FEATURE ARTICLE, MAY 2007

CARVED IN STONE
Stone Bros. & Associates and M&M Stone, Inc. have put an indelible mark on Stockton, California’s growing retail scene.
Katie Foxworth Lee

Retail in California is always a lucrative business for both developers and retailers. One may think of upscale suburban centers in the Inland Empire, or of vibrant mixed-use entertainment districts in Los Angeles, or of new urban projects in San Francisco. Even, perhaps, of exciting new retail projects happening in Stockton. Wait…Stockton? It is pretty safe to assume that Stockton, California, doesn’t typically register on the radar as a hotspot for retail. However, all of that is changing.

One locally based developer, Stone Bros. & Associates, and its affiliated management company, M&M Stone, Inc., are turning heads in the retail development world with exciting projects, each located on one of the four corners of Pacific Avenue and Robinhood Drive. This “Four Corners” project, into which Stone Bros. plans to invest $50 million, will undoubtedly become the “Main and Main” of North Stockton.

Stone Bros.’ love affair with Stockton, California, has deep roots, beginning in 1948 with the company’s launch by brothers Max and Merrill Stone, both Stockton residents. The company originally began as a residential developer, which built more than 16,000 homes in the area. Later, the company expanded into multifamily residential, as well as retail and office developments, in Stockton, Lodi, Sacramento and Modesto.

“There is such a historical connection to our family,” says co-managing director Jay Allen of Stockton. “It’s always been a stable market. It’s also been transitioning from an agriculture-based community to a bedroom community of the East Bay area.”

Anticipating this growth trend even 50 years prior, the original founders of Stone Bros. began acquiring underdeveloped land in emerging areas of Stockton, including parcels on all four corners of the intersection of Pacific Avenue and Robinhood Drive.

Recently, Sherwood Mall added a big box expansion wing.

Then, in 1964, Stone Bros. broke ground on its largest retail project, Sherwood Mall, originally built as a 500,000-square-foot enclosed regional mall anchored by the region’s first Macy’s and Montgomery Ward stores. Twice the mall was expanded and renovated over the years, adding another 150,000 square feet of gross leaseable area, a Gottschalks department store and a food court.

In the 1990s, Max and Merrill Stone passed away, with asset management moving to the second generation of the Stone family. This is where co-managing directors Jay Allen and Mike Minson, both of whom married into the Stone family, come in.

“I was an attorney practicing law in Seattle until moving here,” says Allen, who married Marilyn Stone in 1972.

Minson also married a Stone daughter, Leslie Stone, in 1978. “I started in construction in the Central Valley,” he says. “I had my own construction firm and later worked for Stone Bros. before becoming co-managing director.”

Another crucial piece of the puzzle is Robert Romero, president and CEO of M&M Stone, Inc. Romero, too, has a background in construction. “I began working for Stone Bros. in 1973,” he says. “As the company grew, Stone Bros. created M&M Stone, Inc. in 1979 to manage all their commercial properties.” Today, M&M Stone handles third-party management for several non-Stone Bros. properties as well.

The Patio expansion at Sherwood Mall features a fireplace, pendant lights, radiant heated floor and misters during the summer.

Currently, Stone Bros. owns 2 million square feet of commercial property, including one regional mall, four community centers, three neighborhood centers, six apartment complexes and seven office buildings.

Stone Bros. prides itself on reinvesting in its current properties; it rarely ever sells a property and instead focuses on investing in properties for the long haul. “We very seldom dispose of properties because we feel we have excellent locations,” Allen says. “We are a slow-growth acquisition company.”

