News - Local

Thursday, Aug. 07, 2008

Target store may land on Los Osos Valley Road site instead of Dalidio Ranch

Madonna company official says the popular retailer, long considered for the Dalidio property, may go to nearby Prefumo Creek Commons

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The promise of a Target store coming to San Luis Obispo was dangled before county voters during the 2006 campaign to develop Dalidio Ranch, but the retail giant is now considering settling in a different shopping center proposed nearby.

Madonna Enterprises real estate manager Clint Pearce acknowledged Wednesday that his company is in negotiations with the retailer for a Target store to be the 140,000-squarefoot anchor of Prefumo Creek Commons.

Prefumo Creek has been proposed as a 190,000-squarefoot shopping center across Los Osos Valley Road from the entrance to Costco. Long called the “gap property,” the land sits between car dealerships and Pacific Beach Continuation High School.

The Prefumo Creek property also backs up to the Dalidio Ranch—131 acres that rancher Ernie Dalidio has long hoped to see developed west of Highway 101.

“We are in negotiations with Target for the anchor position in our shopping center,” Pearce said. “We feel they are going to add great value to our city.”

The Madonna family is one of the largest landowners in the south part of the city. It sold the land to Costco and Home Depot for those stores, and it owns Irish Hills Plaza, which features tenants such as Old Navy, Circuit City, Panda Express and Office Max.

At one point, Old Navy was also expected to be a Dalidio tenant, but Irish Hills Plaza finished while Dalidio’s development remained on the drawing board.

Claire Clark, the city’s economic development director, said Target would be a good addition to the city, while not duplicating other retailers.

“It certainly is the most requested retailer that we get,” Clark said.

A Target spokeswoman reached in the company’s Minnesota headquarters had no information on the status of a possible San Luis Obispo store.

The Dalidio Ranch has been the subject of a multi-year effort by Dalidio and real estate developers from the Los Angeles area and Texas to build a shopping center.

A retail center on the Dalidio property was approved for annexation and development by the San Luis Obispo City Council, but overturned narrowly by city voters in 2005.

Then, a larger project on the same site that would have included stores, a hotel, residences and more was approved by two-thirds of countywide voters in the form of Measure J in 2006.

Early this year, San Luis Obispo Superior Court Judge Roger Picquet threw out Measure J, saying that because it included residences it had not complied with state regulations involving airfields. That ruling is being appealed.

Target and Lowe’s Home Improvement were frequently suggested as anchors for the Dalidio project during the Measure J campaign.

Bill Bird from the Los Angeles area and Scott Dabney of Texas, who are believed to have the option to develop the Dalidio land, could not be reached Wednesday on the news about Target possibly becoming a tenant for a different project.

Dalidio also could not be reached for comment.

It became public this week that Dalidio, and possibly Bird and Dabney, are negotiating with local investors on an option agreement to sell the Dalidio Ranch for development as a retail-only center.

SLO Promenade II LLC is the investors group pursuing the option agreement. Principals include John M. Wilson, Thomas Murrell and Rudy Bachmann.

Wilson and Murrell are investors in the company that owns the SLO Promenade off Madonna Road and adjacent to the Dalidio property.

Phil Dunsmore, a city planner shepherding the Prefumo Creek project through the city, said the Madonnas’ land has yet to be annexed to the city.

There had been an earlier project that featured an anchor store topping out at 60,000 square feet, surrounded by smaller stores.

Under the city’s general plan, the proposed 140,000- square-foot store would be the largest the city allows. That is the size of Costco, and slightly larger than Home Depot.

Dunsmore said the city had just hired an environmental consultant for Prefumo Creek, but that it is awaiting a new project description because it has changed dramatically.

The environmental review process — which includes drafts, a public comment period, a final draft and review and possibly approval by the city — could take months.

The reasons that the city required a full environmental report on Prefumo Commons are because it is a large project, it abuts Prefumo Creek, it would affect area auto traffic and because half of the site is in a 100- year flood plain, Dunsmore said.

Pearce said the land is about 32 to 33 acres, and the stores and parking would be on approximately half of that, between the creek and Los Osos Valley Road. The rest of the property would become open space, he said.

Pearce said that New Frontiers, which has a store on Foothill Boulevard, is expected to be another tenant of Prefumo Creek. And he said he is working on getting a well-known national restaurant into the site —“not fast food. A nice sit-down restaurant.”

But Target has been something he has pursued for more than three years, originally proposing it as a tenant for Irish Hills Plaza, according to past interviews with The Tribune.

“We really want Target there,” Pearce said. “And I think they want to be there.”