Greg Geertsen is managing partner of Merlone Geier Partners, the San Francisco-based commercial property investment firm that for the past six years has been developing the 340,000-square-foot Deer Creek Village retail and office center in Petaluma.
Construction crews are set to start in May on preparing much of the 36.5-acre site between Highway 101 and North McDowell Boulevard at Rainier Avenue for the first buildings to come out of the ground as scheduled in June. The first to get under way will be for the anchor tenant for the $65 million project, a 130,000-square-foot store, lumber shed and garden center for Santa Rosa-based Friedman Bros. Home Improvement.
Midstate Construction of Petaluma has been estimating costs for the project.
Merlone Geier acquired the Petaluma project in 2009 from Downey Savings & Loan, which had proposed a shopping center on that site several years before. Delays have included major changes to city land-use policy, legal action from project opponents, the economic recession and the loss of previous anchor tenant Lowe's Home Improvement in 2011.
Merlone Geier, originally started in 1993, acquires, develops and redevelops retail and retail-oriented mixed-use properties on the West Coast. Properties are clustered in the Sacramento, Reno, Los Angeles, Seattle and Portland, Ore., metropolitan areas. A previous North Bay investment was the turnaround of 337,000-square-foot Gateway Plaza shopping center in Vallejo from 1997 through 2003.
Mr. Geertsen is set to speak at Construction Conference 2013, hosted by the Business Journal in Santa Rosa on May 15. He spoke with the Journal about what's next for the Deer Creek Village project.What is the timeline for Deer Creek Village?
[caption id="attachment_73070" align="alignright" width="200"] Greg Geerten[/caption]
Greg Geertsen: The groundbreaking ceremony was on May 2. Site work is set to begin May 28 and building construction in June. All the site work south of Deer Creek will be completed as part of phase 1, including improvement to the creek itself.
The contract for site work went out to bid around May 3. The Friedman's building contract is set for bid around May 13. Bidding on building three small shop buildings is scheduled to open around May 27. There will be additional buildings going out as leases are signed during the summer.
The project has a significant amount of public open space, plazas, trails as well as a dog park.How different is construction and retail in 2013 vs. when the project was first proposed?
Mr. Geertsen: The retail environment has improved and getting stronger. Contractors are much busier now as more projects are coming on line.What progress has there been on leasing beyond the anchor tenant?
Mr. Geertsen: We have five deals in lease negotiation and several others in a letter-of-intent stage.
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. 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.What are business conditions like in other Merlone Geier markets?
Mr. Geertsen: For the most part, strong and/or improving.