Loyal customers may be left in the lurch, but the planned closure of Mervyns this fall should boost city and private sector efforts to redevelop downtown north of First Street with new stores, housing and parking.

Mervyns is leaving at a time when the city is promoting multi-story, mixed-use development in the area. Private developers see opportunities as downtown redefines itself as a place where dining, wine tasting, specialty shopping and cultural attractions take center stage.

Housing, which has been missing from downtown for a half century, could return, made possible by the flood control project which will soon protect the area from inundation.

City-sponsored urban renewal remade the area in the 1970s and ‘80s, creating the Mervyns complex and Napa Town Center, the developments that define the retail heart of downtown today.

With Mervyns’ pullout, downtown’s largest retail space can now be considered a blank slate for new uses that better fit the downtown of the 21st century, developers say.

A equally large redevelopment opportunity is taking shape along Pearl Street at the Cinedome theater. With the movie house expected to move to south Napa within three years, the city and the owner of the Cinedome site, Syufy Enterprises, are talking about a coordinated development involving stores, offices, housing and a parking garage, said Robin Klingbeil, a city economic development analyst.

The project may include the theater site, parking lots on both sides of West Street and the Napa Sanitation District block bounded by Pearl, Yajome, Clinton and West streets, she said.

In July, Napa Sanitation District declared its 1.25-acre property surplus and made it available for purchase, said Michael Abramson, the district’s general manager. The pump station in the center of the block was recently replaced with a siphon under the Napa River.

The city is the most likely buyer, Klingbeil said, wrapping the property into a development with Syufy, while looking for another home for the city’s skate park, which is next to the pump station.

Relocation of the Cinedome to Gasser Foundation land behind the south Napa Target has been talked about for years, but it may now be about to happen, said Joe Peatman, foundation president. The federal government is about to alter its flood maps so the theater site is out of the Napa River floodway, which would allow construction to begin as soon as next year, he said.

The federal flood project is boosting plans to mix housing in with stores and restaurants in downtown. Within a few years, the area will be carved up with a river bypass channel. Napa Creek will gain flood terraces and underground culverts will be installed along the creek, providing flood protection essential for housing, Klingbeil said.

The public will have a voice in shaping this wave of downtown change, Klingbeil said. The city will be preparing a Downtown Specific Plan, a first-of-its-kind planning document, to decide land uses, building heights, densities and where the parking should be, she said.

As planning occurs during 2009 and the first half of 2010, the public will be asked to weigh in on what it wants to see happen, Klingbeil said.

Ready to raze

Change is coming, but it won’t occur overnight, said Keith Rogal, the local developer who with partners KLA Main wrapped up purchase of the 88,000-square-foot Mervyns complex only last month.

The new owners, who will have a 75,000-square-foot hole to fill when Mervyns shuts down within three months, are more than willing to raze the Mervyns building and start over.

In many ways, the Mervyns building was a planning blunder, Rogal said. It reflected urban design thinking of the 70s that has since been discredited, he said.

The store is hidden behind a wall of parking lots, which cheapens the streetscape, Rogal said. Equally bad, the city’s earlier redevelopment efforts destroyed downtown’s grid street system, making it hard for shoppers to get around, he said.

“It was a redevelopment-era approach that does a disservice to downtown,” Rogal said. “The physical configuration of that property, to me, hurts downtown.”

Rogal said he was surprised that Mervyns, which had a lease running through 2016, is pulling out. He would have explored moving Mervyns to another location, but “it didn’t occur to me that Mervyns would say ‘we’re done.’”

Rogal would like to mix residential and commercial, with parking underground or in a structure. Buildings should be close to the street, not hidden behind a “sea of parking,” he said.

Napa Creek, which cuts through the property in an “overgrown” condition, is a “huge negative” that needs improving, Rogal said.

Citing Register bloggers who commented on the recent Mervyns closure story,  Rogal said it was clear that residents don’t want a “tourist zone” to replace the departing family department store.

Any reuse plan should strike the right balance, appealing to locals and tourists, Rogal said, much like the Boon Fly Cafe at the Carneros Inn on Highway 12 which he developed.

Eighty-five percent of Boon Fly’s business is local, yet tourists “absolutely love it,” he said.

The Napa County Transportation and Planning Agency is planning to move the transit center north of Mervyns within two to three years, removing an obstacle to Rogal redeveloping north to Pearl Street.

Transit services would move to Burnell Street, next to Napa Valley Exposition, if a site purchase can be completed with Bell Products.

