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HomeMy WebLinkAbout1992/04/02 - Agenda PacketDATE: TO: March 18, 1992 CITY OF RANCHO CUCAMONGA MEMORANDUM FROM: Commercial/Imdustrial Design Review Committee Larry McNiel Suzanne Chitiea Otto Kroutil John Melcher (Alternate) Scott Murphy, Associate Planner SUBJECT: DESIGN REVIEW COMMITTEE MEETING OF APRIL 2, 1992 The following is a description of projects which require review and rating by the Design Review Committee- Please review the attached plans, visit the project sites, and write down your comments using the blank space provided under each project on the attached sheets. After the meeting, the consensus of the Committee's concerns will be typed up as the formal action/recommendation of the Committee and distributed to the Commission and Council. As always, feel free to contact the appropriate project manager (noted in parentheses along the left margin), prior to the meeting date, if you have specific questions related to the scheduled projects. The first design review item being heard at 5:00 p.m. Please notify our department if you will be unable to attend the meeting, or if you will be late, so that the dinner can be properly ordered and the necessary arrangements made. 5:00 - 6:00 (Bey) PL~_NNING COMMISSION WORKSHOP pRE-APPLICATION REVIEW 92-02 - SMITH'S SUPERSTORE - Review of conceptual plans for the development of a shopping center at the northwest corner of Foothill Boulevard and Vineyard Avenue. SM:mlg Attachments cc: Planning Commission/City Council PRESCOTT MUIR ARCHITECTS March 9, 1992 Ms. Beverly Nissen Associate Planner The City of Rancho Cucamonga 10500 Civic CenterDrive Rancho Cucamonga, California 91729 Re: Smith's Food and Drug Center #702 Foothill at Vineyard Letter of Justification for pre-Application Review E~vironmental SettinG: The site is located in the Thomas Winery activity center as defined by the Foothill Boulevard Specific-Plan. The site is the Northeast corner of the intersection of. Foothill Boulevard and Vineyard. The site is covered with existing structures that according to the City's General Design Guidelines are "incompatible architectural style". These existing structures are proposed to be demolished and replaced by a neighborhood supermarket and two pad buildings. The site is bounded by the Cucamonga drainage channel on the west and apartment type residential to the north on San Bernadino Road. To the east across Vineyard is the historic Thomas Brothers Winery and shopping center. The site drops in elevation from north to south approximately 25'. The Smith's store would be lowered so that it's northwall was approximately 18' of retaining wall. This would provide a minimal impact on the residential area. There is not Significant native vegetation that requires preserving on the site. Proposed Land Use: The project is located in a Community Commercial Zone which allows for supermarkets and restaurant out pads, 464 parking stalls are required by the use and 486 stalls are provided. The commercial use is compatible with the Foothill Specific Plan for activity centers sympathetic with the Thomas Winery corner which is set back from the corner with a water feature at the corner. The site design meets the required set backs and height restrictions- The proposed land use is compatible with the intended entry corridor and surroundihg. existing uses. Compatibility: The site has bee~ designed to respond to the existing traffic configurations and similar to Thomas Winery center~s juxtaposition to Foothill BoUlevard. The Smith's store is located at the far north end of the site to provide a buffer to the residential neighborhoods to the north. The main entry off of Vineyard aligns with the access atthe eastern side of Vineyard into the Thomas Winery site. A deceleration lane has been provided along the complete Vineyard frontage, The primary grocery dock is located to the west with just the non-foods dock area on the Vineyard side, Both docks will have screen walls and overhead entry doors, The pedestrian walkways and landscaping along Vineyard and Foothill respond to the General Design Guidelines for a picturesque treatment, The design includes a water feature and grape arbors at the corner to be a focal point for these pedestrian links. The building facade includes considerable depth for a trellis element set in front of the main facade, The use of river rock will be predominantly used in the trellis and arbor feature, The central entry tower for the store while being sympathetic to the Winery does not mimic the shape of that existing structure, A bus bay will be provided along Foothill Boulevard, The frontage will be heavily landscaped with berming to mitigate the impact of the parking lot. The center will be a significant compliment to the Winery site in a subordinate scale and with a sympathetic use ofbuilding materials. .: Ieating Up the Supermarket · Grocers: Smith's of Utah sold its Food King' outlets in