Home Oakley Curveball: Oakley Swaps Out DG Market in Favor of Grocery Outlet

Curveball: Oakley Swaps Out DG Market in Favor of Grocery Outlet

by ECT

Oakley

Oakley City Manager Bryan Montgomery announced to the city council Tuesday evening during his report that DG Market would no longer be the tenant of the former CentroMart building, but rather, it would now become a Grocery Outlet.

Montgomery provided the city council with an overview of what has transpired and why the change has occurred.

The City solicited bids and awarded the contract to Cross Development. He explained that since the award, the state has changed rules.

“The state further modified the law and made it much more different and difficult on how properties are disposed. To some degree, like Ace Hardware, you got in under a much more simple approach to disposing the property. If we don’t proceed with this sale, there will be a much more complicated process,” said Montgomery.

He further explained how negotiations between Cross Development and DG Market (Dollar General) fell apart due to costs after Cross Development wanted to build a new building.

“It would be good to take down the 50-year-building and put up a new one. The problem is they already gave a price to DG Market on the existing building—this became an added price. DG Market allegedly stated that they want the new building, but we want that other price,” explained Montgomery.

Montgomery stated both sides hit an impasse and DG Market stated they were no longer interested.  That is when Dollar General showed interest.

“Grocery Outlet is not a dollar store arrangement, it’s all name brand but off the shelf type bargains and sell meat, produce stands and freshened up to compete with Fresh and Easy, Whole Foods, Trader Joes environment,” explained Montgomery.

He further explained the legal aspect of how the tenant could change because the agreement was with Cross Development who would own the building.

“The unique aspect about the legal arrangement is our agreement is with Cross Development. Their proposal indicated DG Market, their supplemental document indicated DG Market and for whatever reason you felt like you don’t like the assuagement of the tenant from DG Market to Grocery Outlet that their probably is a way to cancel this arrangement the end result of that is that the building would revert back to the new rules of disposition from the state,” said Montgomery.

Montgomery was quick to alert the council about the pitfalls of cancelling the agreement.

“By cancelling the sale, it would trigger new processes by state. The state would have direct control of how to dispose and utilize the bond proceeds. It would allow anyone to bid on the property, when we got to that point,” said Montgomery. “In my opinion, I would guess that the two most likely buyers for the building are DG Market and Grocery Outlet so the irony is they are interested and want to be there and if we pass this opportunity which we can do, but we may get the same folks at the table, but have less control.”

He further explained that since the specific plan mentions grocer, any commercial entity could get the building and Oakley would not have a say.

“In the state we would lose some measure of control, our design guidelines while strict aren’t as strict as what we get now wouldn’t match exactly what we have across the street. Montgomery that with the state process, it could add up to a year before development could begin.”

Montgomery also shared comments made by Councilwoman Diane Burgis who was absent due to illness.

“I also want to relay Councilwoman Diane Burgis feelings are that she wasn’t excited about DG Market, she is not excited for Grocery Outlet. From a staff perspective, we can echo those concerns, but a grocery in the downtown seems to make sense because it’s within the city plan,” said Montgomery.

Montgomery further stated that there is less risk.

“I believe there is even less risk with Grocery Outlet. We had some fear that at some point DG Market might fall back to more of their dollar store years down the road, we tried to circle around that in our agreements but there was some fear that could take place. Grocery Outlet is a grocery store so that is likely what it would be.”

He explained that if the council wishes, they could bring back a document and try and tell Cross Development “thanks but no thank you we don’t like your last choice or first choice”.  By allowing Cross Development to allow Grocery Outlet into the space, there is no action to take and they move forward.

Even after a year of talking up DG Market to the community, Montgomery stated his personal opinion was that ”Grocery Outlet is a step up from DG Market”.

Council was then given the opportunity to provide feedback under an item listen under reports to direct action.

Here is what was said:

Doug Hardcastle: if they are willing agree to build it with same look as La Costa or Carpaccios, and then I think it’s a win-win. The whole face of the property will enhance the downtown. If we wait, it might be two years until something else happens and there wouldn’t be an agreement to build within the same structures that are there.

