Archives for August 2006

Ground Broken on Largest Retail Center in Morgan Hill’s History

 Borelli Investment Company brokers challenging land transaction involving
three parcels near
Cochrane Road and Highway 101

San Jose, Calif., August 14, 2006 — Following the successful completion of 2 1/2 years of negotiations to assemble 66 acres of land in Morgan Hill, ground has been broken on Miramonte Center, a 660,000 square foot complex that will be the largest shopping center in the city’s history. The upscale “lifestyle” center located on Cochrane Road on the east side of Highway 101 will be anchored by Target and complemented by a wide variety of other retail establishments and restaurants—all connected by pedestrian features such as tree-lined walkways and courtyards.

“We wanted to bring theSouthValleysomething unique—unlike large indoor malls and typical shopping center,” said John B. DiNapoli, vice president of JP DiNapoli Companies, Inc., co-developers of the complex with Browman Development Company. “MiramonteCenteroffersSouthValleyresidents a shopping experience they won’t find anywhere else.”

Putting the Parcels Together

Before ground could be broken onMiramonteCenter, years of behind-the-scenes spadework was required to put the various parcels together to create a large enough piece of land to develop. While the formal negotiations leading to the assembly of the 66-acre parcel took 2 1/2 years, a number of other attempts to do something with the land had been made over the years.

“One parcel had been owned by the prominent Morgan Hill Guglielmo winemaking family for more than 80 years,” said Ralph Borelli, CEO of Borelli Investment Company. “Brokers had unsuccessfully talked to the Guglielmo’s about office and residential developments in the past. Another parcel had multiple owners with varying interests and concerns. Finding the right terms to ensure the transaction was acceptable to all the landowners and the developers, and would also meet the city’s general plan provisions, was not easy.”

One advantage that Borelli Investment Company had was its long history in theSanta ClaraValleycommercial real estate market. Started by Ralph’s father Nelo, Borelli Investment is in its 51st year of serving the Valley. The mutual trust established between Ralph and the Guglielmo family served as a cornerstone for building an agreement that everyone was satisfied with.

In addition, Borelli Investment Company has considerable experience working on complicated transactions involving negotiations with other brokers, joint venture partners, zoning and entitlement issues, Environmental Impact Reports (EIRs), and long timeframes.

“Very few land transactions in theSanta ClaraValleyare simple,” Borelli commented. “Our firm has extensive experience handling complex transactions, some of which have taken a decade or more to complete. We actually enjoy the challenges, especially when they lead to a development that is as exciting asMiramonteCenter.”

Contemporary Design

MiramonteCenterfeatures a contemporary, art deco design that should be extremely well received. The buildings will be very colorful, washed in bright earth tones that fit well with the surrounding hills and valley floor. Shoppers will enter offCochrane Roadby driving up a main boulevard that runs between the buildings, which will also be connected by pedestrian walkways linking courtyard-like gathering places.

In addition to the Super Target anchor store, the developers expect to sign one other “big box” anchor and a wide selection of specialty stores.

MiramonteCenteris projected to have a $100 million value at build-out. The center should open in the summer of 2007, barring complications. In addition to developers JP DiNapoli Companies, Inc. and Browman Development Company, the Guglielmo Family Partnership and Morgan Hill Ventures I, LP are acting as joint venture partners. Devcon will be the general contractor for the project.

“Morgan Hillhas needed its own high-profile, lifestyle center for many years,” noted Borelli. “We were pleased to be able to play an important role in helping to make this possible.”

Celebrating more than 50 years in business in the Santa Clara Valley, Borelli Investment Company is one of the oldest commercial real estate firms in Northern California. The company provides a full range of commercial real estate services—from development and construction management to land sales and consulting for sales and leasing. More information about Borelli Investment Company’s services may be obtained by calling (408) 453-4700 or visiting www.borelli.com.

