LAKE COUNTY, Calif. – The Board of Supervisors is about to consider the appeals of a Texas development company over the Lake County Planning Commission’s denial of its plans to build Dollar General stores in Middletown and Kelseyville.

Cross Development’s appeal of the commission’s action regarding a store in Middletown will be heard by the Board of Supervisors at 10 a.m. Tuesday, April 18; the appeal for the Kelseyville store in the Clear Lake Riviera is scheduled for 10 a.m. Tuesday, April 25, according to the board clerk.

The meetings will take place in the board chambers on the first floor of the Lake County Courthouse, 255 N. Forbes St. in Lakeport.

At the same time as Cross Development is pursuing its appeals on those two projects, it has begun to look at another site in Lucerne, just three miles from the Dollar General store in Nice, and has submitted an application for a site in Lakeport, according to local planning officials.

Dollar General is a “small box” retailer based in Goodlettsville, Tenn., that in recent years has opened thousands of stores across the country, including many across the West. The stores have been popping up all over Northern California over the last few years.

The stores follow a basic formula that includes 9,100 square feet in total size, of which about 7,300 square feet is shopping space.

In early 2015, two stores built by Cross Development opened in Nice and Clearlake Oaks, as Lake County News has reported.

Since then, Cross Development – which builds stores to suit for Dollar General – has worked on other sites, including the one in Middletown, to be located at 20900 State Highway 29.

That plan has met with a large amount of resistance from community members, who criticize the company for paying primarily minimum wage jobs and selling inexpensive goods.

Also adding to the mix in Middletown is the issue of the community’s recovery from the Valley fire, and the small businesses that are struggling to keep their doors open.

Community members who have spoken out about the store plans at public meetings, including the planning commission, Board of Supervisors and Middletown Area Town Hall gatherings, have suggested Dollar General is predatory for its timing in pursuing the Middletown store.

The Lake County Planning Commission denied the Middletown project’s major use permit last April, citing concerns about the store’s fit with the Middletown Area Plan and traffic volumes, which were other key issues raised by community members.

In July, the Board of Supervisors, in a 3-2 vote – with Rob Brown and Anthony Farrington voting no – overturned the appeal, clearing the way for Cross Development to move forward on the Middletown store plan.

However, when Cross Development returned to the commission on Jan. 26 for the design review permit for a major use permit – which staff recommended the commission approve – there was significant community opposition and issues raised by commissioners themselves that resulted in the permit being denied unanimously.

In particular, Commissioner Bob Malley faulted Cross Development for continuing to locate the stores near schools, despite a company representative assuring him that the proximity to schools was not the reason for acquiring the sites.

Malley also faulted the store design, saying it looked the same as it had when they had started, and it wasn’t acceptable then, either.

The commissioners ended with unanimously denying both the project’s mitigated negative declaration and its design review.

Then, at its Feb. 23 meeting, the commission followed up by denying Cross Development’s application for a major use permit and design review plans for a store at 9781 Point Lakeview Road in the Clear Lake Riviera area of Kelseyville, citing similar concerns.

The three-hour hearing included testimony from a well-organized group of Kelseyville residents who opposed the store for reasons similar to those cited in Middletown.

The Kelseyville community previously had rallied successfully against a store being located across from Kelseyville High School.

The Lake County Planning Commission denied that project in May 2015 citing issues with traffic volumes and the store's fit with the community character. The Board of Supervisors followed up in August of that year by denying the Cross Development appeal.

Nationwide expansion continues

Cross Development’s efforts to move forward on its Lake County projects for Dollar General align with Dollar General’s continuing growth across the United States.

Dan MacDonald, senior director of corporate communications for Dollar General, told Lake County News that the company plans to open 1,000 new stores nationwide over the 2017 calendar year, and remodel or relocate another 900 stores.

That expansion will create more than 10,000 jobs this year – between stores and distribution centers, MacDonald said.

In a 2015 interview, MacDonald had said that the company planned to place 100 new stores in California over the coming three years. In response to questions for this article, however, he said he could not disclose current store growth plans for California.

On March 16, the company released its fourth quarter and financial results for 2016, which showed net sales increases for the fourth quarter of 13.7 percent, which totaled $6 billion compared to $5.3 billion in the 2015 fourth quarter.

The company’s financials also showed a 7.9-percent net sales increase for the year, rising to $22 billion compared to net sales of $20.4 billion in 2015, and a net income of $1.25 billion for fiscal year 2016 compared to net income of $1.17 billion for fiscal year 2015.

“We are pleased with our fourth quarter 2016 financial results, and believe that during the quarter many of our initiatives continued to gain traction,” said Dollar General Chief Executive Officer Todd Vasos, who added that the company effectively managed “what proved to be a challenging retail environment” to deliver increased sales and earnings.

In addition to its plans to open another 1,000 new stores this year, the report stated that Dollar General had opened 900 new stores in 2016 and remodeled or relocated 906 stores. Improvements, upgrades, remodels and relocations of existing stores totaled $168 million in 2016, with $120 million for new leased stores, primarily for leasehold improvements, and $38 million for stores purchased or built by the company.

In the year ahead, Vasos said the company plans to make “significant investments, primarily in compensation and training for our store managers given the critical role this position plays in our customer experience, as well as strategic initiatives. While these investments are expected to put pressure on our 2017 earnings, we believe they will strengthen our market share position over time and are positive steps to further support sustainable growth for our shareholders over the long term.”

MacDonald said Dollar General has more than 13,300 stores in small towns across 44 states. The vast majority of stores are in communities of under 20,000 people. He said the store is part of small town America’s fabric.

