City leaders say brick and mortar grocers are hesitant to build downtown for now
VANCOUVER — The city of Vancouver is bagging the idea of a grocery store at the long-vacant Block 10 property downtown.
“We’re feeling the timing might not be right, given all the uncertainty in the (grocery) industry,” said Chad Eiken, Vancouver’s community and economic development director at a work session on Monday. “Frankly, there’s a need for more residential units downtown. What we’ve heard is that, although there are many more units planned, they like to physically see the units, as opposed to counting units that are in the permitting process.”
Block 10 is an acre of land bordered by Eighth and Ninth streets to the north and south, and Columbia and Washington streets to the east and west, just to the northeast of Esther Short Park. The vacant lot was formerly part of the Lucky Lager Brewing company property, but was purchased by the city in 1993.
In 2017, the city selected Gramor Development, the company responsible for much of the new construction along the waterfront, to hopefully bring a grocery store to Block 10.
“Our feeling is that if Gramor isn’t able to bring a grocer here, more than likely no one else can,” said Eiken, “at least at this time.”
The city had hoped a grocery store could bring relief to a food desert in downtown Vancouver, but there currently aren’t enough residential units in the area to make it attractive to brick and mortar grocers, especially in the uncertain climate that largely began with Amazon’s purchase of Whole Foods in 2017.
“It’s a little bit of a ‘Field of Dreams’ kind of a scenario where we just don’t have the rooftops yet to attract what we want and, sadly, if we continue to wait we will have a piece of vacant property that’s not producing any revenue, with a property tax or employment-based tax for some period of time to be determined,” said Councilor Erik Paulsen. “We’ve already had 20 years of that, do we want to have 20 more years of that just to get a grocery store that may or may not materialize? I don’t think we do.”
Eiken said grocers that Gramor officials had talked to said they wanted to see actual filled residential units, versus ones that are currently in the pipeline. Vancouver expects at least 5,200 more residents will live downtown within the next few years.
With the chances of a grocery store at Block 10 looking less and less likely, Eiken says he approached Holland Partner Group to see if they would have any interest in relocating their headquarters to the prime downtown space.
Holland isn’t a well-known company, but they are a big name in the property management space. As of 2017 they owned 15,000 residential units and managed another 25,000. Eiken said Holland has handled around $10 billion worth of development and redevelopment projects since 2001. The company is currently working to build a new fourth tower in the Vancouvercenter complex south of the vacant Block 10 site, featuring 116 more residential units and 2,000 square feet of retail space.
Holland, with its 175 employees (and growing), is currently headquartered at 1111 Main Street downtown but had been considering a move to Camas. Eiken said a deal with them would keep the growing company downtown, and also provide additional housing, office, and retail space.
The current proposal would be for an 11-story, 110,000-square-foot office building. 60,000 square feet of that would serve as the corporate headquarters for Holland Partner Group. Another 50,000 square feet of that would be leased out as office space. The company is also considering creating 3,000 square feet of space to be used as a business incubator, for start-ups to use temporarily with the resources of a major corporation.
The company is also proposing a seven-story housing complex which Eiken said would be workforce housing, meaning it would be targeted for people making 80-percent of the area’s median income.
Vancouver Mayor Pro Tem Bart Hansen said he believes city council isn’t in the business of bringing a grocery store to the downtown area. “I think we’re in the business of creating an economic environment in which one can flourish,” he said.
Despite the change, several council members said they are still strongly in favor of finding a place for a grocery store in or near the downtown core.
“I don’t want to settle for a store that’s going to be almost a Minit Mart with a few bananas and a few apples and we’re going to call it a grocery store,” said Hansen. “I want a full grocery store and that’s going to be difficult to do. We’re going to have to provide parking, there’s going to be access. That’s not going to happen on Block 10. That’s going to happen off Mill Plain. That’s going to happen off Fourth Plain.”
Eiken said another attractive element of Holland’s proposal is that, if approved, they would likely break ground by the end of the year. Block 10 is designated as an Opportunity Zone, meaning the company stands to save of capital gains taxes if construction starts soon enough.
An official vote to approve an end of negotiations with Gramor and enter a deal with Holland will happen at the city’s May 13 meeting. Council member Ty Stober said he realizes that circumvents the usual process of putting the development proposal back out for another round of bidding.
“I’d love to have a competitive bid, but I also very much recognize that we’re in a unique situation here and feel like Holland will, especially since it’s going to be their headquarters, I think they’re going to make sure that it’s a high quality add,” said Stober.
Several council members made a point of thanking Gramor for their efforts in trying to secure a business to build at Block 10, and said they feel the city’s relationship with the developer remains strong.