Contact:
Ralph Borelli, CEO
Borelli Investment Company
1770 Technology Dr.
San Jose, CA 95110
Ph: 408.453.4700
Fax: 408.453.4636
E-mail: ralph@borelli.com
http://www.borelli.com

Ground Broken on Largest Retail Center in Morgan Hill’s History

Borelli Investment Company brokers challenging land transaction involving three parcels near Cochrane Road and Highway 101

San Jose, Calif., August 14, 2006 — Following the successful completion of 2 1/2 years of negotiations to assemble 66 acres of land in Morgan Hill, ground has been broken on Miramonte Center, a 660,000 square foot complex that will be the largest shopping center in the city’s history. The upscale “lifestyle” center located on Cochrane Road on the east side of Highway 101 will be anchored by Target and complemented by a wide variety of other retail establishments and restaurants—all connected by pedestrian features such as tree-lined walkways and courtyards.

“We wanted to bring the South Valley something unique—unlike large indoor malls and typical shopping center,” said John B. DiNapoli, vice president of JP DiNapoli Companies, Inc., co-developers of the complex with Browman Development Company. “Miramonte Center offers South Valley residents a shopping experience they won’t find anywhere else.”

Putting the Parcels Together

Before ground could be broken on Miramonte Center, years of behind-the-scenes spadework was required to put the various parcels together to create a large enough piece of land to develop. While the formal negotiations leading to the assembly of the 66-acre parcel took 2 1/2 years, a number of other attempts to do something with the land had been made over the years.

“One parcel had been owned by the prominent Morgan Hill Guglielmo winemaking family for more than 80 years,” said Ralph Borelli, CEO of Borelli Investment Company. “Brokers had unsuccessfully talked to the Guglielmo’s about office and residential developments in the past. Another parcel had multiple owners with varying interests and concerns. Finding the right terms to ensure the transaction was acceptable to all the landowners and the developers, and would also meet the city’s general plan provisions, was not easy.”

One advantage that Borelli Investment Company had was its long history in the Santa Clara Valley commercial real estate market. Started by Ralph’s father Nelo, Borelli Investment is in its 51st year of serving the Valley. The mutual trust established between Ralph and the Guglielmo family served as a cornerstone for building an agreement that everyone was satisfied with.

In addition, Borelli Investment Company has considerable experience working on complicated transactions involving negotiations with other brokers, joint venture partners, zoning and entitlement issues, Environmental Impact Reports (EIRs), and long timeframes.

“Very few land transactions in the Santa Clara Valley are simple,” Borelli commented. “Our firm has extensive experience handling complex transactions, some of which have taken a decade or more to complete. We actually enjoy the challenges, especially when they lead to a development that is as exciting as Miramonte Center.”

Contemporary Design

Miramonte Center features a contemporary, art deco design that should be extremely well received. The buildings will be very colorful, washed in bright earth tones that fit well with the surrounding hills and valley floor. Shoppers will enter off Cochrane Road by driving up a main boulevard that runs between the buildings, which will also be connected by pedestrian walkways linking courtyard-like gathering places.

In addition to the Super Target anchor store, the developers expect to sign one other “big box” anchor and a wide selection of specialty stores.

Miramonte Center is projected to have a $100 million value at build-out. The center should open in the summer of 2007, barring complications. In addition to developers JP DiNapoli Companies, Inc. and Browman Development Company, the Guglielmo Family Partnership and Morgan Hill Ventures I, LP are acting as joint venture partners. Devcon will be the general contractor for the project.

“Morgan Hill has needed its own high-profile, lifestyle center for many years,” noted Borelli. “We were pleased to be able to play an important role in helping to make this possible.”

Celebrating more than 50 years in business in the Santa Clara Valley, Borelli Investment Company is one of the oldest commercial real estate firms in Northern California. The company provides a full range of commercial real estate services—from development and construction management to land sales and consulting for sales and leasing. More information about Borelli Investment Company’s services may be obtained by calling (408) 453-4700 or visiting www.borelli.com.