the Southland. seven years ago, but it's returning with mega~tores.' By STUART SILVERSTEIN ' TIMES STAFF WRITES The last time it did business in Southern California, Smith's rood & Drug out of town· .Now- Salt Lake CitL Smith's is one of t market chains in the comin a score to settle. Wall Smith's be a winner its second time around with its new' king-size stores, where shoppers will be able to buy everything from concert tickets to takeout Chinese food to.cold tablets? Most analysts are upbeat the fast-growing retailer's term prospects, some snags in other new markets---~.2: including a serious run-in last year with health authorities in Reno and tion in Phoeni~ Smith's biggest' test yet 'wil~'~ begin Thursday in Oxnard. where it will open the first of the supermarket-drugstores it plans to build in the southern half of the state by 1995. At 79,000 square feet, the gleaming "combination stores" will be twice the size of many competing supermarkets. They also will be a far cry from the beat-up marke(s the company sold seven years ago when it operated here under the name Smith's Food King. "We'll be the only place in Southern California where you can - truly do one-stop shol~ping." crowed Jeffrey P. Smith, the com- pany's 41-year-old chmrman and chief executive and the late found- er's middle son. P'or some consumers, the rapid 'influx of combination stores will probably mean more choice-and lower grocery bills. - Analysts generally empect su-' permarket price battles to flare for -several months 'or more in the neighborhoods that Smith's enters · as entrenched grocers fight to hang on to their customers.-Over the long run, Smith's says, its prices will usually he in line with those of ..... Lqcky_ s_u_p_ermarkets, which,is con- 65,,.~0 square feet. "It jus'. seems too big ~.o me," said Sarah Oman, a University of Utah sophomore who eccasionally shops at Smith's. · In fact, a leading supermarket analyst who has long been a burr in Smith's hide is slamming the ex- pansion plans 'and questioning whether all of the chain's proposed · stores will open in Southern Cali- fornia. The critic, Gary M. Giblen of Paine Webbet Inc., contends that the company is headed for a bad fall because of an "inexperienced and unseasoned" management team that is moving too quickly and overspending· ' "They build the nicest stores in town for the sake of building the nicest stores in town," Giblen said. .- As evidence that the company's growth has gotten out of manage- . .ment's control, Giblen points to a variety of "unfathomable errors" :that suggest that more problems .Tare just waitipg to happen·" .. In Phbenix--where Albertson's and longtime, local supermarket '.chains have given Smith's an un- expectedly tough battle--the corn- spring agreed under its pric&com- state Con - were mislead- also being inx~estikated U:S. Labor Department, r'~on a charge that it -employees in 6'W0rk overtime and then them for all of their A settlement is ex- s stores in Reno Sparks. County cited Smith's ~. among other e'lckroaches in a dc~r f:a.d section. Also. furniture 'iW~. nse': ',~ clean a foo,! prep~l'~'t{,Jn :.ah:.,, :rod motor Oil wa.< stored next to a meat preparatlor~ · .Jeanne Rucker, who supervlso,: the Smith's inspections for Washoe County District Healt~ Departmeht, said the problem continued for two years and cal!q · the warst sanitation sltuat:on she has seen in her i2 years in ~, field. "They would take care of problem, and then lhe,.'d basically out of conEro[ .d [~73.~ . these two stores.' Last October. Rucker said. her department threatened to close the Reno and Sparks stores. Now, however, Smith's has taken cor- rective steps and is doing a "pretty good" job, she said. Rucker added that the stor~s remain "very popu- lar" with shoppers, - ..... Jeff Smith characterized the In- Company executives soft-pedal the impact they will have in Southern California, saying they don't expect to rattle the likes of Vons, Lucky or Ralphs. Smith's predicts that it will snare about 6% of the market when its projected 50 to 60 stores are open, which would bor and health incidents as tyl~ical make it at best the fifth- . : . ! . sixth-biggest chain here. operating problems in the super- market business and said the com- pany normally acts swiftly to make improvements. He blames local managers for what happened in Reno, saying they neglected notify corporate executives in Salt Lake City about the situation and then faLied to handle it themselves. Still, Smith's has been a big hit with consumers, particularly among shoppers who think bigger is better. Along with conventional supermarket and drugstore goods,~, Smith's stores feature specialty departments' providing video rent- Y service. . In Southern C~Iiforhia, there will also be customer service centers where shoppers 'can marl packages, pay utility hills, f~ letters and buy ticke~ for ballgames or ro~k con- or Although many of the first stores will be in the Inland Empire, Smith's hopes