Shoppers looking to visit the new retailers promised at First Street Napa complex will have to wait a little bit longer. The opening date for the first of some 40 new merchants has been pushed back to spring 2018.
Even though developers Zapolski Real Estate and partner Trademark Property originally hoped to open at least some of the new stores when the Archer Napa hotel opens in October, it’s not going to happen exactly as planned. Developer Todd Zapolski attributed the delay to a combination of factors including construction due to the 2014 Napa earthquake, heavy rains last winter and a now withdrawn union appeal at the Archer Hotel.
“It’s not easy,” Zapolski said of the development process and the timing. “It’s a tough retail market. But we have a type of project that retailers are interested in.”
The 2014 Napa earthquake caused significant damage to the McCaulou’s department store building, he said. It had to be gutted and completely rebuilt. McCaulou’s ultimately decided not to reopen at the center.
In 2014 a union, UNITE HERE! Local 2850, filed two appeals of the approvals of the 183-room hotel development, challenging the environmental impacts of the proposed project. Those complaints were later withdrawn.
Extensive and prolonged winter rains caused construction delays this past winter.
“We’re not disheartened,” said Zapolski. “It’s a tough assignment. We’re pioneering. We have lots of arrows in our back. But we’re still moving and we’re very confident this will be what we envisioned.”
The delay, “It has nothing to do with our ability to accomplish our goals,” said Zapolski. “It’s just timing.”
“It’s not that we aren’t getting good response,” from potential tenants, he said, “we just can’t deliver it fast enough,” due to circumstances beyond his control such as the earthquake, hotel development and rains.
In addition, those delays caused somewhat of a domino effect for those new retailers who plan months in advance for upcoming retail seasons such as spring, holiday, summer, etc.
“You can’t open stores without knowing what season you are buying for,” Zapolski said.
The delay in opening First Street Napa retail doesn’t mean that Zapolski and Trademark Property have changed the nature of the tenants or the branding of the center itself.
It’s still billed as a “one-of-a-kind,” street retail and mixed-use development “primed for transformation into the premier shopping and dining destination in the region,” said marketing materials.
“First Street Napa will offer a unique blend of regional, national and international retail that the market demands, elevating Napa from first-class to world-class.”
“There are lots of fun operators that I think will bring a new dynamic to the Napa experience,” said Zapolski.
Some tenants have been announced, including Lush, Maris Collective and Compline wine bar, restaurant and wine retail shop. Compline opened on Sept. 11. Remaining former Town Center tenants include Eiko’s and Napa Valley Jewelers.
Zapolski would not yet name any other future tenants but he did say the mix would include both regional and national merchants.
Zapolski and Trademark have signed “lots” of leases and more are coming, he said.
Some of those tenants want to be sure other retailers are also committed to the project at the same time they are.
For example, “We have five tenants that we are working with that if one or two say yes, the other three will fall in line. The positive thing is that they are now talking to us instead of us chasing them,” he said.
In addition, the new office space above the former McCaulou’s department store is 80 percent leased. “It has done well,” he said.
Zapolski gave an example of one kind of potential tenant at First Street Napa – a custom shoe making group. While that company – which he did not name – is a smaller business, “that’s cool and fun that will bring something special,” to the district. “We’re talking to them,” he said.
Other potential retailers could come from Internet-based companies that are creating new brick and mortar stores.
“I’m not saying they are coming but,” one example could be a company such as Bonobos, said Zapolski.
Bonobos is an e-commerce-driven apparel company headquartered in New York City that designs and sells men’s clothing.
Athleticwear companies like Lululemon or Athleta are also popular leasing choices, he said. “We are definitely chasing,” those kinds of tenants and “we will have someone like that,” at First Street Napa, he said.
Zapolski said he’s had conversations with representatives for URBN brands — the company that owns Anthropologie, Free People and Urban Outfitters — but “nothing’s done,” he said.
Some of the URBN brands are adding new storefronts while others are reducing the number of smaller stores and leasing bigger spaces in more urban areas, he said.
In the early days of leasing First Street Napa, a brand like MAC Cosmetics might have been a strong possibility, said Zapolski.
But now that Macy’s, the department store that MAC partners with, has announced store closures, MAC is regrouping on its expansion plans, he said.
For national retailers, the choice of whether to open a store in Napa, “Is not about Napa, he said. “It’s what is happening with the brand,” both nationally and internationally, he said. If the brand contracts or changes tactics, “We’re collateral damage.”
Some brands only allocate a small number of stores to open in the entire U.S. in a year, he noted. Once those spaces are selected, that’s it.
“The kind of people we are talking about… are cherry picking locations,” he said. “Some are reducing overall stores and very carefully picking new locations.”
For some tenants, if they are opening new stores, they are only choosing locations “they are 100 percent certain of,” he said. For example, say, Dallas but not Napa.
On the other hand, newest tenant Compline didn’t want to wait to open, Zapolski said.
“They pushed on,” and are now open in the former Gillwoods café space.
When asked if he ever got discouraged or considered revising the branding of First Street Napa, perhaps stepping it down a notch to appeal to a broader base of tenants, Zapolski said the answer was no.
“We’re being patient,” he said. “We’ve come this far. We’re not going to dumb this down.”
In fact, “We’ve turned down a lot of folks,” that didn’t have the “energy and traffic we want to have in the project.”
In the end, First Street Napa “is like a great Napa cabernet,” said Zapolski. It takes time, but, “It will be worth it.”