Contact: Ralph Borelli, CEO Borelli Investment Company 1770 Technology Dr. San Jose, CA 95110 Ph: 408.453.4700 Fax: 408.453.4636 E-mail: ralph@borelli.com http://www.borelli.com

Ralph Borelli – Real Estate Baron Started Out Cutting ‘Cots Built Up Company Inherited by his Immigrant Father

By Katherine Conrad, San Jose Mercury News,August 13, 2006Commercial real estate dealmaker Ralph Borelli grew up in East San Jose next to an apricot orchard where his job was to cut open the succulent fruit and lay it out for drying.

“They used to let me cut the apricots until I had a cut on every finger. Then I was relegated to the pit boy.

Born and raised in oldSanta ClaraCounty, young Ralph cut his teeth on land deals and real estate acquisitions. He recalls attending city council meetings with his father, Nelo G. Borelli, an Italian immigrant who founded theSilicon Valleyreal estate company in 1955.

In 1973, Borelli took over the small firm and built it into a commercial real estate engine that manages 4 million square feet, has more than 1,000 tenants and employs 30 brokers and their assistants.

Ralph Borelli worked on a deal since 1976 and
said, “I should have bid the job by the hour.”

During his career he has brokered some of the biggest land deals inSanta ClaraCounty, including KB Homes’ Tuscany Hills project of which he is most proud, and the Elmwood transaction valued at $60 million withMilpitasandSanta ClaraCounty.After closing a retail deal inMorgan Hillfor 66 acres that he began working on in 1976, Borelli only had this to say: “In hindsight, I should have bid the job by the hour.”

Born in this valley, he has been a witness to its metamorphosis, even as he has played a role in driving it. His boyhood valley of orchards became a land of tract homes and industrial campuses, and it is now growing into higher-density housing and office complexes.

Borelli calls it “land recycling”.

TITLE: CEO, Borelli Investment CompanyAGE: 52

CAREER: Began workings as a real estate broker at 19 and worked at an auto wrecking yard for four years.

EDUCATION: San JoseStateUniversity, 1976, B.A. in business administration with emphasis in real estate.

FAMILY: Wife, Gina, and three daughters, Marissa, 23; Kristina, 21; and Janelle, 18.

 

FIVE THINGS TO KNOW ABOUT RALPH BORELLI

1. Stock cars don’t have speedometers, so Borelli doesn’t know exactly how quickly he’s sped around the Grand Prix track. His best guess is125 mph. “We were going into a curve on the race track, so it was pretty hairy.” He and his crew, the Historic Stock Car Racing Series, raised about $35,000 for the Canary Foundation by giving rides along the track to the highest bidders.
2. He just closed a land deal for 66 acres inMorgan Hillthat he began working on in 1976.
3. Borelli Investment has forged an alliance with an Asian-American brokerage firm, GD Commercial Real Estate inMilpitas, to sell commercial condos to overseas investors. A delegation fromChinais scheduled to visit in September.
4. He was named Land Broker of the Year by the Association of Silicon Valley Brokers.
5. His first real estate deal was selling a house in downtownSan Josefor $7,500. He received 75 $100 dollar bills stuffed in a paper bag. Where did the cash come from? Borelli didn’t ask.

Q You started in commercial real estate more than 30 years ago, and you have watched the economic development of the valley. Is the valley transforming itself again?

A The orchards are all gone. TheMorgan Hilldeal has a vineyard on it. Most development deals today are recycling property. We’re involved in a number of transactions where we’re tearing down industrial buildings that aren’t that old. We tore one down in January that was 22 years old… There was nothing wrong with that building. But it was in an area ofSan Josethat was being transformed from industrial to residential. There’s still such tremendous demand for residential housing.

 

Q This is controversial, as some say the city is demolishing its industrial base that employs people in favor of houses.

A In my view, there’s still a lot of buildings that are functionally obsolete. And there’s a lot of manufacturing that is gone and is not coming back. And there’s still a tremendous demand for housing.

 

Q But once houses are built, the recycling process is over. Houses are permanent. Where do you stand on this?

