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Safeway blazing through Vegas

By Jonathan O'Connell

LAS VEGAS -- Safeway drew a lot of oohs and aahs recently because of the serious glitziness the company put into opening their newly remodeled Georgetown store, and the Pleasanton, Calif. company is laying the groundwork for many more announcements in the Washington area.

In an interview at the International Council of Shopping Center's convention here, Timothy Baker, eastern division vice president of real estate, said the grocer opened two new or remodeled stores in D.C. this year, plans a third for Falls Church in September and is looking aggressively to do more. Baker rattled off nearly a half dozen sites he is looking at.

“We’re trying to accelerate that new store growth, whether that be at Tenley, or at Square 54, or at Petworth or at Howard University town center or in Fort Totten. The time is now. We want to get all of our stores remodeled or replaced,” he said.

How can Safeway be so aggressive? The company is leveraging its cash and using it to take advantage of the down real estate market with its own, wholly owned real estate company called Property Development Centers, of which Donald P. Wright is chief executive (he is also senior vice president of real estate and engineering for Safeway).

With PDC, Safeway looks to develop and own mixed-use projects featuring Safeway anchors. In Wheaton, for example, Wright and Baker plan a 20-story housing-retail development and they plan other Safeway-owned projects in Olney and Bethesda. “We are not in a position right now where we need capital to do that, so it’s about the opportunities,” Wright said.

D.C. Mayor Adrian Fenty would like to see a mixed-use project replace the aging Petworth Safeway, on Georgia Avenue Northwest, something Safeway has been and continues to consider.

There are still likely to be some store closures – a lease is set to expire shortly at the company’s 20th Street NW location near Dupont Circle – but they won’t keep pace with the openings, and that’s thanks to the strength of the local market.

“We’re as active in the D.C. market as we are anywhere in the country right now,” Wright said.

By Dan Beyers  |  May 25, 2010; 10:03 AM ET
 
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