Home Depot takes third shot at San Francisco store
Home Depot has filed an application to build a new store in the Bayview District of San Francisco, the chain’s third major attempt to locate a store in the city.
The proposed store would be located on a piece industrial land at 1901 Cesar Chavez St., across from a FedEx distribution center. The parcel is currently used by the general contractor Webcor as staging for its construction of the San Francisco General Hospital.
Until 2009, the 50,000-square-foot building on the property was a printing facility for the San Francisco Chronicle that closed in 2009 when the newspaper moved to a new plant.
The 120,000-square-foot store and garden center would be built on a square site bounded by Cesar Chavez Street on the north, Marin Street on the south, Interstate 280 on the east, and Evans Street on the west.
The application comes four years after Home Depot walked away from a controversial site on Bayshore Boulevard that had taken years to entitle. That site was eventually bought by Lowe’s, which currently has a 107,000-square-foot store there.
Before the Bayshore plan, Home Depot was shot down in its efforts to construct a store on the former Schlage Lock land in Visitacion Valley.
Home Depot spokeswoman Kathryn Gallagher said that the Bayshore site fell victim to a combination of a brutal recession and an expensive design that included a three-story garage. But she said the retailer never stopped looking at sites in San Francisco.
“Of course it was disappointing having invested a decade, but we never walked away and we never have given up hope,” said Gallagher. “We have had our eyes out for the right location.”
In the Cesar Chavez site, Home Depot was drawn to the access to highway and industrial zoning.
“San Francisco is an important market for the Home Depot. We have wanted to open a store in the city for decades and feel we have found the perfect location for a store,” Gallagher said.
She said there is a continued demand for Home Depot’s products and services in San Francisco, and the store would complement busy stores in Daly City and Colma.
San Francisco loses more than $600 million in home improvement sales revenue to retailers outside the city, according to a 2012 study that Home Depot commissioned.
“We have been trying to locate a store in San Francisco for more than a decade because San Francisco is a very important market for Home Depot,” Gallagher said.
The store will generate 175 jobs.
“There is no hidden agenda here – it’s a great site and we want to build a store,” she said.
An earlier version of this story misidentified the site that Home Depot is considering.
J.K. Dineen covers real estate for the San Francisco Business Times.
Home Depot Still Trying its Luck by Zacks Equity Research
Home improvement chain store Home Depot Inc. (HD – Analyst Report) returns to San Francisco, after failing twice in a span of ten years, to get a foothold in the city. Home Depot recently filed an application with the city officials to construct a 120,000 square-feet store and a garden center on 7.9 acres industrial land in the Bayview District of San Francisco.
The Home Depot store, located at 1901 Cesar Chavez Street, adjoins the Marin Street, Interstate 280, and the Evans Street. Situated across the FedEx distribution center, the store site housed a printing press owned by the San Francisco Chronicle till 2009. Presently, the site is owned by the Hearst Corp. and is being used by Webcor, a construction firm, to complete work on the nearby San Francisco General Hospital.
Home Depot’s previous failed attempts in San Francisco include ventures to open stores on Bayshore Boulevard and in Visitacion Valley. Four years back, in 2008, the company retreated from its plans of constructing a store at the Goodman Lumber’s site on Bayshore Boulevard. The store plan had received approval from officials despite deliberate oppositions that the store will hamper the business of local garden and hardware stores as well as raise traffic issues in the locality.
Meanwhile Home Depot migrated from the plan due to the economic slowdown and an expensive design. Home Depot’s major competitor, Lowe’s Companies Inc. (LOW – Analyst Report), rose to the occasion and grabbed the opportunity and opened a store on the site.
Prior to this, Home Depot had embarked on a plan to open a store in the former Schlage Lock land in Visitacion Valley in 2001. The company’s plan was then turned down by the city officials, who restricted any mega-stores from opening stores in the region.
Home Depot is a leading player in the highly-fragmented home improvement industry. The company has reinvigorated itself with a shift in focus from new square footage growth to maximization of productivity through its existing store base. In addition, the company has implemented significant changes to its store operations to make them simpler and more customer-friendly. We believe these initiatives will induce more customer traffic to its stores, while boosting its top line.
However, the company’s business is highly competitive, primarily based on customer services, price, store location and assortment of merchandise.
Currently, Home Depot has a Zacks #2 Rank, implying a short-term ‘Buy’ rating on the stock. Besides, we retain our long-term ‘Neutral’ recommendation on the stock.