How area consumers, downtown boosters are reacting to the news
of enormous project
The waves created by a proposed mall in Gilroy that would rival
San Jose’s Valley Fair shopping center could be no more jarring to
surrounding communities than a gentle rocking. Or it could hit with
enough force to capsize downtowns already struggling under the
weight of millions of square feet of retail already centered in
Gilroy.
How area consumers, downtown boosters are reacting to the news of enormous project
The waves created by a proposed mall in Gilroy that would rival San Jose’s Valley Fair shopping center could be no more jarring to surrounding communities than a gentle rocking. Or it could hit with enough force to capsize downtowns already struggling under the weight of millions of square feet of retail already centered in Gilroy.
Consumers seem to love the idea, while downtown business owners are putting on a brave face and repeating the mantra that personal service alone will thwart the aggressive marketing of a billion-dollar retail conglomerate. What people seem to agree on is that the fate of small businesses lies in how small shops and downtowns respond to the added competition.
For some residents, the prospect of a regional shopping center closer to home is exciting.
“It would be great to have upper-end stores like Macy’s,” said Frances Valdez, a Morgan Hill resident. “A lot of people want to keep Gilroy small, but it’s already too late.”
As first reported last week in The Pinnacle, the city’s planning department and economic development corporation had been talking with Westfield officials about the possibility of the mall for several months before an application for an urban service area was filed July 21.
The first phase of the project would develop 750,000 square feet of land surrounding the old Wal-Mart site on Arroyo Circle, with potentially 1.5 million-square feet of retail phased in over five to eight years.
Valdez and her husband welcomed the idea of stores such as William-Sonoma and Crate and Barrel.
“If they had any of those upscale stores, I would spend the revenue here,” Valdez said.
That’s a view shared by Daniel Ehrler, executive director of the Morgan Hill Chamber of Commerce. Ehrler believes that while “there will be some rub” with existing shopping centers in Morgan Hill, it’s the south San Jose markets that will likely be affected by tens of thousands of consumers shopping closer to home.
“People in Morgan Hill, Gilroy and Hollister will more likely stay here instead of trekking to San Jose,” he said.
Two of the largest shopping malls north of Gilroy are owned by Westfield – Valley Fair and Oakridge.
Ehrler understands that for a downtown to compete with a potential Nordstrom’s or Macys, it needs to offer what malls can’t – a gathering place. You needn’t look further than Santa Cruz, Palo Alto or Los Gatos – all of which compete with huge regional shopping centers – to realize unique and creative eateries, entertainment venues and retail shops providing an experience malls do not.
“You need to have great places to eat and stroll,” he said. “Morgan Hill has an opportunity to develop its own niche as a gathering place.”
Ultimately it will be consumers such as Gilroy resident Alex Serros who will vote with their pocketbooks whether the downtowns are providing a profitable mix of businesses.
“It would be great to have all those shopping places close by,” he said, though he did wonder what the effect would be on downtown. “They really need to diversify there.”
The impact of 750,000 square feet of retail on traffic didn’t seem to faze Serros.
“As long as it stays on that side of town, I don’t care,” he said. “There’s already traffic so I go over there [to the shopping centers] during the week. Leave it to tourists on the weekend.”
Other locals, Tonantzin Mitre, a Gilroy resident who works in Hollister, speculated that the already heavy traffic along Highway 101 exits will be worse.
“They need to open up that road,” Mitre said, of Camino Arroyo, the street that connects the Pacheco Pass and Gilroy Crossings Shopping Centers. The street dead-ends instead of connecting straight through to Arroyo Circle at Sixth Street.
Mitre expressed mixed feelings about a possible shopping center.
“I would have preferred a Whole Foods or a Trader Joe’s,” she said. “I’m not sure Gilroy needs a mall that size. At the same time, it’s a pain to drive to San Jose or Salinas.”
Though she has reservations about the mall, Mitre said she would shop there if it opened and would especially spend time there if it had a movie theater similar to the AMC Theater that opened at Oakridge Mall. Westfield redeveloped Oakridge, completing renovations in 2003.
The mall could spell trouble for local small business owners, though Hollister Downtown Association President Marilyn Ferreira seemed optimistic that Hollister’s retailers would be fine.
“You have a major shopping center in Salinas,” she said. “You already have the box stores in Gilroy. It’s our goal to have the downtown area be a destination spot.”
Ferreira stressed that businesses in downtown Hollister offer something department stores don’t – personal service.
Kelly Owczarzak, owner of Kelly’s Gift Place on San Benito Street in Hollister, said she and her staff strive to offer the best customer service.
“We pick up unique items,” she said. “We are putting in a coffee shop and a bookstore. We try to come up with unique promotions.”
As for Owczarzak, she said she would be unlikely to shop at a mall in Gilroy herself – she prefers to support small business owners.
Larry Cope, the director of Gilroy’s Economic Development Corp., agreed with Ferreira that the downtown businesses have to offer something different from a shopping mall or big box store to survive.
“It should be coming down and doing unique shopping, eating at a sidewalk cafe,” Cope said of downtown Gilroy. “The new Arts and Cultural Center will draw more people in. They will come down for a show and maybe stop for dinner before.”
Despite the impact the mall might have on smaller businesses, Gilroy city officials see it as a great opportunity.
“From the first glance, this is a very positive project for Gilroy,” Cope said. “We are working hard to make this come together. We want to gain the increased sales tax.”
Cope, who has stressed the need for higher paying jobs with benefits, said the center would provide some management and financial positions with better wages, though some of the jobs could be the lower-paying, part-time jobs that are abundant in retail stores.
William Faus, the Gilroy planning division manager, said the department has several concerns that will be dealt with as Westfield turns in more applications.
“Traffic is certainly paramount in everybody’s minds,” Faus said.
Other concerns include air quality, the conversion of prime agricultural lands to commercial use and hydrology since the area is prone to drainage issues during rainy seasons.
But Faus said it is too early in discussions to comment on specific plans to mitigate the concerns.
“It’s going to be a long process – a very complex process,” Faus said. “In terms of the horse charging out of the gate, it’s not that kind of project.”
City editor Dennis Taylor contributed to this report.
