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HomeMy WebLinkAbout1992/04/02 - Agenda Packet - (2)CITY OF RANCHO CUCAMONGA MEMORANDUM DATE: March 18, 1992 TO: FROM: p~idential/Institutional Design Review Committee Wendy Vallette Peter Tolstoy Dan Coleman John Melcher (Alternate) Steve Hayes, 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 y ur conunents 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) PLANNING 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- SH: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 Center Drive Rancho Cucamonga, California 91729 Re: Smith's Food and Drug Center #702 FOothill at Vineyard Letter of Justification for Pre-Application Review Environmental Settina: 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 supermarke~ 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 tha~ 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. 1 7 4 4 BERKELEY ST. SANTA MONICA CA 90404 310 453 4548 FAX 310453-4870 159 WEST PIERPONT AVE SALT LAKE CITY UT 84101 801 521-9111 FAX SO15219158 '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 ~nd 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 at'the 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 of building materials. eating. Up the Supermarket Wars · Grocers: Smith's of Utah sold its Food King · outlets in the Southland, seven years agq, but it's returning with mega~tores. By STUART SILVERSTEIN TIMES STAFF WRITER , The last time it did busini~ss ~n Southern California, Smith's Food & Drug Centers go!.ru~ out of town.· .Now, Salt .Lake City-based Smith's is one of the hottest~ super- market chains n the West, and it's coming back to the ~outhland, with: a score to settle., WAlt 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 about the fast-growing retailer's long- term prospects, even though it's hit some snags in other new markets-- including a serious run-in last year with health authorities in Reno and tougher-than-expected competi- tion in Phoenix. Smith's biggest: test yet 'will begin Thursday in Oxnard, where it will open the first of the 50 to 60 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 markds the company sold seven years ago when it operated here under the name Smith's F'ood King. "We'll be the only place in Southern California where you can truly do one-stop shopping," crowed Jeffrey P. Smith, the com- pany's 41-year-old chairman and chief executive and the late found- er's middle son. , l~or some consumers, the rapid influx of combination stores will probably mean more choice-and lower grocery bills. · Analysts generally ei-pect 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 be in line with those of Lucky supermarkets, which,is con- - sidered to have the lowest across- ~ the-board prices in the Southland. '-' '... But for Smith's, which has ,100 stores from Idaho to Tens. the · , push into Southern California ~:ep- · resents a big gamble in a compli- cated, sprawling market. The pre- cedents - for ' super-sized supermarkets here aren't encour-' aging. ' · ' , ' ' - - Ralphs, for instance, flopped in , the late 1980s with its Giant ware- house store format, which had Please see SMITH'S, D8 : Continued from D1 . · ' many of the services Smith's will offer. Vons has had better luck with its 'upscale Pavilions chain, but even the largest of those stores is 14,000 square feet smaller than the Smith's sdpermarkets will be. ' Many shoppers are turned off by dupermarkets exceeding 60,000 to 65,000 square feet. "It just seems too big to me," said Sarah Oman, a University of Utah sophomore whO occasionally shops at Smith's. · In fac(, 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 efttie, Gary M. Giblen of Paine Webher 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 ."are just waiting to happen." In Phbenix--where Albertson's ;and longtime ~local supermarket ',chains have given Smith's an un- expectedly tough battle--the corn- - -party ':this spring agreed. under ·pressure to change its pricd-com- ·.parlaSh hewspaper ads. The state ; 'attdime~;:g~n~ral's office had con- 'iil~/~i:~i'/~.l~'::im,'a charge that it pressUFed::soi'd'e'.employees in : PhOeiii/td ~;0rk overtime and then -' f.ailed".,tb~;pay them for all of their extra2h~rs A settlement is ex- pected shortly· ' 5' But- ~.he worst embarrassment "came at two Smith's stores in geno and'heighboring Sparks· County ! health :authorities cited Smith's aRer 'discovering, among other thinglt' ants and cockroaches in a dell department and vermin