A In my opinion as our market matures, you are going to have a lot more office type of buildings rather than manufacturing buildings because the manufacturing is gone and I don’t think it’s coming back.

Manufacturing in this valley for the most part now is software-related. You can have a multistory office building filled with software engineers and that’s manufacturing. It’s a different type of product. You have to go vertical with the price of land. It’s a natural evolution of our marketplace.

 

Q You’ve watched the orchards bulldozed for housing, now buildings your company constructed get torn down for either more housing or higher office buildings. I understand that you are a businessman with a family to feed and employees to pay – but do you feel any nostalgia after all the changes?

A Time marches on. People have got to decide where the priority is. Are you going to provide enough housing for people or artificially choke off housing and keep raising the price? People wonder why housing is so expensive. It’s so simple, it’s supply and demand. If you want this bucolic neighborhood with a bunch of ranches around, then be prepared for high prices, because I don’t think people are going to leave here.

 

Q The recycling trend: What do you think about that?

A As an economy, you need to adapt to changing times in the marketplace. Otherwise the market is going to pass you by… Those buildings are obsolete; they should be torn down. If you don’t change with the times, the private sector is going to pass you by. Then you’re going to have a wasteland.

 

Q What do you think about Yahoo’s recent acquisition inSanta Claraand its plans to demolish the buildings and construct a new campus, possibly a headquarters?

A I think a move like that is outstanding forSilicon Valleybecause you have the bellwether company making a huge commitment to maintaining their headquarters here, and we need that. Fortunately Yahoo has enough of a margin that they can afford to pay. Apple is another example, as is Google. These companies can afford to stay here and pay their employees enough so they can afford to live here. But if you manufacture coat hangers and you don’t have enough of a margin, you can’t be here and you won’t be here.

Catching up with Ralph Borelli – Real Estate Baron Started Out Cutting ‘cots

Catching up with Ralph Borelli – Real Estate Baron Started Out Cutting ‘cots

By Katherine Conrad, San Jose Mercury News, August 13, 2006

Commercial real estate dealmaker Ralph Borelli grew up in East San Jose next to an apricot orchard where his job was to cut open the succulent fruit and lay it out for drying.

“They used to let me cut the apricots until I had a cut on every finger. Then I was relegated to the pit boy.

Born and raised in old Santa Clara County, young Ralph cut his teeth on land deals and real estate acquisitions. He recalls attending city council meetings with his father, Nelo G. Borelli, an Italian immigrant who founded the Silicon Valley real estate company in 1955.

In 1973, Borelli took over the small firm and built it into a commercial real estate engine that manages 4 million square feet, has more than 1,000 tenants and employs 30 brokers and their assistants.

During his career he has brokered some of the biggest land deals in Santa Clara County, including KB Homes’ Tuscany Hills project of which he is most proud, and the Elmwood transaction valued at $60 million with Milpitas and Santa Clara County.After closing a retail deal in Morgan Hill for 66 acres that he began working on in 1976, Borelli only had this to say: “In hindsight, I should have bid the job by the hour.”

Born in this valley, he has been a witness to its metamorphosis, even as he has played a role in driving it. His boyhood valley of orchards became a land of tract homes and industrial campuses, and it is now growing into higher-density housing and office complexes.

Borelli calls it “land recycling”.

  TITLE: CEO, Borelli Investment CompanyAGE: 52CAREER: Began workings as a real estate broker at 19 and worked at an auto wrecking yard for four years.

EDUCATION: San Jose State University, 1976, B.A. in business administration with emphasis in real estate.

FAMILY: Wife, Gina, and three daughters, Marissa, 23; Kristina, 21; and Janelle, 18.

