Competing bids for city land propose a Denny’s or Walgreens

City Hall

Hollister officials are weighing two bids from developers – one proposing to build a Denny’s restaurant and the other a Walgreens store – to buy a city-owned plot on McCray Street.

Council members Monday considered the two bids received in January for 1.47 acres near the intersection of the Highway 25 bypass and Tres Pinos Road. The Council of San Benito County Governments handed over the property as part of the bypass’ completion in the spring of 2008, while the land has been unneeded for traffic.

City leaders have indicated they want to sell the land for commercial development and officials have said they would want a provision in any sale contract to mandate a development plan.

Hawkins Companies submitted the proposal to buy the land for $900,000 and build a 14,550-square-foot Walgreens store. The commercial developer, which has built more than 90 Walgreens stores, also has an option on the neighboring Gibson property required to complete the project, according to a city report.

Harbhajan Dadwal and other developers submitted the proposal to buy the land for $702,445 and build a Denny’s. The same developer operates three Subways, a Mountain Mikes and Water World locally. The group proposes building a 5,000-square-foot family dining restaurant, most likely Denny’s, according to the city report.

The two proposals also included other data, including sales-tax information provided by a consultant that examines such information for the city.

The estimates show that Walgreens, on average, provides about $24,000 annually in sales tax, while a Denny’s would provide $12,000 to $13,000 with no alcohol sold and $16,000 to $18,000 with alcohol sold, according to the city.

Additionally, Walgreens stores generally employ 25 to 30 full- and part-time workers. Denny’s employs 50-plus jobs because it is a 24-hour business, according to the city report. At Walgreens, pay ranges from $9 per hour for clerks to $113,075 paid to pharmacists. At Denny’s, it ranges from $32,352 for cooks to $55,346 for managers.

City officials will pick up the discussion at a future, undetermined meeting.

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