Putting its reinvestment strategy to work, Stone Bros. embarked on a $15 million, 18-month revitalization of Sherwood Mall in 2004. The overhaul included the conversion of the former Montgomery Ward and Toys “R” Us space to create a unique big box wing that added Home Goods, Shoe Pavilion, Petco and Best Buy. Outparcel development included the addition of the region’s first Macaroni Grill, as well as Starbucks, Panda Express and Baja Fresh. A dramatic new exterior façade — complete with 30-foot grand entrances, rock columns and a massive header beams — was also added. Interior improvements included new floor tile, lighting upgrades, a children’s play area, interior landscaping and a new retail merchandising unit (RMU) program. An outdoor dining area called The Patio was created adjoining the food court.

Soon after the mall’s renovation was underway (it was completed in 2006) came a cosmetic upgrade of Robinhood Plaza, a 93,138-square-foot community center situated on Pacific Avenue next door to Sherwood Mall. The Ross Dress For Less-anchored center gained a fresh new tenant mix, including Catherine’s/Charming Shoppes, Aveda Beauty Salon, Nevada Bob’s Golf, Supercuts and Casual Male, as well as a sleek new design with an elevated and architecturally enhanced building façade, in addition to enhanced signage, landscaping and furnishings.

At the same time, Stone Bros. & Associates began feasibility and predevelopment work on Stonecreek Village, Stockton’s first lifestyle center, on the site of its Sherwood Plaza, a Kmart-anchored community center. A handful of Sherwood Plaza tenants moved to Robinhood Plaza before demolition started in February 2007.

Callison Architects’ rendering of Stonecreek Village, Stone Bros.’ new lifestyle center in Stockton, California.

Stonecreek Village was designed by Callison Architects as an oasis for Stockton’s upscale residents to shop, dine and relax.

“Sherwood Mall is different from Stonecreek,” says Romero. “The mall shoppers tend to be younger, and Stonecreek shoppers are older and have higher incomes.” The Stockton trade area has a current average household income of $73,000, according to Romero.

Stonecreek Village offers 161,000 square feet of street-level retail and an additional 30,000 square feet of second-level office space. The upscale tenant mix includes some of the region’s first locations for national retailers like Ann Taylor Loft, J. Jill, Coldwater Creek, Eddie Bauer, Jos. A. Bank, Cacique, BJ’s Restaurant and Brewhouse. Regional favorites such as Talbots, Lane Bryant and Juice It Up round out the tenant offerings.

Sherwood Mall interior remodel, with soft seating, rock columns, interior plantscaping, lighting upgrades and tiled flooring.

No expense was spared in the design of Stockton’s first upscale lifestyle center. With architecturally interesting elements like a water feature meandering throughout the project (including a man-made “Stone Creek”), pedestrian-friendly walkways and orchards to reflect the center’s Central Valley locale, the setting is sublime for savvy Stockton residents seeking relaxation and a true sense of community, all surrounded by the region’s finest collection of retailers.

“The amount of dollars we’re spending in construction costs alone makes this project unique,” declares Minson. “What we’re doing is trying to achieve a sense of place. We’re building four-sided buildings here, not just fronts. The costs are just unbelievable.” The current estimate for total buildout is just north of $225 per square foot.

Gayle Speare, property manager for all of the Four Corners properties, says it’s the sheer quality of retailers at Stonecreek that make it stand out. “The property leasing team, Crosspoint Realty Services out of San Francisco, has done a phenomenal job,” she says. “I think a lot of people might be scratching their heads, thinking, ‘Stockton? Why Stockton?’ But there has been incredible growth. Something like 25,000 new rooftops, and that growth has been driven by the high cost of living in the Bay Area.”

Allen agrees. “Stockton’s becoming a bedroom community of the Bay Area,” he says. “Stockton’s newest residents can often be heard saying, ‘I used to have X-retailer near my home,’ and now, in Stockton, where is ‘X-retailer’? We are filling that need.”

When all is said and done, Stone Bros. will have invested well over $50 million in the Four Corners to create Stockton’s “Main & Main” retail hub. It is a concept the company has worked on for 15 years, and the family has owned the land for over 50 years. Today, given the Stone family history, their foresight and vision, and the retail renaissance currently underway, Stockton is making quite a name for itself in retail.


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