The 50,000 or so drivers that pass through Gilroy’s eastern
corridor each day will soon see more retail, but the developers
behind the newest Pacheco Pass project reserved much more land for
industry and office space, which they say will bring high-paying
jobs to Gilroy.
The 50,000 or so drivers that pass through Gilroy’s eastern corridor each day will soon see more retail, but the developers behind the newest Pacheco Pass project reserved much more land for industry and office space, which they say will bring high-paying jobs to Gilroy.
The McCarthy family is filling 16 acres with retail stores and parking spaces and another 90 acres with office and industrial space off Pacheco Pass Highway. The 10-acre Gilroy Crossing Shopping Center and Gilroy Foods sandwich the new retail/office center.
For years city officials have tried to complement Gilroy’s retail tax base with more lucrative, high-tech jobs that could create a textured, self-sustaining economy for the city. Rock-bottom office prices and high inventories in Silicon Valley have slowed this vision in the past, but the McCarthy family believes that will change with the help of retail.
So far the niche-market Tractor Supply Co. is the only open business in the McCarthy Business Park & Retail Center. But a Sonic, Starbucks and Del Taco are likely to join soon after Hooters decided not to open a restaurant, according to Tom Nelson, a retail specialist with Colliers International, the commercial real estate brokerage the McCarthy family hired to find tenants.
“Gilroy is a regional retail destination,” Nelson said, referring to the nearby Target and Kohl’s, the Gilroy Premium Outlets farther north and the Super Wal-Mart and Pacheco Pass Shopping Center with its Lowe’s and Costco across the street.
Colliers’ director for retail, Jim McMasters, said he thought the retail market had cooled off in Gilroy, but Tractor Supply store’s successful debut earlier this month indicated otherwise, he said, and the other stores and restaurants still under negotiation are all set to open by spring or summer of next year.
“This is the next major junction for job creation in the Gilroy area,” McMasters said. “We thought maybe the area would be over retail, but it isn’t.”
But the McCarthy family’s newest development is not just about retail-based jobs. It will compete with the Obata Business Park to the southwest and the SouthPoint Business Park to the north, according to several Colliers consultants and Joey McCarthy, the partner and son of Joe McCarthy, who oversees the entire development as owner of McCarthy Gilroy, LLC.
The prospect of luring those companies remains promising, Joey McCarthy and Colliers consultants said. Why else, they asked, would the family set aside 90 out of 106 acres for enormous warehouse space, industrial condominiums, custom-designed research-and-development buildings and three adjustable-size industrial lots.
“The whole project (both retail and industrial) is long-term. To fill up 100 acres is not going to happen overnight,” Joey McCarthy said Tuesday. “We want high-tech companies to move from Silicon Valley down to South County,” he added before mentioning Gilroy’s recent growth and strong employee base, both of which made the city an attractive spot to build. That and the proximity to U.S. 101 and Highway 152, plus the new traffic light at the intersection of Pacheco Pass Highway and Cameron Boulevard. It makes checking in on construction from Los Banos three or four times a week easier for Joey McCarthy.
“We can offer to potential companies what other cities and properties can’t. We think it’s just a matter of time,” said Joey McCarthy, adding that he hopes to sit down with city officials in the near future to create financial incentives for companies to move into his family’s business park, similar to the cheaper fees developers pay to build downtown compared to outside areas.
Mayor Al Pinheiro, who is known for championing downtown revitalization, said he was open to discussing incentives for the McCarthy property. He added that he had confidence in Colliers’ and the McCarthy family’s joint ability to bring higher-paying jobs to Gilroy.
“They have the capability and expertise to draw these jobs. They own the property, so it’s incumbent upon them to fill it,” Pinheiro said. “(Colliers) has got a hard job because every city is after the same thing (higher-paying jobs) … but we have a location that is absolutely fantastic, and the McCarthys have a long track record of good business.”
The mostly retail McCarthy Ranch in Milpitas is popular, but it lacks a huge industrial section. Larry Cope, president of Gilroy’s nonprofit Economic Development Corporation, said the contiguous swath of industrial land here gives businesses more options compared to the smaller industrial parcels elsewhere around town that are already set apart.
Cope has been working with Mark Sanchez and Jeff Barnes, both vice presidents with Colliers in Gilroy who are heading the McCarthy park’s industrial recruitment. The three men continually correspond with potential companies and city officials, but Sanchez said nothing has been confirmed for the industrial park as of Wednesday.
It is a tough market, and construction costs are up, Sanchez said, but Gilroy offers a strong labor pool, and he and Barnes have plenty of leads. They are negotiating with large users and fielding numerous brokers inquiries about potential sites for manufacturing, research-and-development and distribution companies, he said.
The McCarthys already sold a rectangular sliver of the business park to Venture Corporation, which is looking for companies to move into the 47 industrial condominiums that range in size from 1,219 to 2,838 square feet and cost anywhere from about $365,000 to more than $700,000. Sanchez said small manufacturing shops, architectural firms and engineering and research-and-development companies could all find adequate space in one of Venture’s five buildings.
Now it is just a matter of time.
