A redevelopment official estimated last night the city will lose about $3 million by selling the old Albertson's property on East 14th Street to the developer of the proposed Village Marketplace retail center and plaza.
The estimate came during a public forum attended by about two dozen community members at City Hall.
In response to questions initiated by San Leandro resident Fran Leidy, redevelopment officer Cynthia Battenberg said it had cost the city about $6 million to acquire the property on the 1500 block of East 14th. The city spent another $175,000 to tear down the old Albertson's and clear the property for a new use.
Under a proposed agreement, the city would sell the parcel to developer David Irmer of the Innisfreee Companies at its current appraised value, which Battenberg estimated to be about $3 million.
She likened the difference to an investment by the city.
"It's really a catalyst project for the downtown," Battenberg said.
Most of the meeting was given over to a presentation by Scott Whitney, real estate director for Fresh & Easy, the chain of small shopping markets that will be the development's anchor tenant.
He fielded questions about the food selection and how Fresh & Easy compared to Trader Joe's. The audience seemed evenly split between skeptics and supporters.
Resident Johanne Dictor said she would have preferred a more upscale market but thought Fresh & Easy could serve a useful purpose.
"Safeway needs some competition," she said in reference to that chain's nearby downtown store.
Irmer, the developer, deflected questions about truck traffic by saying that Fresh & Easy was much smaller than the old Albertson's and would require fewer deliveries.
A Peet's Coffee and Chipotle Mexican Grill have already been announced as future tenants.
Asked what else San Leandrans should expect, Irmer said it would be tough to sign up or announce other tenants until he has a definite agreement.
"What we intend to do is to get the City Council on board with a plan that works economically, physically and aesthetically," he said.
He said the project would require about a $10 million investment.
Irmer was the developer of the Creekside Plaza Office Complex near the downtown BART station. He said the Village Marketplace would be of similar quality.
Battenberg said the project was going back to the council for another review Monday night.
Assuming there are no roadblocks, there will then be months of negotiations over fine print of a deal that would come back to the council for a final decision in February.
She said that, despite uncertainty at the state level about the future of redevelopment agencies, the city could proceed with the project so long as the council approves it.
Battenberg said Irmer could break ground in July 2012.