Is El Dorado Hills destined to be the next Bodie?

By: Art Garcia
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Asked how business is doing in the current recessionary economic climate, Sammy Cemo succinctly sizes up conditions at the El Dorado Hills Business Park he developed: “This is ugly,” he said. Drive around our little cluster of residential villages, retail outlets and commercial offices and the number of vacant business spaces prompts one to worry and wonder: Is the “new town” of El Dorado Hills on the verge of becoming a ghost town like the infamous Gold Rush town of Bodie? Linens ‘n’ Things, a national home goods retailer, has closed more than 100 locations and plans to shut the 371 stores it has left. The 59-year-old Mervyn’s department store chain this month filed for Chapter 7 bankruptcy, which means its approximately 175 stores, mostly in California, will close. Most notable in El Dorado Hills is the near collapse of the much ballyhooed, long delayed La Borgata center with its Tuscan design, highly rated Masque Ristorante and Cantinata and rents comparable to the priciest locations in downtown Sacramento. Add the recent loss of another major tenant, the spacious Le Petit Chateau French country home furnishings store, and the name of the center could be switched to La Borlossa. The largest surviving tenant, and perhaps La Borgata’s steadiest from Day 1, is Tatia Davenport’s successful day spa. Bank of America remains the other anchor, followed by a sushi restaurant and the Sartory coffee/Internet wi-fi shop. “This economic downturn we’re in is devastating,” commented C. Townley Larzelere, president of The Whitney Group, a residential housing research consultancy officed in La Borgata, upstairs and next to the late Masque. “People are contracting tremendously. A lot of people are going out of business here and everywhere.” He said a recent vacancy factor analysis by a large commercial brokerage firm for the Sacramento subregion showed El Dorado Hills “if not number one, was number two in highest degree of vacancy – and that was after accounting for something in the magnitude of 50,000 to 60,000 sq. ft. of space that was leased temporarily in the El Dorado Hills Business Park by the Red Hawk Casino. “Fifty thousand to 60,000 sq. ft., based on the size of our market, is a big number,” Lazelere noted, “so if that hadn’t been there, the numbers would have been much worse.” Doug Wiele, president of Foothill Partners Inc., an El Dorado Hills consultant on the development of Town Center since its early planning days in 1996, paints a brighter picture of the town’s commercial future. “On balance, we’re doing well,” he said. “I wouldn’t say we’re doing fine. I would say we’re weathering this economic slump pretty well. “Some of our tenants continue to do ever-increasing business, some are struggling. But if you have to be in this kind of economy, I’m glad we are where we are because there are places that are hurting more.” Wiele said Town Center will announce, possibly this week, completion of two “major” tenant contracts, “really exciting, fun stuff. There’s a great deal of irony in those deals because in the midst of what is arguably a very difficult real estate market, we’re doing okay.” Art Garcia is principal of Media Mark, an El Dorado Hills corporate, private and personal writing service, at 941-8510.