ALAMEDA -- Walgreens could open next door to the Marketplace on Park Street as early as this spring if construction goes as planned, those behind the project say.
City and business leaders gathered Monday to break ground for the pharmacy, which will be the city's third Walgreens. A second building is also planned for the site, which is now a vacant field and was once the home of Good Chevrolet.
"It's going to be beautiful with mixed use," Mayor Marie Gilmore said before she and representatives of Foley Street Investments LLC donned hard hats, picked up shovels and ceremoniously dug into the earth.
The developers are calling the project "Alameda Station," a hat-tip to the fact that a train station was located nearby during the nineteenth century.
The building that will accommodate Walgreens will measure 16,778 square feet, while the second building will be 7,788 square feet. The Marketplace measures 19,430 square feet.
The new buildings will front Park Street and will share an 85-spot parking lot with the Marketplace.
"It's going to harmonize both visually and functionally with the Marketplace," Gilmore said.
The goal is to open the pharmacy in May, said Chris Seiwald, one of the developers.
No business has committed to occupying the second building, but those behind the project are aiming to secure a bank, Seiwald said.
"That's what we would prefer to go in," he said. "But no papers have been signed yet."
City officials consider the location a "gateway" for the Island because of its proximity to Interstate 880 and the Fruitvale and Park Street bridges.
"This is really the first step in the work to transform the Park Street neighborhood north of Lincoln Avenue," said Robb Ratto of the Park Street Business Association. "We expect it will be a catalyst for other projects in the area."
Construction of the pharmacy comes as the Bay Area is enjoying a surge of retail expansion, evidence that the recession's sluggish economy is on the rebound.
Developers such as Foley Street Investments are building retail projects at a brisk clip, demand for retail space has jumped and vacancy rates have dwindled, plus merchants are scouting for sites to open stores, according to realty experts who track the retail sector.
"This is definitely the strongest market for retail in the Bay Area since the downturn, no question about that," said Garrick Brown, director of research with Terranomics, a realty brokerage that specializes in retail properties and tenants. "There is a lot of demand all over the Bay Area for retail space."
In June, the nine-county Bay Area had about 1.3 million square feet of retail sites in the pipeline -- defined as actually under construction or about to launch construction -- according to Terranomics. That's up from 1.1 million in mid-2012 and well ahead of the 150,000 square feet in the retail pipeline in mid-2009, which was the year after the worst of the financial crisis of 2008, Terranomics experts said.
"We are leasing everything we can touch," said David Taxin, a partner with Meacham/Oppenheimer, a commercial realty brokerage. "I've been doing this for a long time and this is definitely the strongest demand by retailers in years."
In the East Bay, the biggest retail projects under construction include the 140,000 square-foot Target store at Alameda Landing, the mix of retail and homes planned for 77 acres near College of Alameda and the Oakland-Alameda Estuary.
The store will measure about 140,000 square feet and employ about 200 workers. It's set to open Oct. 9.
Target also has been active with store openings in San Jose and San Francisco.
"The Bay Area is a region Target has an eye on," said Matias Cavallin, a Target spokesman. "The economy here is really allowing us to gear up for more store openings."
Alameda City Manager John Russo said projects such as those at Alameda Station and Alameda Landing show that people want to invest in the city.
"All of these kind of projects take lots and lots of work," Russo said. "It isn't easy. But I think it's a sign that Alameda is finally waking up from its long slumber."