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North Bay Business Journal

Monday, December 31, 2012, 6:30 am

Trends for 2013: Retail, hospitality construction rebound

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    The hot sectors for North Bay construction in the coming year will continue to be education, affordable-housing and health care, but retail and hospitality work is making a comeback.

    Petaluma-based commercial general contractor Midstate Construction has crews working weekends and evenings to stay on top of about 15 projects going right now, and more large projects are available closer to home. The company has six contracts totaling $30 million on the Target store-anchored East Washington Place regional mall under construction in Petaluma.

    “The coming two to three years are going to be the years of renovations,” Mr. Nelson said. “New stuff is more expensive, so it pays to renovate.”

    In the next few years, fewer new buildings are expected to be built, particularly speculative office and industrial projects, he said. Vacancy rates for such space in the North Bay’s Highway 101 corridor are above 15 percent.

    Owners of retail and hospitality properties are in the business of attracting visitors, so they tend to spruce up and remake their properties periodically, he said. Before the financial slowdown in 2008, there was ongoing investment in renovations and new buildings, but that shifted to upkeep for the past four years.

    For example, Midstate earlier this year finished a $40 million major addition to The Meritage Resort & Spa in south Napa and is about to start a renovation of the lobby, 97 of the 228 rooms, restaurant and grounds of Sonoma Mission Inn & Spa, which Fairmont Hotels fully acquired in March.

    Chicago-based Simon Property Group is renovating the Coddingtown mall, in which it shares ownership with Codding Enterprises of Rohnert Park, and is in the midst of a refresh of Santa Rosa Plaza. Beside Target, there are now eight new tenants lined up for 20,000 square feet in Coddingtown, including Subway and Coddingtown Grill, a new venture by the owners of Chicago Chop House, according to Brad Baker, Codding president and chief executive officer.

    Brad Baker

    Brad Baker

    “Things are improving and looking better,” he said about the prospects for tenants.

    Codding Construction plans to start construction on a 50,000-square-foot retail building at the former Los Robles Lodge site on Cleveland Avenue just south of the mall. The expected tenant is Dick’s Sporting Goods, also opening a store in East Washington Plaza, according to Mr. Baker. It is set to be done in spring 2014, around the same time Codding is set to complete work just to the north on a new single-story Target store at Coddingtown.

    Construction of 96,000 square feet in 11 new light-industrial and retail buildings is moving to the tenant-improvement stage at The Barlow redevelopment project at the eastern gateway to Sebastopol. Kosta Browne Winery’s winery opened in December. Other occupancies are planned in the first half of 2013.

    In the retail makeover category is half-leased Napa Town Center. The 123,000-square-foot open-air mall in downtown Napa is getting a $70 million redevelopment as a 156,000-square-foot “lifestyle” retail center, now called The Shops at Napa Center. The renovation, which includes new exteriors and common-area treatments such as planters and fountains, is set to be complete in spring 2014.

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