drop- pin~s' in a dog food section. Also, authorities charged, furniture pol- ish was i~sed to clean a food preparadoh table and motor oil was stored next to a meat preparation · Jeanni~ Rucker, who supervised the Smith's inspections for the Washoe County District Health Department, said the problems continued for two years and calls it the worst sanitation situation that she has seen in her 12 years in th6 field. "They would take care of one problem, and. then they'd have three more," she said. "They were basically out of control. at least at 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 la- bor and health incidents as tyl~ical operating problems in the super- market business and said the com- party normally acts swiftly to make improvements. He blames local managers for what happened in Roan, saying they heglected to notify corporate executives in Salt Lake City about the situation and then failed to handle it themselves. Still, Smith's has been a big hit with consumers, particularly amon~ shoppers who think bigger: is better· Along with co~,ventional ~ supermarket and drugstore goods,'[~ Smith's stores .feature specialty departments' p~:oviding video rent- als, fresh frozen yogurt, one-hour photo 'processing and dry-cleaning ' . In Southern Califorhia, there will also be customer service centers where'shoppers'can .mail packages, pay utility bills, fax letters and buy. tickets for ballgames or ro~k con- certs. "You 'don't have to-go any- 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 make it-at best the fifth- or , sixth -biggest chain here. Although many of 'the first stores will be in the Inland Empire, Smith's hopes to build supermar- kets throughout Southern Califor- nia and, later on, over the entire ] state. The potential sites include a location in depressed South'Cen- tral Los Angeles, a_~rritory that , most of th~ other supermarket and ' general merchandise chains have largely abandoned. '- Leading the charge is Jeff Smith, who fiie~ around the West to check Out 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 the Southern California desert town of Indian Wells. He added to his personal wealth in Jdly when he sold a silver of his corporate , stock for $10 million in the'compa- , ' ny's stock offer ng' '. '.. '. · where .else," .said Jonathan H."~ · ~.;,-...:~:... -.. Z Lt:'. ,,,-:y:. ~ .. Zieiler, an 'analyst with'SutL?i2 2'-!:i L: ' noth ': rom the co..., thlnk they have the......--,.;..,. Aofferi%$L2as 'o* te his; · .,, ,.,~.~ ?~;~,' ~ - . - , . F~ans of the ~tore~' in other cities company's ~resident and chief 5p- ' also enjoy the clean look and wide-open ambience. "l like the ' wide aisles," said Dorothy Gilbert, a retired dental assistant in Salt 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 ind'4stry. Even after failing $2.8'/5 last week to close at $39.125 on Friday, appar- ently because of .short-term con- corns about slowing supermarket industry sales, Smith's stock was · selling'for 19 times 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. ' orating .officer. Giblen questioned whether the stock sales by the brothers are a. sign that the Smiths are worried about the company's . immediate prospects. But Jeff' Smith said he simply wanted the mgney 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 .stl,l adorns all of._c?pan/' S Stores. The eider Smith expanded the company from a pair of small markets 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 Smith's fail to make it in Southern California? For start- ers, Smith's big stores will be expensive to build and run. They will need to attract customers from as far as three 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 neighborhood stores. thor cT~mplications could also Odrive up Smith's expenses. Lacking a major local warehouse, Smith's will truck in frozen foods all the way from PhoenLx. The Southern California stores will be :- unionized, unlike most other Smith's locations. On top of that, some analyst~ say, Smith's will face tougher tom- petition in Southern California ~.han it has in any previous market. But Jeff Smith discounts those issues. The chain's strong l~alance sheet, he said, will enable it to sustain early stab;t-up costs. In addition, Smith said, Smith's Fo6d & Drug is a:ccustorhed to high labor costs; he said the company has avoided unionization else- where by paying high wages. Store managers' annual salaries and bonuses company exec'ut~ives .,say, have averaged .'close to ~ $90,000. ~ ZAs for its Sou/.hern' California