News


Yellow Wood Coffee and Tea to go

Owners blame loss of foot traffic, high rent in Alamo Plaza

The economic downturn has claimed two more victims, this time a much-loved coffee shop and its companion store in Alamo Plaza.

In a recent letter, Mike and Lauren Duensing, owners of Yellow Wood Coffee and Tea and its sister store, Sage, announced they will be closing Sept. 23. With the closing, there will be 14 vacant stores in the plaza.

The coffee shop, which has been dubbed the town hall of Alamo, opened in 2005 and was doing well until 2008, when the recession hit, according to Lauren Duensing, who said it struggled and yet was once again on the brink of success when Wells Fargo bank moved from next door to across the parking lot.

That, she said, was the straw the broke the camel's back. Duensing said people would often stop at the bank, get cash and walk the block.

"Retail is all about foot traffic and a tenant mix. We had a bank and Katrina Rozelle, an award-winning cake maker, we had a boutique by the name of Sage which we also own, next is Yellow Wood, next, Lawrence Meat Market, and then last, Richards Crafts," she said. "That's a beautiful tenant mix, with the bank."

Although the bank is just across the parking lot, about a football field away, Duensing said that was all it took to divert traffic away from the block and away from her stores.

Now, Yellow Wood and Sage are behind in rent and Duensing said the only thing that could keep the two stores open is a concession from the landlord. That's something she's been lobbying for, without success.

Duensing said she'd even made a trip to San Francisco to meet with Art Fong, the manager of Invesco, the company that owns the land.

"He was a nice person," she said. "It's important -- people want to point the finger at somebody, but the truth of the matter is it's a huge corporate system that doesn't allow (for) individual circumstances or small business circumstance. Our business cannot pay the same rent as Wells Fargo or Starbucks or Peet's. Our margins aren't as high."

Duensing is hoping to have the rent cut in half, and to get reimbursed for investments made to the shop, like the $50,000 she said was spent for the patio and the $15,000 air conditioning system.

While Yellow Wood is not the only store going under -- a 30-year tenant, Furbelos Fabrics, recently closed -- Ken Pearce, who co-owns Katrina Rozelle next door with his wife, said the management company had to make some tough decisions.

Pearce said the property managers have to decide which stores will survive the downturn.

"They're not going to give back huge amounts to the non-survivors," he said. "Overall, I see them trying to run to the larger corporations if they can."

Those companies, he said, are better able to carry the load for a store that doesn't do well to start.

Pearce said that doesn't mean the property managers haven't worked with business owners.

"Five years ago, they'd just dictate what they thought would happen," Pearce said, adding that included automatic rent increases. "Nowadays, it's 'tell us what you need and we'll see if we can help.'"

And while Pearce said property managers "totally understand what the situation is," some stores aren't going to make the cut.

Even though Katrina Rozelle is in a unique position, with the bulk of its income from high-end wedding cakes, the store has seen a 6 to 8 percent drop in business, people walking from the bank who stopped in for a cookie or cake.

Duensing admits her stores are probably on the list of those that won't survive.

"What they would say is we're a business that's in the death flight. We're behind on our rent, we're not catching up -- we look like a bad tenant. We show up on the delinquency reports," she said.

Meanwhile, Duensing is doing all she can to influence Invesco, including proposing an "edgy" marketing plan, like the one that kept her stores open for the past few years.

"One thought was hire me, hire Lauren, to bring to this plaza what I brought to Yellow Wood. Use the marketing fund locally," she said. "Yellow Wood has won awards, Yellow Wood is a noted spot in this community. Let's do the same thing with Alamo Plaza."

There's also been a letter-writing campaign, with what Duensing described as hundreds of letters, including one sent on behalf of the CEO of Safeway, which has a store in the same plaza.

Customers are already mourning the loss.

"It's a good place to sit down and have a conversation," said Karen Lanfranki. "I enjoy the patio."

Her husband, Tom, said Yellow Wood, which has water dishes outside, was a frequent destination when he walked his dogs.

Outside, two young men immersed in a conversation weren't aware of the imminent closing.

"The only reason I come to this plaza is for this place," said John Martin, who said he'd been coming to Yellow Wood for about a year.

While they could open a store in a different location, Duensing said, "Our heart is in Alamo."

She's still hoping for a compromise.

"We're open to something that the landlord and property manager might suggest that we haven't thought of," Duensing said, adding that she wants Invesco to "come to the table."

"There's room for compromise but I would say they're firm," she said. "You can't suck water out of a rock, but compromise needs to reflect the real economic condition, which is reflected in real estate values and rent rates."

Comments

Posted by Hal, a resident of Alamo
on Sep 17, 2010 at 7:14 pm

Dear Emily, Glenn and Dolores,

Thank you for celebrating this exceptional loss to Alamo's potential as a community. Yellow Wood needs to be considered a VERB for the rational centering of Alamo as a diverse and fractured community. It was where neighborhoods came together in strength in 2006 and beyond. It is the place with individuals from diverse perspectives met to form community bonds.

