Zapolski Real Estate has announced preliminary plans for downtown Napa’s largest private development – one that could cost $250 million and displace Kohl’s department store.
The project would include the relocation of Kohl’s and construction of a new hotel, apartment building, commercial space (for tenants such as a grocery market) and a public gathering area with new access points on the Kohl’s footprint, said Andrew Mazotti, director for Zapolski Real Estate.
“Downtown Napa is great,” said Mazotti. “We’ve come a long, long way” since the Great Recession and other challenges. However, “We still have a way to go,” he said.
“You want your downtown to be ‘live, work, play,’” said Mazotti. Today in downtown Napa, “We have a lot of play, and a good amount of work but not much live. We’re looking to substantially change that.”
The current Kohl’s parcel is an underused site in downtown Napa, said Mazotti. “If it stays that way, it will hinder the progress of downtown because of its size and its poor design.”
“It looks and feels wrong” for today’s downtown Napa, he said. “The trick is how do you maximize a higher and better use there?”
The size of the site and the fact that Zapolski Real Estate already owns the two blocks next door, “allows us to do something special.”
According to Mazotti, “If we can get this done, I think it will be a substantial improvement to downtown, one of the most significant we’ve seen.”
The developer said he wants to continue to build on the momentum in downtown Napa that started about a decade ago.
“Let’s keep the momentum going; let’s not let this COVID-19 outbreak discourage us,” he said.
Zapolski Real Estate already owns the Kohl’s building — along with the adjacent Gordon Building at First and Browns streets and the entire First Street Napa project, formerly known as the Napa Town Center, that stretches two blocks to the west.
The Napa City Council voted on June 23 to sell the parking lot north of Kohl’s to Zapolski Real Estate for $870,000. The parking lot also includes a vacant bus terminal.
At that meeting, Vin Smith, the city’s community development director, said that relocating Kohl’s would “free up the site to redevelop it into something that would be more consistent with a downtown environment. That Kohl’s building is typically not the size of a building you would see in a downtown,” he said. “It’s very large and imposing.”
Downtown will benefit from having a planned “visual connection” between First Street Napa and Main Street through a site that needs redevelopment, Smith said.
“You’d be introducing 120 new residential units — that’s roughly 200-plus new people living in downtown,” said Smith. That’s many more than the 51 units at Register Square on the former site of the Napa Valley Register, he said.
The redeveloped Kohl’s site would have a passageway, allowing pedestrians to flow from the interior of First Street Napa to Main Street, said Mazotti. With two acres to work with, “We are able to get very creative and use a lot of space for public gathering.”
The city and Zapolski Real Estate noted that redevelopment of the Kohl’s site is only in the beginning stage. Kohl’s, which has a long-term lease at its current location, needs to find a new home and then the city will review this new project for the development agreement and design review.
City Councilmember Scott Sedgley said the concept “has a lot of merit,” but he didn’t like the amount of time the city would allow the buyer to retain the right to buy the parking lot – as long as 17 years.
City Council member Doris Gentry supported the sale of the parking lot. “People do want to live downtown,” she said.
She didn’t mind the long escrow period for the parking lot sale, noting that the developer would be taking on “an enormous gamble and risk” to create such a large project.
While plans call for Kohl’s to leave downtown Napa and the existing building to be demolished, this doesn’t mean Kohl’s is leaving Napa, said Mazotti.
“We have been in conversations with Kohl’s since 2015” about relocating, he said. “We said (to Kohl’s) ‘This doesn’t seem like it’s the best place for you guys.’”
“They are 100% remaining” in Napa, but “We’ve got a couple great options” for a new location.
One possibility might be the 7-acre parcel on 333 Soscol Ave. that was recently sold by the Gasser Foundation to Canadian company Ronmor Developers. The new owner had mentioned considering a big-box retailer for the site.
Doug Porozni, vice president at Ronmor, said his company has talked to Kohl’s about moving to Soscol Avenue.
“They are a considering our option,” said Porozni. “We have a pretty good location. It’s large enough to accommodate a full-size (Kohl’s) store. But we haven’t firmed anything up.”
Porozni said he hopes to have his tenants identified in the next two months.
Mazotti declined to talk further about Kohl’s moving.
“We don’t want to say much about that because we don’t want their employees to think all of a sudden Kohl’s is leaving and they’re losing their jobs,” said Mazotti. “That’s not the case at all.”
Potential new location choices “are in retail corridors that are much more appropriate for a Kohl’s department store,” said Mazotti. “Kohl’s will be relocating to a site that’s better for them and their customers. It’s a win, win, across the board.”
A spokesperson for Kohl’s declined to comment on a possible relocation.
“We do not comment on real estate speculation” and have “nothing further to share at this time,” said Weston Banker, a spokesperson for Kohl’s.
The new housing
Mazotti said that unlike other downtown residential projects such as Register Square and the Riverfront condos, Zapolski Real Estate is not looking to sell condos “that could be scooped up by second-home people.”
By offering units for rent, “We’re going to be even more pioneering” and “bring 24/7 energy” to downtown Napa by appealing to full-time residents.
Current plans call for approximately 120 residential units with 15 percent of those units reserved as “affordable” housing, said Smith.
Napans who have been longing for a grocery store to return to downtown Napa will likely appreciate Zapolski Real Estate’s plan to woo retail tenants, including a grocery market, and “more interesting uses,” or experiential offerings such as something like The Museum of Ice Cream or even a bowling alley.
“We don’t know specifically what these are going to be but we want the ground floor retail to engage” both residents and visitors, said Mazotti.
“If we were able to get a grocery store, it would be boutique in size (and) something that would be able to service the people who live in downtown,” he said. The residential component in turn would make the space more compelling to a grocery tenant.
According to Smith, the new hotel could include as many as 200 rooms in an “upper scale-quality” property.
Mazotti said the project could go as high as five stories, the same height as the Andaz and Archer Hotel Napa.
At the same time, the team wants to be flexible. Over time, if needed, the project could evolve — perhaps as only apartments or fewer or more hotel rooms or housing. It depends on what the city and the Zapolski Real Estate agree upon, he said.
First Street Napa leasing update
Mazotti also gave an update about leasing at First Street Napa.
To the naked eye, some stretches of the retail center may look empty, yet the project is now “over 70% leased,” he said, with a number of new tenant spaces under construction.
“We’re in the seventh, eighth inning of this thing. We’re pretty confident. That’s why we feel now is the time to start taking the steps to redevelop” the Kohl’s site, he said.
Mazotti said he often gets asked about progress at First Street Napa — and not all of it is positive.
“When you do these kinds of projects, everyone’s a critic. You get a lot of naysayers” and questions about which tenants are moving in.
“We understand your frustration,” said Mazotti. “More than anyone we want to see these stores open,” but it takes time to execute large-scale projects in smaller markets like Napa, he said.
“We have accomplished a lot” with Phase 1 of First Street Napa. “It’s just that everybody’s focused on the space that aren’t open. We try to let people know there’s a lot more going on than they can see walking down the street.”
After adding in the cost of Phase 1 of First Street Napa (around $200 million) and this second phase, “We will have spearheaded about half a billion of investment into downtown Napa when it’s all said and done,” said Mazotti.
“We’re hoping that we would break ground within 18 months,” he said. The current Kohl’s building would be demolished and the site razed.
“Construction would be a long period but our goal is hopefully to have all of this figured out within an 18 months period. We’ve been working on this for a long time.”
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