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Is This Vacant Retail In San Jose A Casualty Of The Grocery Store Wars?

The empty parking lot of the former Nob Hill store at 7076 Santa Teresa Blvd. in San Jose

Some of the empty anchor storefronts in San Jose are creating quite a controversy. Two grocery stores have vacated large retail locations in San Jose, but still hold onto the leases. The spaces have remained vacant, causing blight within the retail centers, the East Bay Times reports.

Nob Hill, which is owned by Raley’s, left 7076 Santa Teresa Blvd. in 2015, but maintains the lease through 2021. Rats moved into the empty space and became problematic for neighboring businesses. Safeway also vacated its location at Payne Avenue and Winchester Boulevard, but still leases the space.

City officials may consider legislation to limit the amount of time these spaces can remain vacant. Some local leaders have speculated these stores have been left vacant to keep out competition. The Safeway in San Jose closed a few years ago after another Safeway opened in Campbell a mile away. Nob Hill maintains a store three miles away from the Santa Teresa center.

Raley’s spokesperson Chelsea Minor said the store closed at Santa Teresa due to declining sales and increased competition. The grocery chain extended its lease with the hopes of putting in a distribution center, but that never happened. She told the East Bay Times that Raley's offered the center’s owner, Retail Opportunity Investments Corp., a chance to sublease the space, but has not heard back since May. Minor said Nob Hill would be open to the idea of subleasing to another grocer.

ROIC leaders point the blame at Raley’s, saying the grocer does not want to surrender the lease and is trying to protect its market share.

Creech, Liebow & Roth shareholder Peter Liebow said this is an unusual situation because commercial leases typically allow termination if a spot is left vacant for a long period.

Meanwhile, some improvements have been made. ROIC increased security around its shopping center, and the rats have been exterminated.