to build supermar- kets throughout Southern Califor- nia and, Iater on, over the entire state. The potential sites include a location in depressed South-Cen- tral Los Angeles, a territory that most of thd other sul~rmarket and general merchandise chains have largely abandoned. Leading the charge is Jeff Smith, who flies around the West to check ~ut possible sites for stores on his company's fleet of four jets. · - A stylish dresser who wears gold rings on both hands~ Smith likes to relax at his vacation home in the posh Vintage Club development in the Southern California desert town of Indian Wells. He added to his personal wealth in July when he sold a sliver of his corporate stock for $10 million in the'compa- certs. "You don't have to go any- 'ny's stock offer ng" ,. ' . · . where .else," .said JonathanH.~!: ~.~ · ....-.. ,. :-i ~.<'!.-~i'. f R other $12 mLihon f nmgest orm · .....'; ..... . lower-profile younger brother ' ' ' ' ~" ichard D. (Richie) Smith, 37, the ~ans of the ~tore~' in other cities ~ company's ~resident and chief bp- also enjoy the clean look and eraling ~fficer. Giblen questioned , wide-open ambtence. "I like the wide aisles," said Dorothy Gilbert, whether the stock sales by the, brothers are a sign that the Smiths · a retired dental ~sistant in Salt are worried about the company's Lake City. "I rarely get someone in front of me where I have to say, 'Will you please move?'" Likewise, most Wall Street ana- lysts who follow the company are bullish on its long-term outlook. The company's stock is hovering at one of the highest price-to-earn- ings ratios in the indt:mtry. Even after falling $2.875 last Week to close at $39.125 on Friday, appar- ently because of short-term con- cerns about slowing supermarket industry sales, Smith's stock was · selling.for 19 tir~es its projected earnings per share for 1992. Profits and sales have been ro- bust for several years. Last year earnings soared 31% to $34.3 mil- lion on sales that climbed 17% to $2.03 billion. immediate prospects. But Jeff Smith said he simply wanted the raghey to pay off taxes and to diversify his personal holdings. The Smith brothers, to some extent, have lived in the shadow of their father, Dee ·Smith, who died 'in 1984. A portrait of their father still adorns all of the eompany's stores. The eider Smith expanded the company from a pair of small mai'kets in the late 1940s into a major Western chain by buying failing grocery chains and turning them around. One of the few times the company's Midas touch failed was in Southern California, where it bought the former Food Giant stores. Jeff Smith said the company's Southland stores then badly need- ed expensive remodeling, so when Lucky offered a good price for the locations. management jumped at the chance to pull out. Now Smith's is returning with a combination store format developed during the sons' reign. . How could Smlth's fail to make it in Southern California? For start- ers, Smlth's big stores will be expensive to b?Jild and run. They will need to attract customers from as far as throe miles away to bring in enough revenue to prosper. That means that many customers would have to like Smith's enough to pass by one or more of their closer, existing neigh, borhood stores. thor cgmplications could also O drive up Smith's expenses, Lacking a major local warehouse. Smith's will truck in frozen foods all the way from Phoenix. The Southern California stores will be ;- unionized. unlike most other Smith's locations. On top of that, some analysts say, Smith's will face tougher com- petition in Southern California ~.han it has in any previous market. But Jeff Smith discounts those issues. The chain's strong balance sheet, he said, will enable it to sustain early start-up costs. I~ addition, Smith said, Smith's Food & Drug is ~ccustomed to high labor cosre; he said ~e company has avoided unionization else- where by paying high wages. Store managers' annual salaries ,and bonuses, company exec'ufives .flay, have averaged:close to '.As for i~ Southern' California competitors, Smith said, his com- pany has gone head-to-head agains~ Voni, Lucky and Albert- son's in Las Vegas and fared well. He also isn't worried by the fail~e of Ralphs' Giant format in Southern California. Smith main- tains that Giant flopped because, among other reasons, its prices . veren't low enough and because i~ stores were too close to competing ~]phs superm~ke~. Smith said his company decided to return to California to main~n i~ brisk growth largely because the state is less saturated with supermarkets than other parts of the West, particularly when it comes to big combination stores. He cited average weekly sales per square foot estimated at $12 for major supermarkets in Southern California versus $7,50 m other regions where Smith's operates. [n addition, Smith said, the shrinking but still-heavy deb~ loads burdening the Vons, Ralphs and Lucky chains will curb their ability to compete agains~ the new Smith's stores by cutting prices or building new supermarkeus All told, Smith said, iCs h~ t;me for his company to return. r :, .' Price Battles .' Most Likely e'.