 

FIVE THINGS TO KNOW ABOUT RALPH BORELLI
  1. Stock cars don’t have speedometers, so Borelli doesn’t know exactly how quickly he’s sped around the Grand Prix track. His best guess is125 mph. “We were going into a curve on the race track, so it was pretty hairy.” He and his crew, the Historic Stock Car Racing Series, raised about $35,000 for the Canary Foundation by giving rides along the track to the highest bidders.
  2. He just closed a land deal for 66 acres in Morgan Hill that he began working on in 1976.
  3. Borelli Investment has forged an alliance with an Asian-American brokerage firm, GD Commercial Real Estate in Milpitas, to sell commercial condos to overseas investors. A delegation from China is scheduled to visit in September.
  4. He was named Land Broker of the Year by the Association of Silicon Valley Brokers.
  5. His first real estate deal was selling a house in downtown San Jose for $7,500. He received 75 $100 dollar bills stuffed in a paper bag. Where did the cash come from? Borelli didn’t ask.
   

Q You started in commercial real estate more than 30 years ago, and you have watched the economic development of the valley. Is the valley transforming itself again?

A The orchards are all gone. The Morgan Hill deal has a vineyard on it. Most development deals today are recycling property. We’re involved in a number of transactions where we’re tearing down industrial buildings that aren’t that old. We tore one down in January that was 22 years old… There was nothing wrong with that building. But it was in an area of San Jose that was being transformed from industrial to residential. There’s still such tremendous demand for residential housing.

Q This is controversial, as some say the city is demolishing its industrial base that employs people in favor of houses.

A In my view, there’s still a lot of buildings that are functionally obsolete. And there’s a lot of manufacturing that is gone and is not coming back. And there’s still a tremendous demand for housing.

Q But once houses are built, the recycling process is over. Houses are permanent. Where do you stand on this?

A In my opinion as our market matures, you are going to have a lot more office type of buildings rather than manufacturing buildings because the manufacturing is gone and I don’t think it’s coming back.

Manufacturing in this valley for the most part now is software-related. You can have a multistory office building filled with software engineers and that’s manufacturing. It’s a different type of product. You have to go vertical with the price of land. It’s a natural evolution of our marketplace.

Q You’ve watched the orchards bulldozed for housing, now buildings your company constructed get torn down for either more housing or higher office buildings. I understand that you are a businessman with a family to feed and employees to pay – but do you feel any nostalgia after all the changes?

A Time marches on. People have got to decide where the priority is. Are you going to provide enough housing for people or artificially choke off housing and keep raising the price? People wonder why housing is so expensive. It’s so simple, it’s supply and demand. If you want this bucolic neighborhood with a bunch of ranches around, then be prepared for high prices, because I don’t think people are going to leave here.

Q The recycling trend: What do you think about that?

A As an economy, you need to adapt to changing times in the marketplace. Otherwise the market is going to pass you by… Those buildings are obsolete; they should be torn down. If you don’t change with the times, the private sector is going to pass you by. Then you’re going to have a wasteland.

Q What do you think about Yahoo’s recent acquisition in Santa Clara and its plans to demolish the buildings and construct a new campus, possibly a headquarters?

A I think a move like that is outstanding for Silicon Valley because you have the bellwether company making a huge commitment to maintaining their headquarters here, and we need that. Fortunately Yahoo has enough of a margin that they can afford to pay. Apple is another example, as is Google. These companies can afford to stay here and pay their employees enough so they can afford to live here. But if you manufacture coat hangers and you don’t have enough of a margin, you can’t be here and you won’t be here.

 


Contact Katherine Conrad at kconrad@mercurynews.com or (408) 920-5073.

 

Morgan Hill Mall to Open Next Summer – City aims to stem flow of shoppers to Gilroy

By Katherine Conrad, San Jose Mercury News,August 8, 2006 For too many years Morgan Hill residents have spent most of their shopping dollars — a whopping $100 million annually — outside their city limits.They had little choice. City officials tried to avoid the cookie-cutter look of big-box national retailers and focused instead on nurturing the city’s downtown. Over time, city funds slowly dwindled as tax dollars found their way elsewhere.Now the South County city is coming late to the big-box party, but on its own terms. With the construction of a 650,000-square-foot shopping center across 66 acres — Morgan Hill’s largest retail project to date — it’s eager to grab nationally recognized retailers to fill the center’s stores before they land somewhere else.