competitors, Smith said, his com- pany has gone head-to-head against Von~, Lucky and Albert- son's in Las Vegas and fared well. He also isn't worried by the failure of Ralphs' Giant format in Southern California. Smith main- tains that Giant flopped because, among other reaso~s, its prices _ 'weren't low enough and because its stores were too close to competing Ralphs supermarkets· Smith said his company decided to return to California to maintain its 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 $7.50 in other regions where Smith's operates. In addition, Smith said, the shrinking but still-heavy debt loads burdening the Vons. Ralphs and Lucky chains will curb their ability to compete against the new Smith's stores by cutting prices o~ building new supermarkets. All told, Smith said. it's high time for his company to return· After ttteir fathet buiR a ~haln'ot'~llilsssPJf supermarketr,.JqffrC~,$...n~,, teft. an~.! ~. a~, d 80tabera California's debt- . \<':"s:;,' :' ' consumer adv~at8 these days. TO be sure, most experts down- ota~ente toiling the Southern Call- folfia food store market--inclu- · clingthe return of the Smith's Food i DrugCenters chain--will trigger all all-out Imce war. Much more probabte, they say are localized price battles among the individual supermarkets in neighborhoods that Smith's enters at least for the first several month~ after the new stores open. Working against widesprea,~ price wars are rising expenses such as labor costs. The major super- markets, in fact, are negotiatmg a(3 PRICES: Pressures on Grocers Are Building Continued from DI Smith's arrival could put pressure new contract with the Teamsters on grocery prices throughout union this weekend. which could Southern California. Vons and make it difficult for the chains to Ralphs, two of the top three chains, cut prices sharply across-the- are now more, robust financially board. after having struggled with heavy SfiiL if one of the top chains gets debt burdens. They may be in a jumpy about intensified Southern better position to cut prices than California-wide competition and before. slashes prices at all of its stores to American Stores, having hang on to customers, there could trimmed its debts by selling Alpha be a major chain reaction. Beta supermarkets in June, is ex- "We're not going in to start a peered to focus more attention on price war. but if somebody else its Lucky division. Likewise, the wants to cause one, we'll be right new owner of Alpha Beta. Yucaipa in the middle of it," said Jeffrey P. Cos., wants to revitalize its new Smith, chairman and chief execu- stores. ters. . . ( fi Smith says his hal ~.,ans cn to offer an "everyday low-nrices' approach in line with tha~ Lucky 'We're not going in to supermarkets, which is r~garded as having the lowest across-the- start a price war, but if ( board prices among the big somebody elsewantsto Southern California chains. Smith's will provide face-value discounts cause one, we'll be right on manufacturers' and competitors' in the middle of it.' coupons, rather than the "double coupon" discounts offered at Vons, JEFFREY P. SMITH Ralphs and Alpha Beta. Chairman and Chief Executive Salt Lake City-based Smith's. of Smith's Food & Drug Centers which plans to build 50 to 60 giant , supermarket-drugstores in the ar- ea by 1995, says it hopes to attract local price competition in July customers over the long run large- when it launched its "rock- ly with its "one-stop shopping" bottom" prices format. The move format. involved scrapping its "double If -that approach fails, "that's coupon" policy in favor of lower when they're going to do some- prices across-the-board. thing" to undercut competitors' Meanwhile, Lucky, Ralphs, Al- pricer, predicted Brad Freeman, a bertson's and Stater Bros. Markets, partner in a Los Angeles buyout the dominant chain in the Inland firm that specializes in supermar- Empire, have continued opening ketdeals. new stores during the recession. By itself, Smith's won't be big . Although most analysts and execu- enough to trigger a price war. tires say Southern California's in- Even when all of its proposed creasing population can support Southland stores are built, the the new stores, not everyone is company says, it expects to gain no convinced. more than a 6% market share. "The pressures are building, and "We're not looking to cause a total one of these days, oneof these guys disruption in the marketplace," will have to break in price to bring Smiths aid. more people in the door," said