WALNUT CREEK -- It really did take an act of Congress for Walnut Creek's premier shopping destination to move forward with plans for a major expansion.
A week after the government shutdown ended, Congress passed the Water Resources Reform and Development Act of 2013, which included a few key sentences that transferred a 4-mile portion of Walnut Creek from federal control to local control. This was necessary before Macerich, owner of Broadway Plaza, could expand up to nearly 300,000 square feet.
"I have been working, doing development for years, and I have never had to have an act of Congress to build a project," said Garrett Newland, vice president of development for Macerich.
The City Council still has to approve the long-range plan at its meeting in December, but Congress' action is a big step forward. The expansion will disrupt business at the 60-year-old center, as many store owners will be forced to set up shop somewhere else or close down altogether.
The plan includes demolishing and rebuilding the parking garages on South Broadway, expansion of the Macy's store, and the face-lift, remodel or expansion of many existing stores. Later plans include construction of a new two- or three-story building on the west side of Broadway Plaza, in the current men's Macy's location.
Macerich hopes to ink a development agreement with the city that would give it 20 years to implement the long-range master plan in exchange for up to $5 million.
Eugene McGrane, a broker with Cushman & Wakefield, says Macerich going through Congress to get the expansion done is a big deal for downtown.
"It shows their belief in Walnut Creek as a long-term retail capital of the East Bay," he said. "And that they will continue to be an ongoing presence and significant driver of the economy in the Bay Area."
The first area set for reconstruction will be the 100 or so shops between Macy's and Nordstrom. In the last six months the construction timeline has become clear and those shops have to be empty by early next year, Newland said.
The tenants "are the lifeblood of our project," he said. "Those facilities are being torn down, some tenants like Banana Republic are moving across the street, some will close or move to other locations in downtown, and some are going stay closed until we reopen in 2015-16."
Stores such as The Walking Company, Cole Haan and Bath & Body Works have already closed. Others are moving around to different locations within the center, and some will leave altogether, such as jeweler Davidson and Licht. The jeweler is building a new store on Main Street.
Some of the smaller stores may not end up in the redeveloped center because their spaces were built in the 1960s and are too small, Newland said. But this is not an attempt to make Broadway Plaza a luxury retail center, he said.
"It's an opportunity to bring in an amount of luxury retail we can't offer today," he said. "But in addition there is more juniors, children's (stores) and restaurants that we can't offer space to today, and this will allow us to do that."
With the downtown rental vacancy rate as low as 3 percent, it's hard for some stores to find a new place to set up shop. One example is gourmet popcorn shop Cornology, located in Broadway Plaza. The store has been looking to get a Chase Bank Mission Main Street grant to help them relocate, according to its website.
Some hope the expansion and the necessity for smaller tenants to find new spaces will be good for the area known as the traditional downtown, north of Mt. Diablo Boulevard.
Already some national retailers have moved into the area such as Anthropologie, Brandy Melville and Joseph A. The traditional downtown will remain primarily composed of smaller independent businesses, but an influx of some national retailers will help drive more foot traffic into the area, which is a good thing, said Brian Hirahara of Walnut Creek Downtown Business Association.
"Since rents are generally lower in the traditional downtown than in Broadway Plaza, this area is a viable alternative for smaller merchants that no longer fit into Broadway Plaza's expansion plans," he said.
If passed by the City Council, construction at Broadway Plaza could begin by February.
Contact Elisabeth Nardi at 925-952-2617. Follow her at Twitter.com/enardi10.