Safeway proposes Issaquah Highlands store

October 18, 2011

By Warren Kagarise

City Council allows gas station for grocer, a key factor in decision 

Safeway planners proposed a modern Issaquah Highlands store in a recent permit application to the city. Contributed

The plan to open a grocery store in the Issaquah Highlands — a still-unmet target from early goals for the community — reached a milestone in early October, as Safeway submitted a proposal for a store in the neighborhood.

Meanwhile, City Council members adjusted longstanding development rules to allow a gas station in the highlands — a critical factor in Safeway’s proposal to build the store.

In a unanimous decision, council members adjusted the agreement between the city and highlands developer Port Blakely Communities to allow a gas station in the neighborhood. The council also added rules to the development agreement to require a gas station to be built alongside a grocery store.

“Obviously, a lot of grocery stores have passed on the space in the last 10 years,” Councilman Mark Mullet, a highlands resident, said before the Oct. 3 decision. “I can see from a business standpoint how having the fueling station gives it that little extra incentive that makes it a more viable package.”

Safeway applied for a city permit on the same day a representative from the California-based chain addressed the council about the gas station issue.

The company is considering a parcel along Highlands Drive Northeast between Northeast Federal Drive to the north and Northeast Ellis Drive to the south.

John Shaw, consulting director of operations for Port Blakely, said the company needed the agreement adjusted to allow gas stations in order to conclude a grocery store deal.

“In several years of trying, as we all know, Port Blakely has come close, but has not landed the grocery store,” he said during a hearing before the council decision. “In our recent conversations with grocers, we have realized that we’re unlikely to attract a grocer in the highlands if the grocer does not have the ability to offer gas.”

Safeway operates a store — sans gas station — in the Issaquah Commons shopping center along Northwest Gilman Boulevard.

Decision bolsters plan to add retail options

Port Blakely executives said neighborhood residents, in a recent survey, ranked a grocery store and a gas station as the most sought-after amenities.

“In the modern world, grocers view the ability to sell gas just like they do the ability to sell bakery goods and meat,” Shaw told council members. “It’s part of the business.”

David Livingston, a national grocery consultant based in Wisconsin, said Safeway and other grocery chains tie gasoline sales to customer-loyalty programs and other offers.

“It certainly does complement the store, and I could see why they would want to do it,” he said. “They’ve obviously found that it works for their business model, but it’s not absolutely necessary. They may need it in that particular situation in order to get their sales forecast.”

In July, Port Blakely announced a deal to sell 14 acres for a proposed shopping center to Florida-based Regency Centers. The deal calls for Regency Centers to purchase the land and build a 175,000-square-foot shopping center along Northeast High Street and Northeast Park Drive — a site once set aside for another retail destination called The High Streets.

If the transaction is completed, construction could start as early as next year.

The proposed Safeway and a planned Regal Cinemas theater could anchor a planned retail complex in the highlands — called Grand Ridge Plaza in recent promotional materials. (Port Blakely and Regal Cinemas announced the theater in August 2009.)

Jeff Parker, a Safeway real estate manager, said the grocery chain intends to open a store in the highlands.

“We are working with Regency to locate a store in the highlands,” he told council members. “We’re very excited for that opportunity.”

In the past, boutique grocers, including Central Market and Whole Foods Market, considered and decided against opening highlands stores. Safeway is the No. 2 grocery chain in the United States after Kroger.

“Safeway has always just been considered the average, plain-vanilla grocery store,” Livingston said. “No matter how much they upgrade their stores — and so does everybody else — they’re still average, plain vanilla.”

Warren Kagarise: 392-6434, ext. 234, or wkagarise@isspress.com. Comment at www.issaquahpress.com.

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Comments

4 Responses to “Safeway proposes Issaquah Highlands store”

  1. bryan on October 20th, 2011 10:12 pm

    it is difficult for a lay person to understand that if stores make so much money from gas stations, why every grocery store is not also a gas station, and why all gas stations are not also grocery stores. i just don’t get it. if you need gas to make a grocery store profitable in the highlands, this tell me that groceries are not profitable unless you also sell gasoline – excuse me – fuel…..

  2. Rob on October 21st, 2011 10:34 am

    Looks like I’ll still be making the trek to QFC. Yet another unfulfilled promise made by Port Blakely to IH residents. Safeway is far far far from boutique or high end. Maybe next we’ll get a TJMAXX or Ross.

  3. Wendy on October 21st, 2011 12:40 pm

    I’m happy to see Safeway come into the neighborhood – it will be good quality, good prices and convenience.

  4. Jess on November 6th, 2011 1:55 pm

    Speaking from the perspective of someone who lived in the highliands just WAITING for something exciting to be put in, and as a store manager of a smaller sized format grocery store, I will be completely dissapointed if safeway is truely put in there. They tend not to care about their neighborhood. They operate blanket grocery stores, where you don’t get the feel that a customers input is important. You get to go in to ever safeway ever created and know, no, you are not special, you are just like everyone else. And were we all really too lazy to go about a mile/mile and a half to that next safeway?. If I was going to safeway anyway, I would say, ah, I’m just going to go to downtown issaquah to get the rest of my errands done. It defeats putting a grocery store there to begin with. Maybe people could ust move to Klahani. If you’re not going to do something right, don’t do it at all.

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