Taken together with other Howard Flinker, 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 thoro'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 fuil-fiedged 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 account. Jack H. Brown, chairman and chief executive of Staler B, ros., also dismissed the possibility of 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 tabl% 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's], but it won't be our busi- ness," Brown said. Vons, which has' 311 stBres in Southern California, will "deal with the Smith's locations, as I'm sure our competitSrs will, on a location-by-location basis," said spokeswoman M~y M. McAboy. She declined to ~laborate, other than to say that pricing is only one of .the chain's competitive weap- Smith's at a Company: Smith's'Fo0 ~C~ters ~ .. - ..... , - .~ . Headquarters: Salt Lake City, T,Ttati . :.: - Business: ~erator of a:~h~h='of ~ery stores~mostlyj~a~t combina~0nsupermarket;~s~r~s~dtheWest* - Stores:'l~ with plan~f~r 50~ih Southern Califo~ by 1995~*~* Employe~ More than 15 ~ :~?". *; ' - ' ::**~* -. ~.-' :: - ToP:Ex~utives~'~e[frey..P~:S~ffi:~ch~an and.chie~"~ve; Rich~d' D.-Smith, presidb~t~'~d~=~hi~f operatin~;~er: Ro~rL D ~ ' ~linder, ~hief financi~":Sf~d .Kenne~-~. ~e, m~agerforC~ifornia. :-,';~-,~%~:~:'V ~ ': ' · "'~f' . Major Shareholders: Ch~an'~ffrey*P Smith Om or cSntrolS'. 48.2% of the voting st~k,~nly from sh~es held in a ~ust~for.hffi ' mother, Ida. The ne~ biggest voti~ block, 8.3~, ~'held by of the Church of Jesus Ch~s[ of the htter~Day S~n~,: whi~hz~as ' given prefe~ed shares in a ch~ble donation. ~dent Rich~d D. Smith controls 6.95 of the-voting stock, and ~ector Smith, 4.6%. "· .... ' - -: . Rnaaclal Results: Net income cli~ from $12.5 ~0n in~l~ $34.3 million last ye~. S~ ~.ffie .~e pe~ r~ from~2.2 ' milliod to $2.03 billion. I~ ~ f~t m ~onths 0f. 1~1, net~.~Come _ rose~%~$21.~milHono~'ffi~tincre~9%,~$1~b~on' Stock P~S~ance: Since the cdm~y went public i~ June, i989, st~k has ranged from a 10W 0f $~.~ to a high of $43.75. It'C}osed Friday on th~ New York Stock hchange at $39. 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 JEFFREY SMITH finally bitten off more than he can chew? When it comes to taking fish, few chief executives have been as aggres- sive as Smith, the 41-year-old chair- man of S2.2 billion (sales) Smith's Food & Drug Centers. Taking over the Salt Lake Cit3'-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 gi- ant 75,000-square-foot stores, where shoppers can get evervthing from con- cert tickets to fax service and full-service banking. In its home base' of Utah, Smith's even sells ski-lift passes and bus tokens. Nor was Smith content to stay in Salt Lake City. and Las Vcgas, where his stores have market shares of 40% and 35%, respectively. Be- ginning in 1987, Jeffrey and hi.'s youn- ger brother Richard, the company's president, expanded into Tucson, Reno and Phoenix. All told, Smith'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 reRIrn orl equity. of 17.7% and average earnings-per- share growth of 20% rank among the best in the supermarket industr3.,. 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 Smith's now has stores. Savs Gary Giblen, a PaincWebber anali,st who has followed Smith's Food & Drug's progress over the years: "This is a bet- the-ranch proposition." In defense of their strateg3', Smith's executives point out that weeldy su permarket sales in southern California 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 underleveragcd balance sheet. By contrast, major southern California competitors Vons Cos. (309 stores) and Ralph's Grocer)., Co. (158) are heavily leveraged. Ralph's, which went through 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 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 salc/leascbacks 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 operating costs arc 20% higher than in other areas where Smith's Food & Drug Centers Chief Executive Jeffrey Smith (left) and his brother Richard. company president Bettlnll ~ ranch thM they C811fomlt considering a public offering. Despite raising $122 million in a secondary offering last May, Vons has a debt-to- equip' ratio of 1.7 to 1, compared with Smith's 0.8 to i. "We can attack aggressively on price," says Alan Hoet~rl a Smith's board member, "and they won't be able to respondY To succeed with fewer stores than its big competitors, Smith's ~fill have to attract customers from as far away 58 Forbes · February 17, 1992