GILROY
– Bucking the trend of downsizing during the current economic
slumber, southeast Gilroy’s South Valley Plaza is doing just the
opposite.
GILROY – Bucking the trend of downsizing during the current economic slumber, southeast Gilroy’s South Valley Plaza is doing just the opposite.
The 180,000-square-foot shopping center on the southeast corner of 10th and Chestnut streets recognizable for many years by its abandoned parking lot and empty store fronts will soon be at 90 percent renter capacity – a figure it has not reached in more than a decade, said Dan Gray, co-owner of the center.
“In February 2002 we had a 90 percent vacancy rate (at South Valley Plaza),” said Gray, co-owner of Gray & Reynolds Properties, Inc. in San Leandro which bought its first building in the center in 1999. “By the end of March 2003 we’ll have more than 90 percent of our space occupied. This speaks to Gilroy’s market for growth.”
Fourteen new businesses have opened shop in the 22-unit South Valley Plaza in the past 10 months, including The Department of Motor Vehicles, Community Solutions, Fashion Venus clothing store and the Sweet Retreat ice cream shop. Along with a new hair salon, stores selling pottery, sewing supplies and car insurance have also began to fill the center, and Gray said all but three of the center’s units – or 8,000 square feet – will be occupied by March.
In February 2002 only McDonald’s, Arteaga’s Supermarket, Dutchman’s Pizza and Western Appliance called South Valley Plaza home.
“It’s really encouraging to see that center filling up even with the economy how it is,” said Bill Lindsteadt, Gilroy economic development corporation director. “That part of town needs some more services, and the great thing about having a high-occupancy center is that it brings in foot traffic to all of the stores. This is really a reward for the stores that were able to hold on there when the center was empty.”
The rejuvenation of the center comes after 19 months of failed negotiations between Gray and Costco Wholesale to bring the mega discounter to the center’s 72,000-square-foot building west of Arteaga’s that use to be Kmart. Costco eventually chose to build its own building in Gilroy on the other side of the freeway, leaving Gray and his company with plenty of open space.
Instead of Costco, D Fashion Mart – a mercado-type clothing store – and 99 Cents City will share the old Kmart space that came to Gilroy shortly after the opening of U.S. 101 in the 1970s. Tentative plans for a car dealership to take over the old movie theater in the southeast corner of the plaza and a laundry mat east of Arteaga’s are also in place, Gray said.
“There will be a substantial cosmetic renovation to the center,” he said. “We will repaint the buildings, build new roofs, fix the parking lot and put an emphasis on landscaping. This will become a pleasant place to shop.”
The cosmetic improvements to the center will begin early in 2003 and cost approximately $2 million, Gray said.
“What excites me most about this rejuvenation is that it will bring the center back up to date cosmetic wise,” said Lindsteadt, who estimates that South Valley Plaza will generate $150,000 in sales tax revue for the city next year. “The appearance of a center like this plays a large role in attracting customers.”
Aside from the cosmetic upgrades, the center’s location adjacent to a major freeway and easy accessibility to residents on the east side of Gilroy makes the center a prime location for many businesses, Gray said.
“Gilroy is in a significant path of growth regardless of the economy,” he said. “Right now the community is under-served by retail and that is being recognized.”
