Negotiations Ongoing for Supermarket in South Milpitas

By Ian Bauer, Milpitas Post
Posted:   08/07/2015

City of Milpitas and two developers currently working to build a 371-unit mixed-use housing project near the corner of McCandless Drive and Great Mall Parkway are hoping to gain a long-awaited grocery store in that area.

Edesa Bitbadal, the city’s economic development manager, said the development known as District One is expected to include housing, restaurants and a grocery store. She added the project is advancing but no grocer has been secured.

“In short, we don’t have a name of a grocery yet, they’re still working on it,” Bitbadal told this newspaper Friday. “They do have prospects.”

She added the city along with the project’s developers Newport Beach-based Lyon Communities and Lockehouse Retail Group of San Mateo are working to find that tenant for the project that envisions a seven-story, 237,000-square-foot parking garage and an adjacent seven-story 554,270-square-foot retail and multi-family building.

Bitbadal said the total retail square footage is 48,000 square feet, which includes the grocery store.

“We’re looking basically for a high quality grocer that will provide organic and ready-made food as well,” Bitbadal said, adding the project means a full-service grocery store would serve southern Milpitas, across from the Great Mall.

“We’re very excited about the partnership that Lyon and Lockehouse have; it’s a good partnership and we were the ones that had a lot to do with that as well…the city is working very closely with both of those entities.”

Bitbadal claimed when the plan comes together in about two year’s time — with still unknown names of grocers though Trader Joe’s or Sprouts Farmers Market type stores are being considered for that site — those living in southern Milpitas will be pleased.

“I think it will make everyone very happy,” Bitbadal said.

City staffers say the District One project continues what was being sought under the Milpitas Transit Area Specific Plan, which calls for redevelopment near the Great Mall.

District One ran into difficulties last year when city planners believed its prior developer, Integral Communities of Newport Beach, requested fundamental changes to a project that had been approved years earlier.

Last December, Milpitas City Council was scheduled to review prior planning commission recommendations to deny two Integral Communities projects including District One – first adopted by the council in 2010 for more than 1,300 units and 75,000 square feet of retail and a spot for a grocery store along the 1400 block of McCandless Drive at Great Mall Parkway.

By 2014, Integral requested decreasing the project’s number of dwelling units to 826, replaced high-density apartment units with larger for-sale townhomes and reduced retail to 57,000 square feet along Great Mall Parkway.

City planning staff stated the project had become inconsistent with the city’s transit area plan.

In the end, Integral decided to withdraw the project.

The Newport Beach-based apartment community developer bought the 5-acre site for $22 million from Integral Communities.
William Lyon Homes, related to Lyon Communities, has built other communities in Milpitas.

According to Bitbadal, District One will likely be built by summer 2017.

“It will be just in time for the opening of the BART station,” she said. “The project timeline is the same as the grocery store.”