Nearly a half dozen small businesses are part of the Mervyns complex, including First Squeeze Cafe and Tres Hermanos taqueria. They all have shorter leases than Mervyns, and will be invited to be part of the planning process, Rogal said.

Tyler Anderson, owner of First Squeeze, said he embraces the changes to come. “If there is a silver lining to bad news for Mervyns, it’s an opportunity for a well-respected developer to come in and change the face of Napa,” he said.

The Mervyns building is “under-developed and poorly developed,” with dead zones, blind spots and kid hangouts, he said. “There’s not a lot of character there,” he said. “This is an opportunity to get some character in Napa.”

If redevelopment meant that he had to move his business a block or two, he would be willing to, Anderson said.

A catalyst?

Harry Price, a downtown developer who created Napa Mill and has an office-retail project, Napa Square, under construction on First Street, said good things could come from Mervyns’ closure.

“I think Keith’s project will ensure that retail comes back to Napa in a bigger way,” Price said.

If Rogal redevelops on a larger scale with housing above shopping, that would be in keeping with how downtown was from its birth in the 19th century until redevelopment in the 70s, Price said.

While downtown is undergoing a building boom involving a half dozen hotels and commercial buildings, this surge could play out in a year or two, Price said.

“Keith brings capital investment and he has a record of classy projects,” Price said. “Rogal may keep the momentum going.”

Scot Hunter, a managing partner with the Wiseman Company which owns two commercial buildings downtown, thinks the remaking of downtown will continue.

The city’s recent approval of a Ritz-Carlton resort at First Street and Silverado Trail should be a catalyst for more private investment, including Rogal’s project, Hunter said.

“Especially with the Ritz-Carlton coming in, the whole downtown is ripe for redevelopment,” said Hunter, whose company owns an office building at First and Main and the recently completed three-story Main Street West at First and Clinton.

Hunter doesn’t rule out reuse of the Mervyns building. “It costs a lot of money to take a building down. Is there a reuse? Is there another retailer who would like to come in?”

His own company has eyes on acquiring the acre next to Main Street West that includes Napa Valley Traditions, Kelley’s No Bad Days Cafe, Taqueria Rosita and 22 low-income apartments for a mixed-use development.

“It certainly is of interest to us, no question about it,” Hunter said. His company remains in contact with the owner, Nate Lazarus, in case the property is put up for sale, he said.

The city tried to buy the property two years ago in an effort to jump-start a mixed-use development in the area, but negotiations with Lazarus weren’t successful.

Multi-story development made sense on this property as well as across Main Street on surface parking lots owned by the city’s redevelopment agency, city officials explained at the time.

The Wiseman Company has leased two spaces at Main Street West for restaurants, but attracting retail has been harder, Hunter said. More retail on the Mervyns site could make the area more attractive to stores, he said.

Greg Cole, who owns two restaurants on Main Street, said downtown has a “disproportionate” amount of restaurants and wine-tasting venues compared to stores that sell things that people need in their everyday lives.

If Mervyns wasn’t making it, perhaps Rogal can rework the site to bring in stores that better fit today’s shopper needs, said Cole, who admitted that he wasn’t shopping Mervyns often in recent years.

Jeff Doran, a downtown developer, said he had faith that Rogal, who is also trying to redevelop the Napa Pipe property south of town with a large residential neighborhood/business park, would craft a retail plan that makes Napans happy. “I think he’s a visionary,” he said.

Doran said he is so bullish on Rogal that he would be happy if he also bought Napa Town Center and redeveloped the two centers as one. Napa Town Center is another downtown property not living up to its potential, he said.

George Altamura, owner of Napa Town Center and several adjoining properties including the Gordon and Merrills buildings, said he had his own redevelopment plan for the eastern half of Napa Town Center involving condominiums above stores.

He floated this idea before the City Council more than a year ago, then decided that the economic times weren’t right, he said.

Altamura tipped his hat to Rogal for superb timing in buying the Mervyns complex. He had also tried to buy it, but Mervyns was locked into a low-rent lease that made the asking price unworkable, he said.

“We’d have bought it if we could have gotten Mervyns out of there,” Altamura said.

In theory, Mervyns redevelopment could tie into Napa Town Center, but that’s all speculation, Altamura said.

For now, he has his own plans and he’s biding his time until the downtown economy improves and the market for condos is proven, Altamura said. Downtown is “still in the hurting stage right now,” he said.