Demolition Sought to Replace Grocery Outlet Building with 5-Story Mixed Use Project

Aided by the economic recovery, the gentrification of the part of West Berkeley once devoted to light manufacturing and warehouse space continues apace. On June 16 architect David Trachtenberg filed an application for a use permit for a 5-story mixed use building on the site at 2001 Fourth Street now occupied by Grocery Outlet, a discount retail store which is part of a more-than-200-store chain.

Long-time Berkeleyans remember that the market used to be called Canned Foods. It has filled an important niche for the financially strapped West Berkeley shopper, specializing in packaged food items that had dings and dents, were close to their pull date, or were marked down for some other reason that didnt affect safety or nutritional value. It will be sorely missed if it closes, patrons say.

An obligatory large yellow sign has been hung on the back wall of the store facing University Avenue, but it lists only the architect, not the owner. Yesterday, the City of Berkeleys Planning Department posted the full application and accompanying plans on its current zoning list. A number of variances from height and density zoning regulations are requested.

The site owner is listed on the applications as RI Berkeley LLC. A Planning Department staff member told the Planet that the site is owned by Read Investments, the same owner as the adjacent Read Building. In a 2008 entry on Trachtenbergs web site, the Read Building was described as the first phase of a larger master plan for the entire block. The boundaries of the square block are Fourth, University, Addison and Fifth.

A second Read Investment building designed by Trachenberg is now under construction on the northeast corner of the block, the Aquatic Residences at 800 University Avenue. That one is advertised on the Read site as a 58-unit mixed-use apartment boasting two roof top sky lounges, an outdoor bocce ball court, a high end fitness center and lush gardens.

Also on June 16, Reuters reported according to un-named sources that the Grocery Outlet chain is being offered for sale at the price of one billion dollars. The story said that Grocery Outlet has about $100 million in earnings before interest, tax, depreciation and amortization and could sell for more than 10 times that figure.

A year ago the chain announced plans to move its headquarters from the Berkeley location to Emeryville. The San Francisco Business times reported that Grocery Outlet was started in San Francisco, but it moved to Berkeley in 1992 to a 20,000-square-foot space at 2001 4th St. that sits above a Grocery Outlet store. The Berkeley space is owned by Read Investments LLC, a real estate firm founded by the same Read family that founded Grocery Outlet and owns real estate that the retailer leases.

In 2009, family members sold an 80% stake in Grocery Outlet to Berkshire Partners to facilitate continued expansion of Read Investments, according to the corporations web site.

The current co-CEO of Grocery Outlet is MacGregor Read, grandson of the companys founder, and several Read relatives are Read Investments partners and executives.

Both employees and customers of the Berkeley Grocery Outlet have told the Planet that they are concerned about the stores closing just as new apartments are adding thousands of residents to the neighborhood. The closest large food vendor is the West Berkeley Bowl, outside walking distance for most of those who live in the University avenue area. A few blocks east, the building formerly operated as a supermarket by Andronicos, and before that by the Berkeley Co-Op, now houses a thrift store.

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Demolition Sought to Replace Grocery Outlet Building with 5-Story Mixed Use Project