Internal Affairs: Nob Hill and ROIC butt heads at meeting over vacant San Jose store

SAN JOSE — After a major grocery chain closed in San Jose but renewed the lease on its empty building, the retailer and its landlord appeared to point fingers and refused to be in the same room.

That ended Thursday night when the two sides — Raley’s, the owner of Nob Hill, and its landlord Retail Opportunity Investments Corp. — came together to discuss the dispute. And it didn’t take long for things to get heated as nearly 100 angry residents demanded answers.

Nob Hill closed its store at 7076 Santa Teresa Boulevard two years ago. Despite the closure, the grocer renewed its lease until 2021 — but it declined to open another grocery store there. The dark building began attracting blight, graffiti, trash and rodents.

ROIC representatives said Wednesday they can’t kick Nob Hill out because there’s no cause for terminating the lease. Nob Hill officials said they extended the lease to build a distribution hub there — that plan didn’t work out — but maintaining the lease was a “business decision.”

That angered neighbors who said the company is holding them hostage. “I will not shop at your store if you don’t resolve this,” said Steve Nelson who’s lived in the area nearly 30 years.

Nob Hill spokeswoman Chelsea Minor responded that residents “had a right to feel that way.”

In an unexpected move, ROIC’s Amber Wright handed Minor a lease termination agreement at the meeting — urging her to sign to resolve the issue. Minor declined, later telling IA that it isn’t her job and she doesn’t have the “legal authority to do that.”

“We just want the space back,” Wright said. “We want to do what’s right for the community.”

Minor countered: “It’s still a very complicated issue. I don’t think I have a silver bullet, but it’s good to hear community feedback.”

Minor said Nob Hill is considering opening a “Nob Hill Express” at the vacant site. The 5,000 square-foot mini store would be the first of its kind in the country. Most residents seemed open to the idea — and felt some progress was made Thursday night.

Councilman Sergio Jimenez told the crowd he’ll do what it takes to resolve the dispute, and he’s exploring city legislation to prohibit retailers from keeping leases on empty stores.

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