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MINUTES City of San Leandro City Council Meeting~July 9, 2007 Page 3 Chuck Moore, Vice President of Construction for Grocery Outlet, addressed the City Council, stating that he worked for Lucky Stores and Albertsons for 18 years, including at the subject site. Mr. Moore commented that today's supermarkets are typically 60,000 square feet, have 60,000 SKUs and have service departments such as deli, bakery, fish, floral and pharmacy. By contrast, a Grocery Outlet is typically 15,000-25,000 square feet, 6,000 SKUs, and a limited variety of items. Mr. Moore commented that Grocery Outlets are typically run by local husband and wife teams, and the stores get involved with the community. Marc Drasin, Vice President of Real Estate for Grocery Outlet, addressed the City Council, commenting that he negotiated the lease with Red Mountain Retail Group. Mr. Drasin noted that the property had been widely circulated among the real estate community over the past two years, and no other tenants expressed interest in the property. Mr. Drasin stated that Grocery Outlet wants to invest $1 million cash to remodel the property. He noted that in its lease agreement with Red Mountain, Grocery Outlet has agreed to allow Red Mountain to redevelop the property for mixed use. Mr. Drasin referenced a market study performed by MapInfo, which concluded that the proposed Grocery Outlet would draw 90% of its business from within a two-mile radius. Council member Souza commented on the binder of information provided by the appellants, and asked for details on how the letters from supporters were collected. Mr. Nelson responded that all the letters were gathered during the Saturday barbecue, and attendees were told to let their Councilmembers know if they wanted to have a Grocery Outlet. Councilmember ProIa asked how many stores were in the Grocery Outlet chain. Mr. Moore stated that Grocery Outlet has about 60 stores in California, and it operates in six western states. The Hearing was then opened to the public. Karen Fernandez, San Leandro resident, addressed the City Council, commenting that the information on Grocery Outlet's website disputes its claim as a neighborhood grocery store. Ms. Fernandez read from the web pages, which compared Grocery Outlet to a supermarket, listed the company's annual revenue of $600 million, stated that it had over 124 stores in the Western U.S., had a 5A Dunn & Bradstreet rating, and listed its competitors as Costco, Sam's Club, WalMart, Target, Raley's Albertson's and Safeway. Mike Rawlis, San Leandro resident, addressed the City Council, commenting that he would like to see the site preserved as a supermarket in order to maintain competition in the area. Kathy Banks, San Leandro resident, addressed the City Council, commenting that there needs to be competition to keep grocery prices down in the downtown area.