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North Bay Business Journal

Monday, March 18, 2013, 7:00 am

Large retail projects move toward reality

Barlow tenants move in; Deer Creek Village, Bell Village to start

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    Several large retail construction projects are reaching completion or getting started in Sonoma County this year in Petaluma, Sebastopol and Windsor.

    From early financing challenges to local opposition to the original 300-home concept to two fires during construction, the redevelopment of the former Barlow Co. apple-processing plant at the eastern gateway to Sebastopol has faced a number of challenges. Construction on 96,000 square feet in 11 new industrial and retail oriented buildings that are part of The Barlow business park (707-824-5600, thebarlow.net) started early last year and reached shell completion early this year.

    “Tenants are in the midst of tenant improvements,” said April Karr, marketing director.

    The first of the couple of dozen signed tenants set to move in to the new space was Kosta Browne Winery’s crush operation, which made it in time for the mammoth 2012 harvest. The first public-facing tenant presence is a tasting room for La Follette Wines, which was set to open in mid-March. Several more are scheduled to open in mid-April and the rest are set for tenant-improvement completion throughout this year.

    The complex contains beverage production facilities such as longtime tenant Guayaki Yerba Mate plus soon-to-open Spirit Works Distillery, Wind Gap Wines, Woodfour Brewing Co., Warped Brewing Co. and Taylor Maid Farms coffee roaster and tea supplier.

    Two buildings that burned down in the fire were being rebuilt last week. MacPhail Winery has a production facility going into one. In the other, newcomer Freeman Wines is set to have a tasting room in a couple thousand of the 12,000-square-foot structure.

    Two new regional malls in Petaluma

    Dirt is set to start moving in early May on the 36.5-acre, 315,000-square-foot Deer Creek Village (415-693-9000, deercreekproject.com) shopping and professional office project site between Highway 101 and North McDowell Boulevard and south of Rainier Avenue, according to Greg Geertsen, a partner with project owner Merlone Geier Partners of San Francsico.

    That would clear the way for construction to start in June on a 130,000-square-foot Friedman’s Home Improvement store, lumber shed and garden center to anchor the $65 million project. Three smaller retail buildings along North McDowell as well as improvements to Deer Creek, which runs across the northern quarter of the site, a dog park and trail would be built at the same time as the Friedman’s store.

    “We’re happy to get started there,” Mr. Geertsen said. Midstate Construction of Petaluma has been estimating costs, and bids on the site work is set to open in early April.

    Six leases are currently out for signature, but the developer isn’t disclosing them publicly yet. Those include deals that would average 5,000 square feet for the smaller retail buildings.

    Also in the works are 20,000- and 38,000-square-foot deals for junior anchor tenants in a three-part building to the north of Friedman’s, leaving 15,000 square feet to lease in that structure. If those deals are inked soon, construction of that building may start in July, Mr. Geertsen said.

    “The challenge with leasing this project is that no one believes it until it is under construction,” he said.

    Three approved buildings — 6,000-square-foot restaurant and grocery buildings and one with 40,000 square feet for multiple tenants — to be built north of the creek will have to wait until they attract leases or demand increases, he said.

    This is in addition to the 240,000 square feet of shops reaching completion later this year at Regency Centers’ Target-anchored East Washington Place regional mall also in Petaluma.

    Windsor trailer park to be transformed

    Late this year, construction could begin on the first ground-up store project for Oliver’s Market in the Bell Village housing and commercial project in Windsor, according to Komron Shahhosseini, site acquisition and development manager for Santa Rosa-based OSL Management (707-535-3200), which is guiding the $70 million-plus project.

    “We’re definitely ready to welcome them to Windsor,” he said.

    The Rohnert Park-based grocer, which has three locations in Santa Rosa and Cotati, signed a lease earlier this year for a 32,000-square-foot store in Bell Village. The store would anchor 83,500 square feet of commercial space to be built in the first phase, along with 80 of the approved 387 stacked flats and townhomes.

    OSL is in various stages of discussions with prospective commercial tenants. A number of them are local ventures, such as a dry cleaner with two other locations and restaurants that want to expand.

    “We’re not doing the traditional cattle call, because we’re looking for something special,” Mr. Shahhosseini said.

    OSL Management plans to submit construction permit applications for the project in the next two to three months and anticipates about six months before permits may be issued.

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