But Morgan Hill could face a struggle to reverse the trend of dollars flowing to South San Jose’s Oakridge Mall and to nearby Gilroy, where shoppers have made the Gilroy Premium Outlets one of the most successful outlets on the West Coast.

Scheduled to open in summer 2007, the currently unnamed center near Highway 101 and Cochrane Road has been 30 years in the making and will boast the region’s largest Target store at 127,000 square feet. It also will have Petco, Staples and Cost Plus World Market, according to Garrett Toy, Morgan Hill’s director of business assistance.

Developers John DiNapoli of San Jose and Daryl Broman of Oakland plan to spend more than $100 million to build the center, which may feature a movie complex as well as national restaurants, such as Chili’s.

“The city of Morgan Hill for most of the last 10 years has not been pro-development for big-box retail,” said Jim McMasters, a retail expert with the Colliers International commercial real estate brokerage, who handled leasing for Gilroy Crossings, which opened in 2004.

“But what that really did was open the door to Gilroy to explode with retail.”

Affluent residents

Morgan Hill’s well-educated population of 33,000 has a solid median household annual income of $82,000, the kind of demographics retailers crave. And while they may enjoy patronizing their quaint downtown, clearly they also open their wallets wide in national retail stores.

City officials are doing their best to strike a balance by serving their residents without abandoning downtown merchants.

“We asked the developers for a mix of uses that would not directly compete with the downtown,” said City Manager Ed Tewes. “And a lot of attention was paid to the physical design of the center and how it is laid out to distinguish itself from shopping opportunities in the north and south.”

Tewes said Morgan Hill is looking for a center that doesn’t look like a “series of boxes surrounded by a sea of parking.” He hopes the careful landscaping with shrubs, oak and hawthorn trees will give it a feel that doesn’t compete with downtown.

“Morgan Hill is working very hard on the downtown and we’ve been working with them,” DiNapoli said. “We’ve brought in local brokers who have helped give them ideas about what do with the downtown.”

DiNapoli noted that this approach supports all of Morgan Hill, not just his development, and that suits him just fine. “We’re long-term holders,” he said. “We’re not just building it to sell it.”

Time will tell if another South County shopping center can succeed or if it’s simply too late. But Tewes noted that regardless, city policies aren’t to blame for the 30 years it took to develop the 66-acre site. The city’s general plan has designated the area for commercial development since 1969.

“But painting it red (for retail) in the general plan doesn’t make it happen,” he said.

Ralph Borelli, chief executive of San Jose’s Borelli Investment, began talking to landowners, including the wine-making Guglielmo family, in 1976 about selling their land for development. Litigation among the landowners who inherited the property and over the Cochrane Road Assessment District also took years to settle.

“Stubborn” city

Borelli, who said the deal took the longest to close of any in his career, recalled that developers tried to build houses on the site and then offices, but each time they hit a brick wall with Morgan Hill officials, who insisted on retail, but only the right kind of retail.

“It wasn’t for a lack of trying,” Borelli said. “We lost a significant amount of deals to Gilroy. But I have to hand it to Morgan Hill, its planning commission held out for regional retail and that is what they will get.”

But McMasters said cities rarely succeed in trying to ignore retail trends.

“Morgan Hill has lost ground by being stubborn and waiting, and not wanting the big-box look,” McMasters said. “But retail is a dynamic industry. You can’t protect yourself when the customer benefits by the chain store.”

Contact Katherine Conrad at kconrad@mercurynews.com or (408) 920-5745.

Morgan Hill Mall to Open Next Summer; City Aims to Stem Flow of Shoppers to Gilroy

Morgan Hill Mall to Open Next Summer; City Aims to Stem Flow of Shoppers to Gilroy

By Katherine Conrad, San Jose Mercury News, August 8, 2006

For too many years Morgan Hill residents have spent most of their shopping dollars — a whopping $100 million annually — outside their city limits.

