BY ALLISON LEVITSKY
Daily Post Staff Writer
A trial is scheduled for Tuesday to decide if the owner of the Edgewood Shopping Center in Palo Alto should pay the city an estimated $1.3 million in fines because the center lacks a grocery store.
Coincidentally, a new grocery store is planning to open in the vacant supermarket space in the first half of November.
Owners Aydin Kyazim and Mustafa Mutlu plan to begin stocking what will be known as the Market at Edgewood next week. Hirings are “on the way,” Kyazim said.
The city fined their landlord, Sand Hill Property Co., $5,000-a-day for violating a development agreement for the shopping center that required an operating grocery store. Sand Hill, headed by developer Peter Pau, signed the development agreement in order to get city permission to build houses on the property located near the Highway 101-Embarcadero Road interchange.
After the property was redeveloped, the Fresh Market chain opened a store there. But it closed on March 31, 2015, as part of a company re-structuring that resulted in Fresh Market closing its California stores.
Sand Hill stopped paying the fines on Jan. 22 of this year. At that point, the city had collected $700,500. Between Jan. 22 and today, 265 days have elapsed. At $5,000 a day, the amount owed is $1.325 million.
Earlier this year, Sand Hill sued over the fines.
On June 27, Santa Clara County Superior Court Judge James Stoelker granted a request by Sand Hill for a preliminary injunction to temporarily stop the fines. The judge’s order said the fines would remain on hold until the case goes to trial.
Sand Hill contends the fines are illegal.
“There is no basis for the assessment of any fines or penalties, much less such grossly excessive and unconstitutional amounts,” the company said in court papers.
Attorneys showed up to Santa Clara County Superior Court to argue the case on Thursday, but found that the hearing had been set in error. The trial is now set for Tuesday.
Judge Carrie Zepeda was supposed to hear the trial, but Sand Hill asked for a new judge. Each side is allowed to object to a judge without needing to give a reason.
Santa Clara County Superior Court Judge Peter Kirwan will now preside over the case.
Did the fines motivate Sand Hill to find a new grocery-store tenant?
“From some people’s perspective, the city’s increasing the penalties may well have motivated the Sand Hill Property Co. to finally comply,” said Rick Jarvis, the attorney representing the city in the fine dispute. “Other people’s perspective is Sand Hill has been working on it all along,” Jarvis said. “In the city’s view, they have an obligation in the ordinance to keep a store in operation there and they haven’t complied with that. Whether they sign a lease agreement that ties their hands, that’s their problem, not the city’s problem.”
Meanwhile, the new grocery store is preparing to open its doors in the first two weeks of November.
The owners have also set up a site at goo.gl/M87iLG, where residents can post questions and comments about the forthcoming store.
Most of the questions have focused on product selection: “What other products, aside from produce, will be sold at this location?” “Will you have a good selection of organic produce?” “Do you serve cooked food like deli, soup or sushi?”
Kyazim and Mutlu, who also own Crystal Springs Produce at 770 Polhemus Road in San Mateo, have been meeting with the Sand Hill Property Co. on a weekly basis as they prepare to open the store.