VERBS seldom are a function of real estate. Let all of Alamo continue to seek Yellow Wood among themselves and define a place for Yellow Wood to continue. Clearly, community engagement programs from Safeway, Chevron and other corporations can make this a function of the Alamo business district and it only takes the wealth and interests of our community of neighborhoods to make it happen.

Anyone, will you please step forward?

Hal


Posted by Brad, a resident of San Ramon
on Sep 20, 2010 at 6:31 am

I'm going to miss Yellow Wood. Yellow Wood was one of those places that I liked the very first time I walked in the door. I will miss the atmosphere more than anything else. I really hate to see a local establishment like Yellow Wood go under. RIP Yellow Wood, I truly enjoyed the experience.


Posted by B. Lynn Goodwin, a resident of Danville
on Sep 20, 2010 at 10:16 am

I will miss Yellow Wood and so will my shih tzu, Mikko McPuppers. We loved hanging out on the patio.

Lynn
www.writeradvice.com
Author of You Want Me to Do WHAT? Journaling for Caregivers


Posted by NF Mocha n/w, a resident of Alamo
on Sep 20, 2010 at 10:37 am

How are we to "shop local" if all the local shops are closing? Small businesses fuel our ecomony. Alamo Plaza's landlord needs to look at the bigger picture.


Posted by Dawn, a resident of Alamo
on Sep 20, 2010 at 10:44 am


Yellow Wood will be missed. Beautifully decorated, friendly employees.

I would STRONGLY urge all displaced coffee lovers to consider taking their business to Cherubini, down the street and around the corner.


Posted by Oh!riley, a resident of Alamo
on Sep 20, 2010 at 1:00 pm

I like Cherubini's a lot but parking there is a problem. I hope the landlord at Alamo Plaza has considered what to do when YW closes. For some reason the preference seems to be for empty store fronts vs. charging rents that reflect the economy/marketplace. I enjoy Yellow Wood and applaud the owners for supporting the community in so many ways.


Posted by Hal, a resident of Alamo
on Sep 20, 2010 at 1:34 pm

Dear Dolores,

Please allow me to provide information on investment trust strategies for buying various shopping centers and suggest that Joe Combs might be an adviser for any planned story by EMCEB on Danville/Alamo business districts. Joe as a former Alamo Today Editor/Publisher, a real estate broker and business strategist.

First, commercial property is not judged on land value and facilities. The investment value is cash flow and, more importantly, cash flow potential. Investors join an investment trust such as the one that owns Alamo Plaza because of a confidential plan to realign and rejuvenate facilities to maximize cash flow as return on investment plus certain tax implications.

Second, such investment trusts avoid costs related to moving or cessation of businesses caused by re-alignment by increasing rents to the expected cash flow rates promised to investors and patiently waiting for business to cease operations under the higher rents.

Finally, as major segments of a center are vacated there is no remaining hindrances to full rejuvenation and expansion of the segments. A good example would be the shopping center in Danville that shares a parking lot with Trader Joe's. Such a vacant facility achieves government approval for rejuvenation because of the absence of sales taxes from vacant stores. There could not be a better time to pursue such rejuvenation permits from governments struggling for revenue.

For over ten years, Alamo has been expecting rejuvenation of Alamo Plaza and much of the Alamo business district. Donna Gerber, as District III Supervisor, provided a preview of that development more than ten years ago and we can expect a version of that plan to become the future of Alamo Plaza.

halbailey@yahoo.com


Posted by Derek, a resident of Danville
on Sep 20, 2010 at 1:44 pm

The greed and unmitigated stupidity of commercial landlords will never, ever cease to amaze me. 13 empty spaces, and now 14? Lower the rent idiots. You cut off your nose to spite you face, and increase blight by letting retail space sit empty for months and years on end. Lower the damn rent by 50 cents/square foot and you might actually have cash flow, as Hal was talking about. He's wrong about property not being judged by land/location though, because that is inseparable from value.
This is exactly the same thing that will happen when the Danville Hotel project is complete. There is already massive vacancy from the Livery north past Diablo Avenue in downtown. And these fool developers and owners think they can hang another "upscale tenants wanted" sign and business owners will come running?


Posted by Georeg, a resident of Alamo
on Sep 20, 2010 at 2:15 pm

Invesco, the company that owns Alamo Plaza is bad corporate citizen. This greedy corporation is doing a major dis-service to the community and residence of Alamo. About 80%+ of the stores in plaza are vacant. Most prior store tenets were forced out by excessive rental rates. Thus Alamo residents are forced to drive to Danville or Walnut Creek for products and services that were once available locally. And Alamo/CCC are loosing sale tax revenue for community financing.


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