They had little choice. City officials tried to avoid the cookie-cutter look of big-box national retailers and focused instead on nurturing the city’s downtown. Over time, city funds slowly dwindled as tax dollars found their way elsewhere.

Now the South County city is coming late to the big-box party, but on its own terms. With the construction of a 650,000-square-foot shopping center across 66 acres — Morgan Hill’s largest retail project to date — it’s eager to grab nationally recognized retailers to fill the center’s stores before they land somewhere else.

But Morgan Hill could face a struggle to reverse the trend of dollars flowing to South San Jose’s Oakridge Mall and to nearby Gilroy, where shoppers have made the Gilroy Premium Outlets one of the most successful outlets on the West Coast.

Scheduled to open in summer 2007, the currently unnamed center near Highway 101 and Cochrane Road has been 30 years in the making and will boast the region’s largest Target store at 127,000 square feet. It also will have Petco, Staples and Cost Plus World Market, according to Garrett Toy, Morgan Hill’s director of business assistance.

Developers John DiNapoli of San Jose and Daryl Broman of Oakland plan to spend more than $100 million to build the center, which may feature a movie complex as well as national restaurants, such as Chili’s.

“The city of Morgan Hill for most of the last 10 years has not been pro-development for big-box retail,” said Jim McMasters, a retail expert with the Colliers International commercial real estate brokerage, who handled leasing for Gilroy Crossings, which opened in 2004.

“But what that really did was open the door to Gilroy to explode with retail.”

Affluent residents

Morgan Hill’s well-educated population of 33,000 has a solid median household annual income of $82,000, the kind of demographics retailers crave. And while they may enjoy patronizing their quaint downtown, clearly they also open their wallets wide in national retail stores.

City officials are doing their best to strike a balance by serving their residents without abandoning downtown merchants.

“We asked the developers for a mix of uses that would not directly compete with the downtown,” said City Manager Ed Tewes. “And a lot of attention was paid to the physical design of the center and how it is laid out to distinguish itself from shopping opportunities in the north and south.”

Tewes said Morgan Hill is looking for a center that doesn’t look like a “series of boxes surrounded by a sea of parking.” He hopes the careful landscaping with shrubs, oak and hawthorn trees will give it a feel that doesn’t compete with downtown.

“Morgan Hill is working very hard on the downtown and we’ve been working with them,” DiNapoli said. “We’ve brought in local brokers who have helped give them ideas about what do with the downtown.”

DiNapoli noted that this approach supports all of Morgan Hill, not just his development, and that suits him just fine. “We’re long-term holders,” he said. “We’re not just building it to sell it.”

Time will tell if another South County shopping center can succeed or if it’s simply too late. But Tewes noted that regardless, city policies aren’t to blame for the 30 years it took to develop the 66-acre site. The city’s general plan has designated the area for commercial development since 1969.

“But painting it red (for retail) in the general plan doesn’t make it happen,” he said.

Ralph Borelli, chief executive of San Jose’s Borelli Investment, began talking to landowners, including the wine-making Guglielmo family, in 1976 about selling their land for development. Litigation among the landowners who inherited the property and over the Cochrane Road Assessment District also took years to settle.

“Stubborn” city

Borelli, who said the deal took the longest to close of any in his career, recalled that developers tried to build houses on the site and then offices, but each time they hit a brick wall with Morgan Hill officials, who insisted on retail, but only the right kind of retail.

“It wasn’t for a lack of trying,” Borelli said. “We lost a significant amount of deals to Gilroy. But I have to hand it to Morgan Hill, its planning commission held out for regional retail and that is what they will get.”

But McMasters said cities rarely succeed in trying to ignore retail trends.

“Morgan Hill has lost ground by being stubborn and waiting, and not wanting the big-box look,” McMasters said. “But retail is a dynamic industry. You can’t protect yourself when the customer benefits by the chain store.”

Contact Katherine Conrad at   kconrad@mercurynews.com or (408) 920-5745.