Movie theater, furniture chain show interest in Wal-Mart
building, but no takers so far
Gilroy  – A movie theater and national furniture chain have inquired about moving into the Wal-Mart building after the retail giant relocates next month to bigger digs, but so far no businesses have committed, according to a property representative.
“We have interest from a number of national tenants,” said Bill Cann, a broker with Hudson Jones Commercial Brokerage in San Jose. “It’s probably assured that it will end up a multi-tenant building. Wal-Mart left certain criteria of people we can’t lease to – Costco, Target. They don’t want their competitors to take over the building.”
He said initial interest has cooled off due to market conditions and the physical challenges of the site, a 125,000 square foot building at 7900 Arroyo Circle.
Cann said that Lane and Broyhill, national furniture stores owned by the same company, expressed interest in the site but “stopped in their tracks because the furniture industry is being affected by foreign imports.”
He said representatives of a movie theater balked at the cost of adapting the building while competing against Platinum Theaters, off Monterey Road. But he did not rule out the possibility of a movie theater.
In the meantime, Cann has sent letters of intent to three national “soft goods businesses” – stores that sell clothing and similar products as opposed to auto dealers and other sellers of large-scale products – but all have expressed a common concern.
“No matter who we put in there,” Cann said, “the first thing they want to know is ‘Can we be seen from the highway?'”
“One of the things we have to be concerned about is that the building has a street in front of it and that street has trees,” Cann explained. “If you drive down the freeway, you can’t the see the building.”
Cann said he is working on the tree issue with city planners and Craig Filice, whose family’s development company owns Southpoint Business Park where Wal-Mart is now located.
The business park includes the area east of the highway, from Gilman Road north to Leavesley Road. In addition to Wal-Mart, it houses the offices of Gilroy Unified School District, Kaiser Medical Clinic, the outlet centers and a commercial condominium project now under construction.
Filice explained that his company pruned the trees, but would like to avoid cutting them down entirely.
He added that the commercial site faces bigger challenges than tree cover, including competition from the shopping centers off 10th Street and Highway 152. With the help of a Wal-Mart Supercenter as an “anchor” store, the Pacheco Pass Shopping Center has attracted a number of smaller “secondary” merchants.
“If you’re looking over the long haul, with the retail that already exists, Gilroy has established itself as a viable market place,” Filice said. “Over the long haul, I think it will continue to grow. As to the (Hudson group’s) immediate needs, they’ll be competing with 10th Street, and the focus right now is on 10th street.”
Local Wal-Mart employees will start organizing and packing inventory this weekend as the retail giant prepares to move into its new store at Pacheco Pass – a 220,000 square foot Supercenter that adds groceries to its normal list of discount offerings.
The store is scheduled to open in mid-September, but Wal-Mart has three months to vacate their current site under the terms of a lease with the Hudson group.
Mark Sanchez, a commercial real estate broker with Colliers International, was optimistic about re-use of the current site.
“I think it will easily be refilled,” he predicted. “The only thing is I don’t think you’re going to get a single large user like that. Probably a series of 20,000 to 40,000 square-foot tenants.
“There remains a large demand for retail in this town,” he added.
Cann said businesses interested in the property should contact him at 869-3606.
