted by Small business supporter, a resident of another community
on Jun 21, 2014 at 12:11 pm

I shop at the Milk Pail and my husband's family has been going there since you could get milk at a drive through there. While a movie theater would be nice in theory, I hate to see all the little, unique businesses getting shoved out of Mountain View in favor of housing and expensive, homogenous chain restaurants. La Bamba had to move out of the original hole in the wall location for new housing going up. New location, higher prices. Then the Boardwalk, now the Milk Pail. Eminent domain for Target??? What's the city of Mountain View going to try to take next? There is new housing going up all over Mountain View--the San Antonio Center does not need it. The space is already too crowded and there is too much traffic congestion, and that's before the new housing along El Camino is finished and occupied. The roads can't be widened. It would be easy enough to give the Milk Pail the few parking spaces it needs and would create good will. More congestion is going to do the opposite. I go to the center for Safeway, but once the new one in Los Altos opens, I won't go back because of the difficult traffic situation. If the Milk Pail goes, there will be no reason to shop there at all.

Posted by Sparty, a resident of another community
on Jun 21, 2014 at 1:50 pm

Sparty is a registered user.

Again with the Boardwalk. The Boardwalk was only there at that location in the first place because some developer put an office building there.

People really need to find out what the plans are for San Antonio before they get into histrionics.

You can't live your entire life having someone else do your homework

Posted by Garrett , a resident of another community
on Jun 21, 2014 at 1:52 pm

MG could drop plans for this development, build big box center with Milk Pail getting the back wall side and loading docks. Even shared parking won't help the lost of access to the center.

Chances are MG will build facing their property not Milk Pail.

Posted by concerned citizen, a resident of Old Mountain View
on Jun 21, 2014 at 8:31 pm

"People really need to find out what the plans are for San Antonio before they get into histrionics."

Right. Here's the proposal for San Antonio Phase 2, in quite a bit of detail. First, the staff report given to the EPC by Planning: Web Link

Next, the Environmental Impact Report for the project: Web Link

My own reaction was not histrionics, more along the lines of disgust.

The EIR asserted that the project would add 2500 new jobs, but would add only 571 AM peak hour trips, and 839 PM peak hour trips. Then, using these extremely lowball figures plus outdated 2012 traffic figures, it asserted that there would be minimal impact on traffic congestion - except for the intersection of San Antonio and El Camino, which the EIR conceded would still unavoidably deteriorate to "Level of Service F". Yet, staff recommended that the project be approved, because of the "overriding benefits" that it would bring to Mountain View. Incredible!

Posted by Steve L, a resident of Old Mountain View
on Jun 21, 2014 at 10:52 pm

It's true that the Milk Pail is a business, but it's also a community institution. It has a character that provides value beyond food for money. Have you noticed how friendly and, yes, neighborly, people are when they shop there? The energetic staff and astoundingly low prices make this a destination for many. Let's find some parking for them!

Posted by concerned citizen, a resident of Old Mountain View
on Jun 21, 2014 at 11:03 pm

Note: The Environmental Impact Report (link above) takes quite a while to load, so be patient. If you're interested, it's worth the wait.

Posted by Cate, a resident of The Crossings
on Jun 22, 2014 at 8:48 am

The new piece of data here is the threat of a big box store going in the space if Phase 2 doesn't go forward. Blech. When did that get approved?! *Fantastic* If a big box store goes in, nobody's going to want to live right next to it. This seems to be the real stick that MG is holding.

Posted by Bluff!, a resident of Shoreline West
on Jun 22, 2014 at 10:00 am

Is it true that MG is free to build big box stores? Sounds like a clumsy bluff to me. They stand to make a lot more with the Phase 2 project even if it's delayed and regiggered to include housing. Also big box stores there would devalue their Phase 1.

Posted by Sparty, a resident of another community
on Jun 22, 2014 at 11:43 am

Sparty is a registered user.

" Have you noticed how friendly and, yes, neighborly, people are when they shop there? "

I've noticed a lot of..'characters' who just push right in front of you while you are looking at or selecting things. Not as weird as the people who show up for the Monday free book giveaways at Cubberly, but very very close.

Posted by Garrett , a resident of another community
on Jun 22, 2014 at 2:11 pm

I think MG can build a nice new retail center with parking and store fronts facing Phase 1, leaving Milk Pail in the shadows. The planned housing on California and San Antonio will face back walls and parking lots, walking to and from Caltrain will be less impressive.

Why would amyone place a school in a shopping center with car and truck traffic.

Posted by concerned citizen, a resident of Old Mountain View
on Jun 22, 2014 at 6:51 pm

Last Tuesday the EPC voted 7-0 to delay approving any Phase 2 proposal until after a new San Antonio Precise Plan is developed. But this has only the force of a recommendation to the City Council. They could ignore it, or not.

If Merlone Geier's Phase 2 proposal is not approved by the council, the existing San Antonio Precise Plan would allow the construction of one big box store:

"Under the No Project Alternative, the site would remain in its existing condition except for the construction of a 175,000 sf retail store with associated parking, as approved by the Precise Plan Amendments and San Antonio Center Project EIR (City of Mountain View 2010). The new retail store would be 2 stories (40 feet) in height and would include parking on the ground level."

(Quote is from this city document, page 15: Web Link)

Sounds good to me. Let Merlone Geier go for it. The building would still have to go through a design review process, I think.

Posted by Sparty, a resident of another community
on Jun 23, 2014 at 3:29 am

Sparty is a registered user.

"Why would amyone place a school in a shopping center with car and truck traffic."

Have you not seen the traffic chaos that Hausner school creates every day?

Posted by Garrett , a resident of another community
on Jun 23, 2014 at 8:56 am

Big box store with 3 large ugly walls, 1 wall will have entry/exit doors to parking lot or 2 stores in the box. Depends on what retailers want the site and what building needs are required.

3 ugly walls with docks, firedoors and service area will be facing someones direction.

You could go small but somewhere that back wall will be built which I am afriad Milk Pail will get the wall of box.

Posted by Lillian B, a resident of another community
on Jun 23, 2014 at 6:44 pm

The City Council already has their mind made up to steam-roll forward and cares less what the community says, the recommendations from the EPC, blogs or petitions.
I believe there are some good things that can come from a regional gathering place. It is unfortunate that MG doesn't understand what the Milk Pail Market can contribute to their cause. A ton of locals who will bring friends and help make the center filled and successful. Too bad their bully tactics are turning the whole community off towards the project along with the City Council. I blame the City Council for not requiring MG to lease the Milk Pail 11 parking spaces. Look at what the result of that has been.

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