Safeway proposes Issaquah Highlands store
October 18, 2011
By Warren Kagarise
City Council allows gas station for grocer, a key factor in decision
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 firstname.lastname@example.org. Comment at www.issaquahpress.com.