“We sell America's most trusted brands,” at everyday low prices, he said. “We’re very passionate about serving the underserved.”

He added, “We’re investing in small towns at a time when many others are not,” and in so doing creating jobs in construction along with full- and part-time employment at the stores.

In some parts of the country, Dollar General has been using a reduced-size store model, but MacDonald said that “metro format” is for urban areas, not Northern California.

The metro format, with a total of 7,500 square feet – of which about 6,000 square feet – is for areas where real estate costs are higher and property availability is different. It also caters to a different kind of shopper that doesn’t need as broad a selection. MacDonald said 160 of those stores are being built.

They also are testing an even smaller format called the DGX, which has a total footprint of 5,000 square feet, of which 4,000 square feet is sales floor. MacDonald said some of those test stores have been built in Nashville and in Raleigh, North Carolina.

As for Lake County’s existing Dollar General stores, MacDonald said he couldn’t provide specific sales numbers.

“The stores are performing well and that they've been well received by the community,” he said. “We’ve developed a pretty loyal customer following at both stores.”

Regarding plans for stores in other parts of the county, MacDonald said the company has the sites in Kelseyville, Lakeport, Lucerne and Middletown all listed as being in the “due diligence” process.

He said that due diligence process ends when all final approvals – internally and externally – are done and construction is ready to start.

MacDonald called Dollar General stores “small, neighborhood stores” that are based around convenience, placed close to where customers live and tailored to communities.

“We’re in the household essentials business, basically,” he said, explaining that the typical Dollar General customer is in and out of the store in under 10 minutes and spends an average of $14, he said.

He said the goal is to be five miles or a 10-minute drive from customer base. Analytics are used to decide ideal locations based on factors including need, population and lack of shopping options.

MacDonald called the Dollar General team “exceptional” at using those analytics to put stores where there is a viable customer base. “They’ve been so successful at opening stores that are doing well,” he said, particularly in California.

As for the impact on small businesses, MacDonald said there are many thriving locally owned small businesses in the communities that they serve. “Competition is certainly good for the consumer.”

He said that people are thrilled that they’re in the communities they are, and he said they often get requests from local officials – as in one case from an official in northern Alabama – asking for stores to come to a community. That’s especially common in the southeast, where they’re part of the culture.

“People are looking for convenience and they’re looking for everyday low prices. That’s really the value proposition we bring to communities,” he said.

Other potential new Lake County sites explored

As Cross Development continues to battle to get the Middletown and Kelseyville stores off the ground, it’s also looking at other potential locations around the county.

In January, Cross Development submitted documents seeking a preapplication review for a store site at 5905 E. Highway 20 in Lucerne.

That site is located on the lakeshore on a property that sits on the alluvial fan for Morrison Creek and is bounded by the creek itself. The property is owned by a company called Playtime U.S.A., based in Surrey, British Columbia.

The newly formed Middle Region Town Hall, or MRTH, group, which represents the Lucerne area, met on Feb. 17 to discuss the plan and came out against that specific site, concluding it was not a good location for the store.

That conclusion came ahead of a preapplication meeting was held on Feb. 22 with various agencies to discuss the plan.

Supervisor Jim Steele told Lake County News that he sent a letter MRTH developed regarding its concerns about Cross Development’s proposed location, but hadn’t heard anything back.

Similarly, County Planner Mireya Turner said Cross Development has not been in contact with the county since February on the Lucerne site.

In Clearlake, home to an expanding Walmart store, City Manager Greg Folsom said that, so far, he’s not aware of any contact being made with the city over locating a Dollar General there.

“I would not be surprised if they were looking, however,” Folsom said.

In Lakeport, Community Development Director Kevin Ingram said city planning officials have been speaking over the past several months with Cross Development about the possible location of a store there.

Ingram said Cross Development and city planning staff held a preapplication meeting some months ago regarding a property located at 1405 S. Main St., at the intersection of Kimberley Lane and S. Main Street, just south of the Shoreline Shopping Center.

During the last week of March, Cross Development submitted an application for architectural and design review for that location to the city, Ingram said.

He said Community Development staffers are now circulating the project for review prior to scheduling it for a public hearing before the Lakeport Planning Commission.

There also remain issues with one of the existing Dollar General stores on the Northshore.

A March 17 letter sent by County Planner Michalyn DelValle to PLS Holdings Inc. of Roslyn, New York, which owns the property where the Clearlake Oaks store is located at 13090 E. State Highway 20, said that based on a March 6 compliance monitoring inspection, there are several conditions of the store’s major use permit that are out of compliance.

The areas of noncompliance listed in the letter include not installing landscaping in approved areas, not keeping the site free of weeds and litter, no recorded dedication for a 20-foot public access easement from the stop of the Schindler Creek bank to the county of Lake, no installation of a required bike rack and no area for shopping cart storage.

DelValle’s letter said that a reinspection is planned 60 days from the date of the letter, and if the corrections haven’t been made, “revocation of your Use Permit may be initiated.”

Last week, DelValle told Lake County News that she received an email from the company indicating that it would comply with the conditions. However, she said she has not yet conducted a site visit because she requested that they comply within 60 days, or by  mid-May.

Asked if Dollar General tracks code and planning compliance issues for its store sites, MacDonald said, “Our developer-partners build our stores to meet the building codes and standards established by the local community. It is important the they are in compliance to receive the major use permit, but I don’t expect that to be a problem.”

Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. . Follow her on Twitter, @ERLarson, or Lake County News, @LakeCoNews.