BY ALLISON LEVITSKY
Daily Post Staff Writer
The owners of the shuttered College Terrace Market in Palo Alto have been sued by their building’s real estate developer for $460,000 of unpaid rent and liens placed against the property for improvements, according to court documents.
The grocery store’s closure was announced last month, just six months after it opened in an 8,000-square-foot space at 2100 El Camino Real. It was the third grocery store to abruptly close in town since 2013.
Store operators Chris Iversen and Addison Wright fell behind on their rent by more than $145,000 and didn’t reimburse the developer for two mechanic’s liens worth almost
$315,000, according to the suit filed Jan. 8 in Santa Clara County Superior Court.
The 20-year lease indicates that after opening last June, the market owed no rent for the first three months of operation and half their normal rate of $22,500 for the fourth through sixth months.
The store was required by City Council in 2010 as a “public benefit” when it approved the redevelopment of the lot that included the old JJ&F Market.
The developer was allowed to build 38,980 square feet of office space in exchange for renting space to a grocery store.
If the space sits empty for more than six months, the developers will face $2,000 daily penalties from the city.
The city placed a couple of obstacles in the way of the market’s success. First, it allowed the main tenant of the building, First Republic Bank, to open a cafeteria for employees, which presumably took away potential customers from the market.
Then, the city painted the curb red in front of the store, which might have discouraged El Camino motorists from stopping. The store offered parking underground, which isn’t as attractive to shoppers looking to make a quick stop.
A hearing in the suit is scheduled for March 6.