~ llld~mlil:eiffetoui.hefforthem- TIle aRm,q, ix~ee wee have a c, wl~lr. ol getting slatted even when few, ~ stay, of the bumne~aee re- volved wallt them. That'8 what ' ~ Wotrjdn8 some supematKe~ 8a~t~aM,~lnd raising hopes eo~sume~ advocates these days. · fe be sure, most experts down , - DII3rtbe ice that re~ent devel ,. o[l$1mtl toiling the Southern Cau- ~ tO04 store market--tact, taw t~e return of the Smith's Fn, &]~Cel~tetl cham--w~[[ I~dl-o~t. prtce war. Mudl more probable. they a,~ ]oeal[~l price battles aml"'a ~ incitv~dual supermarkets ~n neighborhooeLs tha~ Sm~th's at [cut lot the first severat mot'~ afar the new stores open. Working agams~ wldespr..=. aa labor costs. The major ma~ke~, in fact. are negotlat~ . PRICES: Pressures on Grocers Are Building Continued from DI new contract with the Teamsters union this weekend, which could make it difficult for the chains to cut prices sharply across-the- board. Still, if one of the top chains gets jumpy about intensified Southern California-wide competition and slashes prices at all of its stores to hang on to customers, there could be a major chain reaction. "We're not going in to start a price war, but if somebody else wants to cause one, we'll be right in the middle of it," said Jeffrey P. Smith, chairman and chief execu- . tire of Smith's Food & Drug Cen- ters. . Smith says his chain~ ,.,ans to offer an "everyday low-nrices" approach in line with tha~ Lucky supermarkets, which is regarded as having the lowest across-the- hoard prices among the big Southern California chains. Smith's will provide face-value discounts on manufacturers' and competitors' coupons, rather than the "double coupon" discounts offered at Vons, Ralphs and Alpha Beta. Salt Lake City-based Smith's, which plans to build 50 to 60 giant supermarket-drugstores in the ar- ea by 1995, says it hopes to attract customers over the long run large- ly with its "one-stop shopping" format. If-that approach fails, "that's when they're going to do some- thing" to undercut competitors' prices, predicted Brad Freeman, a partrUer in a Los Angeles buyout firm that specializes in m~permar- ket deals. By itself, Smith's won't, be big · enough to trigger a price war. Even when all of its Southland stores are built, the company says, it expects to gain no more than a 6%-market share. "We're not looking to cause a total disruption in the mirketplaee," Smith's arrival could put pressure on grocery prices throughout Southern California. Vons and Ralphs, two of the top three chains, are now more, robust financially after having struggled with heavy debt burdens. They may be in a better position to cut prices than before. American Stores, having trimmed its debts by selling Alpha Beta supermarkets in June, is ex- pected to focus more attention on its Lucky division. Likewise, the new owner of Alpha Beta, Yucaipa Cos.. wants to revitalize its new stores. 'We're not going in to start a price war, but if ( \ somebody else wants to cause one, we'll be right in the middle of it,' JEFFREY P. SMITH Chairman and Chief Executive of Smith's Food & Drug Centers local price competition in July when it launched its "rock- bottom" prices format. The move involved scrapping its "double coupon" policy in favor of lower prices across-the-boarcL Meanwhile, Lucky, Ralphs, Al- bertson's and Stater Bros. Markets, the dominant chain in the Inland. Empire. have continued opening new stores during the recession. Although most analysts and execu- tives say Southern California's in- creasing population can support the new stores, not everyone is convinced. "The pressures are building. and one of these days, one of these guys will have to break in price to bring Smiths aid. more people in the door," said Taken t/~gether with other Howard Plinker, a New York in- ,.changes in the market, however vestment adviser who is betting on a decline in supermarket stocks. The fact that supermarket exec- utives don't want a price war. Flinker says, is irrelevant. "I don't know+ if there's ever been a price war where ,a competitor-wanted one," he argued. Most industry executives and analysts, however, write off the idea of a fulI-fledged price war. Gary M. Giblen, an analyst with Paine Webbet, points to the expe- rience of market leader Vons, which he says hasn't been hurt by the recession or by Albertson's recent price gambit. Further, he says, Vons' prices already are low -when you take its double coupon discount and specials into accounL Jack H. Brown, chairman and chief executive of Stater Bros., also dismissed the possibility ~f a price war, but for a different reason. Southern California, he said, "is experiencing the deepest price wars.. . that the chains here can survive with." '- Brown maintained that super- markets already hurt by the Southland's weak economy aren't