Save  Midtown Shopping Center 

Update:  On November 20, 2000, the Palo Alto City Council heard public testimony related to conversions from retail space to office space, and passed a temporary ordinance to restrict such conversions.

Harmony is opening as a wholesale bakery on Park Avenue.

A great website for current midtown happenings is http//www.midtownresidents.org

updated 05/01/03 - bookmark and check back to see how things proceed!

(map of area in Palo Alto, California)

Click Here for a drawing of Midtown showing office uses and dates of conversion:

The conversion of retail space into office space in Midtown Palo Alto has been underway for the past year, and the larger issue of loss of small neighborhood businesses has been present for much longer.  The former Harmony Bakery site is the most recent example of this conversion. Harmony is now moving from a high visibility location at the corner of Middlefield and Colorado to a location inside the Coop Market.  A driving issue in their search for space is that much of Midtown is now converted to office use. 

The Problem: Traditionally, retail space in high traffic areas commanded a premium in rents.  With the large accumulation of capitol in investment and internet related businesses, and a shortage of office space driving up office rents, it now makes financial sense for these businesses to relocate their office workers in retail areas, and it makes financial sense for landlords to throw out their retail tenants in favor of businesses with office workers, but no retail interest.  Midtown represents a special problem because there is comparatively less space for retail businesses than in the University Avenue or California Avenue areas, so each office-use conversion represents a larger incremental loss of retail space.

Disclaimer:  I am a Midtown Palo Alto shopper.  I am not a business owner, landlord, or tenant.  Like most midtown shoppers, I frequent Harmony bakery, the coffee shop behind Starbucks, the video stores, Midtown hardware, Mike's Cafe, the dry cleaners, and most of the other businesses in the area.  I have also shopped at many of the businesses that have gone under because of increased rents.  My only interest is to see healthy retail uses preserved in the high traffic areas of Midtown, and to see the non-retail uses that now occupy the space of former retail stores returned to retail use.  If this trend is not reversed, the local retail businesses will simply give up and move out of the area, as Nickie and Phil Nasr of Harmony Bakery have contemplated. 

If nothing is done, the curious combination of large storefront windows covered by opaque blinds will then become the principal distinguishing architectural feature of the "Midtown Shopping Center".

Former Site of Harmony Bakery, 2750 Middlefield Rd. (owned and operated by Nickie and Phil Nasr) has been an institution in Midtown for the past 11 years, and the annual winner of the "Best Bakery in Palo Alto" awarded by the Palo Alto Weekly for the past 5 years. A great place to buy fresh bread, meet your neighbors, or play "guess that tune".  Forced to leave by a 2X increase in rent, we are all waiting to see what use takes this place.  Given that the rent increases are driven by office uses, it stands to reason that this will also convert to office space. 

Examples of Retail to Office use Conversions

 in Midtown Palo Alto:

Midtown Office Conversion Example #1

 No name anywhere on building

2700 Middlefield Rd

(1/2 block down Middlefield Rd from old Harmony Bakery site)

This large building is the former site of Scherba's Auto Parts, a great place to buy automobile parts and meet your neighbors in the parking lot who were also changing their batteries.  This building is now the Feschbeck Brothers stock hedge fund, with cardlocks on the doors.  As you return from Papa Murphys, Best Video, or Midtown Cleaners to the left of the large building, you can peer through the blinds and watch the excitement as traders short stocks.  But you won't be able to buy windshield wipers here anymore.

Sign on front door - note cardlock on door to keep out inadvertent shoppers like myself, and the inviting sign - I wonder what the rear entrance is about?

Dang - not inviting at all!

Midtown Office Conversion Example #2

 Knowhere

2731 Middlefield Rd

(directly across from old Harmony Bakery site)

The brown building on the right used to be the site of Bergman's shopping center, a Midtown institution for over 40 years.  Now an updated and snappy modern building, the ground floor of this building is a high technology training center, and the upper floor is a startup company incubator.  I walked inside to see what is being sold here some time ago, and the only items clearly for sale were finger puppets and a few books.  When I tried to make a purchase, it took the clerk some time to find out where the register was, and how to accept cash or a check, since they mostly deal with purchase orders from companies.  The green awnings on  the left cover functioning retail stores (today, anyway)

Midtown Office Conversion Example #3

 University Investment Real Estate

2799 Middlefield Rd

(Caddy corner from old Harmony site, across Middlefield and Colorado)

This used to be a video store with lots of foot traffic.  It now houses a real estate investment business, with an interest in maximizing its shareholders returns for the use of land, which I imagine includes converting retail businesses into office space. I would prefer that this and the other non-retail businesses be located in other areas appropriate for non-retail uses, and not in the core Midtown Shopping District.

Midtown Office Conversion Example #4

 Coldwell Banker Expansion / Edward Jones Securities

2778 and 2754 Middlefield Rd

(Across from old Harmony site, on the other side of Colorado)

This location has housed a series of Midtown real estate firms, and Coldwell recently expanded its offices in this building.  In the past year,  Edward Jones Securities moved into the location that used to be a shoe store. Now, while you wait to pick up your dry cleaning, or get your shoes repaired next door, you can peer in the windows and see that over half of this building is now occupied by  workers toiling before glowing computer screens.  Great if you buy houses in Palo Alto frequently, or if you like to personally supervise your broker while he/she enters your securities trades...

Midtown Office Conversion Example #5

 Was: Midtown Bike Shop.  Is: Medical Office

2635 Middlefield Rd

(Across from Harmony, next to Coop)

This building appears to be the most recent office conversion.  A medical practice has moved into the former location of Midtown Bicycles.

Will this be #6?

 Was: Harmony Bakery.

2750 Middlefield Rd

I've asked folks I found studying the site and holding building plans, but they won't say what next use is planned for Harmony's old building.

What needs to be done:

Land use zoning is an exchange between the public and landowners.  The public participates in deciding appropriate use, and receives the efficiency of businesses located together, while the landlord receives the benefit of collecting rents from these tenants.  The "Midtown Shopping Center" was intended to be a place to shop.  In the past, Midtown businesses were typically retail (with a few banks and real estate offices here and there), and office space was located in less visible locations.  At the time, the higher rents made ordinances specifying what type of businesses were permitted in high traffic areas unnecessary.  Economics of land use have changed, and it is now necessary to restrict the types of businesses which may locate in retail shopping districts, and impose future use restrictions on offices that have already moved in.  The creation of a "retail shopping" district would ensure that retail businesses are competing against other retail businesses for space, and not well-capitalized businesses needing space for office workers.  If we fail to act, we will lose our local businesses, and the "Midtown Shopping District" will simply become office space with a major thoroughfare running through it.  Here is what seems sensible from a retail user's perspective:

1) Define retail uses within a commercial district (there is no such use defined today, except on University Ave in Downtown).  

2) Define the retail district to apply this use. 

More retail stores will be replaced by offices if we don't speak up!

Note:  These restrictions have been implemented in the current ordinances.

I will collect and forward all midtown-related correspondence received.  E-mail midtown comments to me here, or to save-midtown@chesavage.com  

            -Jay Chesavage, midtown shopper