CLEARLAKE – Is Home Depot coming to Clearlake?
It's a question that's been asked for some time. Speculation around the home improvement giant's possible plans to land in Clearlake have been in the community for years, according to some local businesses.
However, earlier this year Home Depot appeared to have been seriously considering a store in Clearlake at the site of the city's airport property, although those plans may now be on hold.
Whether or not Home Depot ever comes to Clearlake, the possibility has emphasized the deep divisions of opinion among local officials and businesses over “big box” retail stores.
At the same time, the resulting discussion reveals major disagreements about the best approaches that the city – and the county at large – can take in developing in order to meet the needs of residents while supporting and encouraging local, existing businesses.
A report obtained by Lake County News lays out some possible plans – including a Home Depot – for Clearlake's 26-acre Pierce Field airport property, located on the west side of Highway 53 near the now-closed Outrageous Waters park.
Lake County Special Districts contracted with CH2MHILL to prepare the report on behalf of Home Depot Development and the Clearlake Redevelopment Agency.
The report, dated July 21, looks specifically at the airport property and what would be required to hook it into the south county's sewer system. It also considers potential impacts for a proposed Starbucks, Walgreens and the recently opened Carl's Jr.
The proposed construction considered by the report includes a Home Depot and several other businesses to be constructed in phases on the land, which would require sewer service for the equivalent of 142 single-family dwelling hookups.
The proposed first phase includes a Home Depot, three fast food restaurants and one sitdown restaurant. A supermarket would be built in phase two, and phase three is proposed to include 10,000 square feet of retail shops, a junior department store – defined variously as either a small department store offering a limited selection of goods or a scaled-down version of a regular department store – two more fast food restaurants and another sitdown restaurant.
Mark Dellinger, administrator of Lake County Special Districts, said the report cost $53,000 to complete, and Home Depot paid approximately $30,000 of that cost.
Such capacity studies and hydraulic models are common when large developments are proposed, with the developers paying to cover them, said Dellinger.
Understanding the potential load on the system is critical, especially in the south county, which Dellinger said is under directives by the Central Valley Regional Water Quality Control Board due to past system failings.
“The regional board is watching very closely with what is going on in the system,” Dellinger said.
When the study was completed in July, Dellinger said he understood that Home Depot was still planning to move forward with constructing a store in Clearlake.
However, during a meeting in August that included county and city officials and developer representatives, Dellinger reported that Clearlake City Administrator Dale Neiman told the group that the project was on hold.
Dellinger believed the issue was a result of the economic conditions, and added that he didn't believe the project had gone away entirely.
City continues airport property negotiations
Since April 2007, the city of Clearlake has been in an exclusive negotiating agreement with Katz Kirkpatrick Properties of Roseville – a company that develops shopping centers around Northern California – regarding the airport property.
Katz Kirkpatrick's major tenants include supermarkets such as Albertson's, Raley's and Safeway, and stores including Target, Wal-Mart and Shopko, among others.
Neiman, who is the city's lead negotiator for the property, said he can't reveal the specifics of the negotiations, because they're confidential.
Indeed, the discussions about the agreement that Neiman has held with the Clearlake City Council have been largely confined to closed sessions. The performance deadlines also have been adjusted and lengthened several times.
The end of the confidential portion of the negotiations may soon be over, said Neiman. “We're at the end of the process.”
The city is now working on the final parts of the disposition and development agreement, with he expects will go before the council soon. However, Neiman admits he has believed it would have gone to the council by now but has been delayed.
The proposed sale of the property to Katz Kirkpatrick will be a public matter, said Neiman. He had anticipated it being completed by year's end, but negotiations are still ongoing.
The exclusive negotiating agreement covers the property's entire 26 acres, said Neiman, who added that he can't disclose just how much of the property is involved with the proposed project.
He said that he received permission to remove two acres located at the bottom of the runway, which will be used by the city for residential development for first-time homebuyers.
The city also may not end up selling the developer the property, but may instead lease it, said Neiman.
The disposition and development agreement has some additional aspects that go beyond a mere purchase agreement, said Neiman. That includes the city's ability to impose specifics requiring certain types of businesses that may be built on the site.
Just what those requirements will be have yet to be determined, said Neiman.
That will be the purpose of the public hearing, said Neiman – for the council to hear what he public and city staff has to say about potential requirements, and to make a decision based on that input.
The details of the airport property development as outlined in the Special Districts report aren't certain, said Neiman. “We don't know what the project is until the negotiations are completed.”
What may eventually be built on the land spins on a number of factors, said Neiman – from land and development costs to economic conditions.
Neiman said the city provided to Special Districts “information that basically showed what was possible out there.”
He added, “If all that happens, basically what will be created is a regional shopping center.”
For Home Depot's part, the corporation has been responding to economic changes by tightening its belt.
“As you know, deals like this are always changing, our plans change, the business landscape changes; no one factor is to blame,” said Kathryn Gallagher, spokesperson for Home Depot's Western Division.
“As announced earlier this year, we have reduced our store openings as we focus on investments in our existing stores and operations,” Gallagher said. “By continuing our investment in our existing stores, we will be in a very strong position once the current business climate recovers. We continue to look for new opportunities to bring our business to different areas of Clear Lake.”
For this third quarter results, reported in November, the world's largest home improvement retailer reported consolidated net earnings of $756 million, or $0.45 per diluted share. That's down from the $1.1 billion and $0.60 per diluted share reported for the third quarter of 2007.
Home Depot reported that its third quarter sales totaled $17.8 billion, down 6.2 percent from the same period the year before.
Tomorrow: City and county officials debate the benefits of big box stores, and raise issues over regional impacts.
E-mail Elizabeth Larson at
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