willing to engage in a price war that would pinch their profit mar- gins further. "From a price standpoint," he added, "Smith's brings nothing new to the table. They can't under- price Lucky." Still, Brown said, look for super-, markets competing with the scat- tered new Smith's locations to offer more discounts in the form of "in-store specials" and "manager's specials" to retain customers loyal- ty. "Thoro's business to be had (by Smith'sI, but it won't be our busi- ness," Brown s~d. Vons. which has 311 stgres in Southern California, will "deal with the Smith's locations, as I'm sure our competiWrs will on a location-by-location basis," said spokeswoman Mary M. McAhay. She declined to ~laborate, other than to say that pricing is only one of .the. chaln's competitive weap- - Headquarter~ Salt Lake City Uta~ . ,: '.~.: combina~On suPe~ke~gs~r~:in the W~ Top Ex~tlves: ~eEfrey .P;: S~: ch~an ~d :* c~e}*'~ve . Major Shareholder: ~an'Jeff~y*p. S~' 0~ or 48.2% of ~e voting st~k ~ ~m sh~ held ~ a ~srfo=.h~ · mo~er. Zd~ The n~ bigg.t yoU~ bl~k, 8.3~, ~beid by o~ the Ch~ch of ~es~ Ch~st of the ~tter; Day ~n~,: ~yen prefe=ed sh~es in a ch~ble dona~io~ ~dent ~ch~d ' D. Smi~ controls 6.9% of the-yoUng s~k, ~d ~r ~ ~. ' Smith, 4.6%. ..... .- ~se ~% ~ $2~.2 milton o6 ~"'~t incre~ 9%.~ $].~ St~ P~ance: Since ~e ~m~y went public ~ June, i'~, s~k h. mng~ f~m a 10~ 0f $~.~ to ahigh of ~3.75. _~day on ~ New York St~k ~ch~ge at ~. 1~. Having built Smith's Food & Drug Centers into one of the West's best-run supermarket chains, Jeff Smith is now embarking on his most difficult challenge by far. Mr. Smith goes to Riverside By John H. Taylor HAS IEFFP,~Y SMITH finally bitten off more than he can chew? When it comes to taking risks, few chief executives have been as aggres- sive as Smith, the 41-year-old chair- man of $2.2 billion (sales) Smith's Food & Drug Centers. Taking over the Salt Lake City-based food chain four years ago, Smith scrapped the blueprint set in place by his late father, who found- ed the company in 1948 and died in 1984. Out went his father's strategy of building only 42,000- square-foot supermarkets, featuring mosdy food items. Smith now builds ant 75,000-square-foot stores, where shoppers can get eve .ryff~ng from con- cert tickets to fax service 5nd full-service banking. In ~ts home base' of Utah, Smith's even sells ski-li~ passes and bus tokens. Nor was Smith content to stay in Salt Lake City and Las Vegas, where his stores have market shares of and 38%, respectively. Be- ginning in 1987, leffrey and his youn- ger brother Riehard, the company's president, expanded into Tucson, Reno and Phoenix. All told, $mith's Food & Drug now has 100 stores in seven states--Utah, Arizona, Nevada, New Mexico, Idaho, Texas and Wyo- ming. Over the last five years, the company's average return on equity. of 17.7% and average earnings-per- share growth of 20% rank ~imong the best in the supermarket industry.. 58 Now comes Smith's biggest test. By the end of the decade, he plans to spend $1.4 billion to open 120 stores in California. The first 60 stores will be built in southern California--9, in fact, were opened late last year. The company began to raise money for this foray last summer, with a $170 million secondary stock offering. It plans to fund the rest of the expansion through a combination of operating cash flow, debt and sale/lcasebacks of new sites. Southern California will stretch Smith's abilities as they've never been stretched before. Five' chains already have over 100 stores each in the re- gion, and openring costs are 20% higher than in other areas where Smith's now has stores. Says Gary Giblcn, a PaineWebber anal('st wh~ has followed Smith's Food 8/Drug's progress over the years: "This is a bet- the-ranch proposition." In d~:fense of their strategy, Smith's execuuves point our that weekIv su- permarket sales in southern Calif6rnia average $12 per square foot, 60% more than other areas where Smith's operates. The higher operating costs, in other words, should be offset by higher revenues. Smith's has a hidden weapon: a relatively underlcveraged balance sheet. By contrast, major southern California competitors Vons Cos. (309 stores) and Ralph's Grocery. Co. (1S8) are heavily leveraged. Ralph's, which went throhgh an ill-fated lever- aged buyout by the Campeau Corp. in 1988, had nearly $900 million in debt and negative net worth in Octo- ber, though the company is said to be Smith's Food & Drug Centers Chief Executive Jeffrey Smith (left) and his brother Richard, company president lettinlttm Nlullttltaltlllelf mmm c~nfldering a public offenng. Despite raising $122 million in a secondan, offering last May,-Vons has a debt-to'- equity ratio of 1.7 to 1, compared with Smith's 0.8 to 1. "We can attack aggressiveiv on price," says Alan Hoef~r. a Smith's board member, "and they ~on't be able to respond." ' To succeed with fewer stores than its big competitors, Smith's wfil have Forbes · Febman 17. 1992