Smart & Final has made a pending and not-final offer to move into the vacated Fillmore Safeway grocery store, but Safeway’s not talking about whether they’ll take the deal, and there are whispers that other grocers may make their own bids too.
The February closure of the Fillmore Safeway was at least delayed for a year, but still happened anyway, leaving the 40,000-square-foot grocery store at 1335 Webster Street in the state of being a vacant, hulking eyesore for god-knows-how-many years to come. Or maybe not that long at all?
The Chronicle reports that the warehouse-style grocery chain Smart & Final has made a bid on the Fillmore Safeway space. Smart & Final currently has only one San Francisco location at Seventh Avenue and Clement Street, but otherwise has more than 200 stores across California, Arizona, and Nevada, plus a few in Mexico.
That’s no guarantee the bid will be accepted. Safeway (which owns the land) is working with a developer called Align Real Estate to build a large housing complex there, though that proposal has no approvals, nor even a formal submission of a plan. But it is believed they would be open to a grocer or some sort of other ground-floor retail tenant, so Smart & Final would certainly fit that bill.
Though it seems Smart & Final might not really be the white-knight savior here, and is asking for some pretty serious concessions. Then again, this may be just an opening bid in negotiations.
Per the Chronicle’s reporting, Smart & Final is asking for a five-year lease but also offering (in the Chronicle's words) “an investment by the company of at least $5.5 million.” Though in return, they’re asking to pay (in Smart & Final’s words) “no base rent, property taxes, or fire/casualty insurance during the term of the lease.”
And in a sign they may have leverage with a city desperate to fill the space, Smart & Final is asking that the city provide at least one on-duty police officer, and a marked car, on the premises during all business hours that the store is open.
The Chronicle obtained a letter from Smart & Final vice president of real estate Casey Lynch to Align Real Estate from last week, which said, “We see this store as a first step toward establishing a durable presence within a larger redevelopment, and we’re approaching this as a meaningful opportunity to demonstrate our value as a future anchor and ongoing contributor to the success of the site and the neighborhood it serves.”
Align did not comment on the letter. Safeway gave the Chronicle a statement simply saying, “The property remains under contract with Align and lease terms are up to them.”
The Chronicle’s sourcing adds that Mayor Daniel Lurie’s office has reportedly been involved in negotiations, and that “other grocery store operators” have also been in talks.
It also sounds like last month’s lifting of the formula retail ban on Van Ness Avenue, which added a last-minute exemption to include the Fillmore Safeway, may have sweetened the pot for Smart & Final and other suitors.
“It’s not a coincidence that we are getting a bid now that looks, from our perspective, quite financially reasonable and is implementable to hopefully get a grocery store back into the Fillmore by next year,” Supervisor Bilal Mahmood told the Chronicle.
Though none of this guarantees there will be a Smart & Final, or any other grocer, in that giant vacant space anytime soon. As Mission Local pointed out in February, City Hall approval for any new tenant could take as long as 18 months.
Image: Ali H via Yelp
