A "scary" investment has become a solid bet

What a bold bet it was for the Mehran family to put together the mixed-use City Center project with celebrity architect Renzo Piano.

Alexander Mehran Jr., the president and chief operator officer, told the crowd at the San Francisco Business Times event last week that it was Sunset Development Company’s biggest investment ever. It took place in the firm’s Roundhouse conference center.

Sunset has built 9 million square feet of office buildings in Bishop Ranch in San Ramon, but the retail venture was new and Mehran said they didn’t know what they were doing. “It was scary,” he said.

They hired Jeff Dodd away from the Irvine Company to bring retail expertise in-house. In a time when traditional retail space—both strip malls and enclosed malls—are shrinking because consumers aren’t interested in traditional shopping, those that are succeeding make sure their spaces are “an experience.” Check out the websites for the Simon Company’s Stoneridge mall or the San Francisco Bay Outlets.

That’s the mix Sunset is attracting to the 300,000-square-foot City Center Bishop Ranch. It starts with the luxury theater, The Lot, and continues with the Equinox fitness center. It also includes retailers such as Pottery Barn and Williams Sonoma along with many restaurants. The “Modern Public Square,” as the marketers have dubbed it, is designed so people will want to be there routinely as opposed to when they looking to purchase something at a retailer.

It is scheduled to open in November. Mehran got a chuckle from long-time residents in the crowd when he mentioned a 1991 newspaper article that described what was to become downtown San Ramon. There have been a few plans over the years, but nothing came together until City Center.

Mehran’s discussion with Mary Huss, the publisher of the Business Times, took place the same week that one of the park’s largest tenants, GE Digital, was placed on the market by GE, according to the Wall Street Journal. The firm leases 350,000 square feet in the former AT&T headquarters and has about 1,600 employees in its San Ramon headquarters.

Under former CEO Jeff Immelt the company was expected to be a shining light for the conglomerate. Since John Flannery succeeded Immelt and started a review of all of GE’s business units, the GE Digital’s star has dimmed. The company laid off workers last year.

One panelist observed that it will be sold to a company that will grow the business that is based on the Internet of Things with its own custom software platform.