Mountain View struggles to fill empty downtown vacancies

In recent years, Mountain View has struggled with high retail vacancy rates, despite efforts to revitalize the downtown corridor.

Now the city has a clearer picture of why so many storefronts are vacant, after commissioning a consulting firm, The Retail Coach, to investigate the reasons for the empty spaces.

The upshot is that property owners and real estate brokers are optimistic that Mountain View is headed in the right direction and investing in the downtown area. But for many, the path forward is not happening fast enough. Getting permits is an unclear process and perceived as a hassle, and there’s no strong motivator compelling property owners to fill up empty storefronts.

There is also a disconnect between available retail spaces and permitted uses by the city, said Charles Parker, project director at The Retail Coach, who presented the report to the Downtown Committee on Feb. 4.

The good news is there’s plenty of retail potential in Mountain View, according to the report. While the city is not a top shopping or dining destination for the region, it still attracts visitors from a large area and is highly accessible by Caltrain.

Mountain View also has a sizable demographic of young urban singles who are living in close proximity to downtown. They are more likely to spend their disposable income on dining, shopping and entertainment experiences, Parker said.

But so far, Mountain View has not fully capitalized on these assets. A development update posted on the city’s website says there are 18 ground floor vacancies on Castro Street, with several of these sitting empty for more than three years.

The Retail Coach reached out to more than a dozen property owners on Castro Street, looking to get information about their empty storefronts. It heard back from four respondents who provided candid assessments about their reasons for not filling the spaces.

The consultants also connected with real estate brokers, many of whom have been working in Mountain View for years.

A top issue was a sense that there was very little direction from city leadership about its vision for the downtown area. Property owners are hesitant to invest in their spaces if they are not sure that their projects will be approved, Parker said.

Community Development Director Christian Murdock noted that Mountain View is in the process of updating its precise plan for the downtown area. The plan sets out what the city allows and prohibits as permitted uses. But this is not necessarily the best way to help businesses get off the ground, he said.

“That is a critical issue that’s on my list to try to improve that situation so that we’re not just saying ‘yes’ or ‘no,’ but we’re trying to help those things that are ‘yeses’ get through the process in a more constructive way,” he said.

Respondents also had a poor opinion of working with the city. The permit process was time-consuming and difficult to navigate, they said, adding that they often received conflicting and inconsistent feedback from city staff.

Another pain point was right-sizing the retail spaces. Several ground floor vacancies on Castro Street have a lot of square footage, making them less suitable for boutique retail. As a result, property owners have had difficulty leasing out the spaces, leaving them “dark” instead, the report said.

Murdock said the city is working to implement strategies to improve the permitting process like putting in a one-stop service. The city also has been updating its codes to make it easier to allow for different and more flexible uses, like retail pop-ups, in vacant spaces.

Still, a lot of this information was not reaching the public, Murdock said, adding that more could be done to communicate better with property owners and brokers.

Downtown committee members pushed back on some of the city’s responses, urging for more immediate action.

“One of the things we do is an awful lot of ‘looking at’ in Mountain View,” said Committee member Mike Kasperzak, who encouraged the city to move faster on its plans to activate downtown spaces.

Committee members also touched on the thorny issue of non-responsive property owners who have shown no interest in filling their spaces, despite attempts by the city to work with them.

“We have tried carrots. We have tried the appeal approach, and that hasn’t worked. So what are the motivators that would get them to move?” asked Peter Katz, president and CEO of the Mountain View Chamber of Commerce.

The report included a span of properties, 360-368 Castro St., in its analysis, even though the owner did not respond to inquiries to participate in the study. It could be a major catalyst for retail growth, the report said, adding that it was located near a parking structure.

Other property owners are sitting on vacancies, like at 279 Castro St., assembling surrounding lots to potentially go taller as a mixed-use development. In this case, there is not a strong financial need or incentive to lease out the space, the report said.

“It kind of leaves the property owners the ball in their court to improve or change their space, which is something that is tough to make them do – tough to do a carrot or a stick,” Parker said.

This story originally appeared in the Mountain View Voice. Emily Margaretten joined the Mountain View Voice in 2023 as a reporter covering City Hall.