Carol Rios: I feel comfortable with the assignment being made to Grocery Outlet. We have doubts with DG Market and Cross Development; they have been workable and upfront when everything fell apart. The thought of the state stepping in and having the ability to sell the property would be without any input from us so I have no qualms with staying with Cross Development and with the assignment with Grocery Outlet.

Kevin Romick: the last thing I want to do is let the state back in at any process in here for anything at any level and anywhere in this process.  I’d be in favor of this. Our greatest concern and our biggest issue is what the building would look like and can it mix and match with what we currently have there and I think in regards to what goes in there, that is the most important thing is. I’ve been to the Antioch one and not real thrilled with that, but maybe I will head up to the Roseville one and see the other cities to see what newer facilities look like. I am confident with sticking with Cross Development and not letting the state back into the process.

Randy Pope: I agree and you have consensus and direction.

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23 comments

Kati Jan 16, 2014 - 10:42 am

I prefer the G.O. to the D.G. I hope the design/layout is upscale to match the wonderful new development next door!
The back part of the development lot (bait shop, etc.) needs some attention as well, but I’m sure that is to come.

Bobby Lott Jan 16, 2014 - 10:48 am

Classic Oakley. Say one thing and do another when the public is not made aware in advance.

Michelle B Jan 16, 2014 - 10:51 am

Is Diane Burgis the only one who understands that the people of Oakley do not want a ghetto downtown? Grocery Outlet is creepy and I won’t go there. I am sure that is not the type of clients Carpaccios and Repbulic of Cake want hanging out next to their upscale business.

p5ret Jan 16, 2014 - 11:00 am

“Our greatest concern and our biggest issue is what the building would look like”

Mr. Romick, you can put a pig in a dress but it is still a pig. It really doesn’t matter how pretty it is on the outside, if people don’t go there. Once again the city is going to suffer because someone made a poor decision to purchase commercial real estate with redevelopment funds, so they could make everything look pretty.

Barbara DuMont Jan 16, 2014 - 11:02 am

It seems that the city is more concerned about their money pit. Soooo a ton of money has been spent to “upscale” the downtown area, turning it into a traffic nightmare and a public safety issue, now we are going to add delivery trucks to the mix. Ace was going to be bad enough but the daily deliveries at a grocery store?????????? Then there is the lousy parking lot design–I just can’t wait for the complaints that the La Costa customers are taking all the parking near the store. At this point I guess we are stuck with it and no matter what we say its coming. Too me, its just another example that we need new leadership and some major changes in City Hall. There is more to the City of Oakley than that one block area.

JimSimmons42 Jan 16, 2014 - 11:04 am

I thank the City Council of Oakley for once again making Antioch look better. I wonder if they have ever been inside the Grocery Outlet because if they did, they would never approve this. Beautiful downtown which will be ruined with this type of “outlet”.

I am really glad we do not have councilmembers who care more about looks than substance. Poor Oakley.

Julio Jan 16, 2014 - 7:06 pm

Jim, we do have 3 council members who are very little substance themselves.

ECV Jan 16, 2014 - 11:08 am

Not a very bright move. Looks to me to be another race to the bottom. One might ask, what are they thinking? What a nightmare.

B-Wood Jan 16, 2014 - 11:09 am

You said it Jim. “Poor Oakley”

FrankS Jan 16, 2014 - 11:15 am

I suggest the residents of Oakley vote with their brains next time instead of for their friends. They are letting the city manager drive the ship and take easy street instead of making the difficult choices. Time to clean house on the council and of the staff. Makes me sick to see Kevin Romick state he cares about a building looks instead of what is in it. Maybe we can have a strip club as long as it matches the cupcake shop!

Jose Jan 16, 2014 - 11:29 am

I am convinced that Gene Buchholz is the smartest man in Oakley to sell his business before the City of Oakley ruins itself with a city manager who keeps making poor decisions.

Molly Jan 16, 2014 - 11:39 am

Obviously most of you commenting here have not been to Dollar General in Brentwood. It is trashy and ridiculously overpriced. You simply cannot compare a brand new Grocery Outlet to the one in Antioch; which is old, rundown, and in a rough area. I am thankful for their decision to change.

