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Update spurs merchant worries

Owners express concern they’ll be forced out after supermarket announces plans to renovate

Posted: December 4, 2011 1:30 a.m.
Updated: December 4, 2011 1:30 a.m.

The Vons supermarket at Sand Canyon Center in Canyon Country. Its recent plans for renovations have nearby merchants concerned they will not be allowed to stay in the Canyon Country shopping center much longer.


The Vons grocery store in Santa Clarita on Soledad Canyon and Sand Canyon roads has tentative plans to expand, causing small-business owners located in the shopping center to complain of raised rents and fears of being forced out.

Some of the small businesses have been located at the Sand Canyon Shopping Center in Canyon Country for decades.

Vons is owned by Safeway, and Property Development Centers is a wholly owned subsidiary of Safeway Inc. The development company acquired the Sand Canyon Shopping Center earlier this year, said Gilbert V. Gonzales, director of public affairs and government relations for Vons.

“Property Development Centers intends to remodel the entire shopping center, including adding new landscaping, a new parking lot, new site lighting and updating all of the building elevations,” Gonzales said.

Starting in the spring of 2012, the shopping center is going to be transformed into a new community gathering place for the citizens of Santa Clarita and the surrounding community to enjoy for years to come, Gonzales said.

Business owners, however, fear they’ll be forced out of the center when their leases expire next year. Other tenants who have been renting on a month-to-month fear they may be forced out sooner.

The previous landlord knew the center was going to be sold and kept tenants on a monthly rental basis without renewing leases, said Curt Waite, owner of My Video Store. Waite has been in the center for 12 years.

Rent increases
“The new owners sent out their new rent fee structure on Sept. 1, effectively raising everyone’s rent,” Waite said. “Mine went up 30 percent.”

The rationale given for the steep rental increase, Waite said, was that leases included a cost of living increase that hadn’t been applied for the last five years of the lease. His contract called for annual increases of 3 percent, not to exceed 5 percent.

“They added the annual cost of living increase for what would have been the last five years and raised my rent retroactively,” Waite said.

Waite, who has a lease until August 2012, said he’s only been paying his previous rent plus 3 percent, for one year cost of living increase, claiming the owners can’t raise his rent retroactively.

“We took a stand. As a person, I’m not going to pay it. Some stores have had to raise their rates and cut employees,” Waite said.

In the meantime, Waite said he’s been receiving invoices for the balance he hasn’t paid.

Other business owners said they cannot afford the increase or believe they will have to move, but declined to speak on the record. Others did not return phone calls.

Property Development Centers National Leasing Manager Carmelita Botelho said she could not comment for the story and referred the question of tenant concerns back to Gonzales at Vons.

Neither Vons nor the brokerage firm, CBRE, would comment on the issue for the story.

Upgrade plans
Plans have been submitted to re-façade the center, including parking lot and landscaping upgrades, said Paul Brotzman, director of community administration with the city of Santa Clarita.

“They have indicated they’re going to expand the Vons, but have not submitted plans to the city for an expansion yet,” said Damon Letz, city building official in the Building and Safety Division.

A leasing flyer from brokerage firm CBRE, however, features a photo of Vons grocery store with the words “Renovation Coming Soon” stamped over the graphic.

And in the CBRE’s lease posting on LoopLink, an online property marketing engine, CBRE states the store is “soon to be expanded and remodeled.”

Other offers
Common area maintenance fees are also going up, said Waite.

One of the business owners located in the center said he expects to be priced out of the market at the center. His is also on a lease which, like Waite’s lease, expires next summer.

In the meantime, Waite said he’s been visited by brokers for four different shopping centers in Canyon Country.

“They’re offering (leases at) $1.25 per square foot triple net plus pay for moving expenses and build-out,” Waite said. “That’s huge.”

Waite, who purchased a barbershop in the center a while back and combined the business with his video store, said he would jump on the offers, but he would only be allowed to move his video store into the other centers.

“I can’t do that to the barbers, they’ve been there for 12 years,” Waite said. “I can’t leave them, that’s their livelihood.”

It’s going to be a centerpiece when they’re done, he said. Still, like other business owners, Waite cannot afford the new rates and expects the end result is that he will eventually have to move.


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