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October 27, 2004

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Publication Date: Wednesday, October 27, 2004

Change comes to Ladera Country Shopper Change comes to Ladera Country Shopper (October 27, 2004)

New owner, higher rents, improvements in works; John's Liquors departs

By Andrea Gemmet
Almanac Staff Writer

Longtime patrons of John's Liquors at the Ladera Country Shopper can look forward to a big sale before the end of year, but they won't be able to patronize the small shopping center's oldest business after New Year's Day.

"We're out of here January 1 for sure," says Matt Ragno, who owns and operates the store with his brother, Brock.

Founded by Matt's uncle, Don, the store was named for his grandfather, who had operated a liquor store in East Palo Alto since the 1930s. It was one of two stores operating when the Country Shopper first opened in 1957.

The liquor store's departure is one of several changes in the works since the shopping center changed hands at the end of August.

"I've enjoyed it, and I don't particularly want to leave," Mr. Ragno says. But, he adds, "It's tough to have a little liquor store."

Besides competition from big chain stores like Costco and Trader Joe's, the demise of the booming dot-com economy meant the end of customers who'd breeze in and buy $100-plus bottles of wine as if they were two-buck Chucks.

Rent for the store was well below market rate, and now that it will more than double, "the numbers don't work," says Mr. Ragno.

However, he says he doesn't blame the new owners, Palo Alto-based developer WSJ Properties and Santa Clara-based commercial property managers Willis & Company.

"The people who bought it have to do what they have to do, and they raised the rent to market value," Mr. Ragno says. "It's not their fault."

Other changes

While John's Liquors is the only business that has announced plans to leave, there are other changes afoot at some of the Country Shopper's oldest businesses.

The Razor's Edge barbershop is merging with Diane's Beauty next door, and both spaces will be remodeled, says Steve Cervelli. With rent on his shop going up by about 50 percent, Mr. Cervelli says he and fellow barbers Aram Chirkanian and Olga Barton will cut hair at Diane's and give over the Razor's Edge space to manicurists.

"Instead of having an actual business, I'll be renting my little chair," says Mr. Cervelli, who has been at the Razor's Edge for 28 years.

He says he didn't really realize that rent on the shop had been relatively low.

"We don't generate much income," he says. "It's hard for barbershops to survive in high rents, that's why most of them have consolidated over time."

Mr. Cervelli says he's optimistic that things will work out for the Razor's Edge barbers, and the remodeled, expanded shop will be a nice addition to the shopping center.

"It will definitely be a different atmosphere around here. It should be interesting for me," he says.

Improvements

The salon remodeling project isn't the only one in the works. Eric Willis of Willis & Co. says several improvements are on the way for the Country Shopper. Built in 1956, the buildings need some work, particularly infrastructure projects to take care of termites and dry rot, and heating and air conditioning upgrades, all things that won't be readily apparent to customers.

They'd like to improve the design of the parking lot to make it safer, and make the center more attractive with additional landscaping, Mr. Willis says.

"We hope to pick up more seating areas in front of businesses by having a better plan, but these are all preliminary ideas," he says. "We're going slowly rather than thinking we can go in and know what should be done from day one."

While he's sorry to see John's Liquors leaving, Mr. Willis points out that for one of the Country Shopper's stores, a new lease negotiated with the prior owners just before the center was sold has a rent that's slightly higher than what it would have been if the tenant had waited to make a deal with his group.

"We think the tenants there have not said it's onerous," he says. "It's just that Matt's rent was way under market rate."

There's been a lot of interest in the liquor store space, but nothing that he can comment on yet, Mr. Willis says. The new Curves gym is being well-received, and they are looking into ways to fill a community wish for a family-friendly restaurant, he says.

"At the old Iberia restaurant site, it would be nice to bring a nice restaurant in there, but so far, we haven't been able to attract one," he says.

Bianchini's

The new owners are enthusiastic about Kevin Bianchini's plans to expand Bianchini's Market, says Mr. Willis. "We think he's doing a marvelous job there, and we can help him be more competitive by having more space."

Mr. Bianchini says he'd like to expand the deli department and add a salad bar, soup bar and sushi kitchen, as well as add another aisle of groceries, but he's not sure how much square footage the county will allow him to add to the building.

Bianchini's has a long-term lease in place, and isn't affected by any rent increases, he says.

"We're very excited about the new ownership," Mr. Bianchini says. "We're really pleased with the way things are going."

Garden Center

For Juan and Mercedes Navarro, who own the Ladera Garden Center, the changes are both good and bad. Plans to improve their building and the fence that surrounds their outdoor nursery space will benefit the business in the long run, says Mr. Navarro.

"It may bring more customers in, the store will look nicer, a little more upscale," he says.

A new roof will solve problems with leaks, and, it's hoped, get rid of the termites, he says.

"The owners seem to be nice people, you could work with them a little bit, and in the long run they want to fix up the whole shop," Mr. Navarro says.

In the meantime, the Garden Center is losing some of its space -- the little greenhouse wing that juts out from the front of the store -- because they can't afford it, he says.

"It's a shame, but I understand they've got to make some money," he says.

Like many small businesses, the Ladera Garden Center has been suffering from competition from big-box chain stores such as Home Depot, Mr. Navarro says.

"We try to find a little niche that Home Depot won't have, and get people interested in coming back, but you've got to keep after it," he says.


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