B-Wood Jan 16, 2014 - 1:06 pm

Molly, the difference is location, location, location! Brentwood is so spread out that it isn’t comparing apples to apples. If I am not mistaken, In Oakley, this proposal is slated for the center of town.

Jill Thompson 55 Jan 16, 2014 - 11:43 am

Dumb statement of the year so far goes to Kevin Romick. As a republican, I am surprised he does not understand economics that you need people to enter a building to buy things which then turns into tax revenue for the city. Having the best looking building does not mean people will shop there. Kevin knows better and hopefully this was a slip of the tongue. This was a no win decision for Oakley who are forced with a lower quality store versus letting the state put it up for bid and awarding it to the highest bidder.

Robert Jan 16, 2014 - 12:14 pm

I would have been more comfortable with the decision if the city had done it’s homework before making a this decision. “I will head up to Roseville and other cities to see what their facilities look like” is not a big confidence builder for Oakley residents. However, I have been to and will say that the GOs in Roseville, Concord and Pleasant Hill are nice upscale facilities, nothing like the Antioch one at all. So, don’t base all GOs on Antioch’s. I do, however, foresee a traffic boondoggle in this 1-2 block area as the GO becomes more popular with it’s competitive pricing.

Lynn Jan 16, 2014 - 12:25 pm

Beggars can’t be choosers.

B-Wood Jan 16, 2014 - 1:07 pm

What’s next, another muffler shop?

Julio Jan 16, 2014 - 2:20 pm

Are we talking about Grocery Outlet Bargain Market? If you are I feel sorry for you. Your up scale look will become ugly real quick. What a mistake. Stop listening to Mr. Montgomery folks.

nicol Jan 16, 2014 - 2:45 pm

Omg. I am wondering has anyone even bothered to give any concideration or thuaght to the fact that there are two elementary schools in this area with now even more traffic and trucks that seem to be delivering right during school traffic times ? What about the safety of the kids and the parents being able to get there kids to school. This is poor planning definantley what ever happened to safeway on ohara ? THATS what the city should be working on. As far as downtown I really like what they have done so far ace moving there and this grocery store bad choices for that area to much regular traffic with the delivery trucks in a school zone

Kati Jan 16, 2014 - 2:52 pm

These comments are discouraging. I grew up in Antioch and moved to Oakley 5 years ago. I am proud of the new downtown area so far. I feel like Antioch has fallen to where it is now because people did not stand up for their town. Instead of complaining, do something. Attend city meetings, vote, etc. Get out and about in your town, with your families. Don’t allow punks to run the town. Smile at strangers. Try to see the positive in things first, instead of the negative. My family will benefit from the low prices, and others will benefit from a job even. If you don’t like the traffic in those two blocks, go around – Cypress or Laurel are fine.

been here for a long time Jan 16, 2014 - 3:00 pm

Now my wife doesn’t have to risk her life going to the Antioch store. Instead she can go to the one in Oakley.

Barbara Santos Jan 16, 2014 - 3:33 pm

I am thrilled with the news that Grocery Outlet will come to Oakley. Don’t judge it by Antioch. Look no further than Dublin to see how the building can blend in. The new GOs are great. I worked with top chefs on Maui (yes, there was a GO on Maui!) We all loved finding unusual food products from around the world at rock bottom prices. I say, Welcome to Oakley Grocery Outlet. I will be there almost every day!

Cathy Jan 16, 2014 - 6:42 pm

I think this is just stupid. To have a council that has such lack of vision and short sighted thinking is so disappointing. The decision to go with Grocery Outlet in our downtown says to me that they think that is all we can be. I feel insulted that they had an opportunity to get out of it and didn’t.

I don’t have a problem with having a Grocery Outlet in Oakley. I just think it is disappointing that they spent all that money on a pretty downtown that could attract people to come spend money in our downtown. I want folks with disposable incomes coming and spending money on something pricey rather than having lower income people trekking out here to save a few cents on a can of creamed corn or to buy produce that will go bad in a few days.

I see the council are spending almost half a million dollars to make improvements to the civic center park across the street- for what the Grocery Outlet Center? This is Really disappointing- makes me rethink what this town is going to turn in to.

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