Business & Real Estate

Grocery Outlet chances fade at Sacramento’s Curtis Park Village

Developer Paul Petrovich waits to speak at the November City Council meeting where his proposal to build a Safeway and gas station at Curtis Park Village was rejected.
Developer Paul Petrovich waits to speak at the November City Council meeting where his proposal to build a Safeway and gas station at Curtis Park Village was rejected.

When the Sacramento City Council rejected his plans to build a Safeway supermarket at Curtis Park Village, developer Paul Petrovich unveiled his Plan B for the infill project: Emeryville discount chain Grocery Outlet.

But Grocery Outlet and Petrovich never signed a lease, and the supermarket chain said Friday the developer has “curtailed” negotiations as he engages in discussions with a different chain.

Melissa Porter, the Emeryville chain’s vice president of marketing, said she has been told Petrovich is talking to a grocer that would take up considerably more floor space than a Grocery Outlet.

Petrovich told the Sacramento Business Journal on Thursday that he is in discussions with a nonunion national discount company, which he wouldn’t identify.

The apparent exit of Grocery Outlet marks the latest twist in the increasingly contentious saga over the commercial portion of Curtis Park Village, the 72-acre parcel that represents the city’s second-largest infill development.

The City Council rejected Safeway in November because many residents of the existing Curtis Park neighborhood, which is adjacent to the new development, opposed Safeway’s proposed 16-nozzle gas station. Days later, Petrovich announced he instead would bring in Grocery Outlet, which has more of a downscale image than Safeway.

In the past few weeks, it became clear that Petrovich was looking for alternatives to Grocery Outlet. He sued the City Council, demanding that the decision over Safeway be reversed. That case is pending. He also entered into discussions with Raley’s, although those talks ended without a deal. Meanwhile, the sign advertising the future Grocery Outlet at Curtis Park Village has been taken down.

Grocery Outlet doesn’t seem upset that Petrovich has been courting other retailers. Porter said Grocery Outlet’s stores are generally smaller than what Petrovich might prefer, and the chain presses for lower rents than what the developer might like. “We’re a low-margin business,” she said.

The company continues to talk with Petrovich about building a store near the intersection of Del Paso Boulevard and El Camino Avenue in North Sacramento, she said.

“We have a good relationship with him; we’ve done other deals with him,” Porter said.

She said her company would have been a good fit for Curtis Park Village – better than area residents realize. While “we still are about great deals,” Porter said the chain is ramping up its offerings of organic produce and other high-quality food.

“I don’t understand personally why the neighborhood wouldn’t want us,” she said. “We do very well in all kinds of demographic neighborhoods.”

Petrovich, who has said he is renaming the development Crocker Village, declined comment for this story. Petrovich has declined to speak to The Sacramento Bee about the development because he says the newspaper is biased against him and the project.

Dale Kasler: 916-321-1066, @dakasler

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