Home Depot lost its two-year-long bid Tuesday to build a second home improvement store in southeast Pleasanton as part of a major 200,000-square-foot retail development at Bernal Avenue and Stanley Boulevard, across from McDonald's.

Members of the City Council, after hearing more than two hours of often hostile complaints about Home Depot and its proposed second store location, said the big box store was being proposed for the wrong site and would be bad for Pleasanton.

If anyone favored Home Depot, they weren't in the packed City Council chambers for the so-called workshop discussion. Scores of speakers followed one another to the lectern to talk against Home Depot, citing new traffic studies that showed 25 semi-trailer trucks would make deliveries to the store each day, and also new financial studies that showed the financial benefits to Pleasanton would be minimal.

Two representatives of Home Depot were in the audience, but did not speak. They left the presentation of store plans and the colorful, architecturally-inviting Gateway shopping center it would anchor to Pete Knoedler of Regency Centers, a commercial center development firm.

Knoedler was visibly shaken by the decision, especially by the harshness of some comments from homeowners who live near the proposed site and by Councilman Matt Sullivan, who said the project "doesn't make sense for that location and doesn't make sense for our local economy."

"It's clear to me that this is a bailout plan for Home Depot," Sullivan said. "They are going to lose business (at their Johnson Drive store) to Lowe's but would be ahead by 22 percent with this second store. Meanwhile, our local home improvement stores would lose 16 percent of their business."

"This site is probably the worst place in town where we can think of building a big box retail development," he added. "Sometimes a project comes through and you look at it and say this project is not a good one for Pleasanton. This project fits that bill exactly."

Although Tuesday's meeting was a workshop and no votes were taken, it was clear Home Depot and the Regency Center plans were dead in the water. Mayor Jennifer Hosterman and three council members--Sullivan, Cheryl Cook-Kallio and Cindy McGovern--said they would not vote in favor of the second reading of an ordinance that early on approved the project. Councilman Jerry Thorne, who supported the first reading of the ordinance, left Tuesday's meeting early because of illness and missed much of the discussion.

The turnabout was particularly devastating for Knoedler, who has tenderly and cautiously nursed the Regency Center project along. He won a 4-1 approval of his plans from the Planning Commission; the city's Economic Vitality Committee unanimously endorsed the project, and the City Council voted 4-1 to approve it two months ago, with Sullivan casting the only negative vote.

But because of mounting opposition from neighborhoods along Valley Avenue and Santa Rita Road that feared excessive noise from delivery trucks and higher traffic volumes from Home Depot customers, the council ordered a cooling-off period, using the time for a series of roundtable discussions with city staff. It was during this long delay that opposition grew, especially as new studies showed Regency's and Home Depot's estimates of tax revenue to be gained from sales and promised controls over heavy truck traffic began changing. By Tuesday's meeting with the full council, it was clear Home Depot had lost the battle.

Although Hosterman encouraged Knoedler and Regency to bring back conceptual plans for developing the long-vacant corner, which is across from McDonald's on Bernal at Stanley, Sullivan was not supportive. He said the council should give the site a rest until after the council adopts a revised General Plan, now under consideration, and develops an East Side Specific Plan that could include the Regency site, which is owned by longtime city landowner and developer Frank Auf der Mauer. That could take several years if not well into the next decade.

Since the council did not vote on the second reading of the Regency approval ordinance, it will take up the application for final consideration and hold another public hearing on Jan. 15.

"At that time, the council may also wish to consider alternative actions based on the expanded public review process and continued public opposition to the project," said City Manager Nelson Fialho.

Those alternatives could range from denying the project as submitted and moving on, or allowing for reconsideration of the retail development other than a Home Depot. This action would keep alive Regency's proposals for a Longs Drug Store, coffeehouse and small retail stores.

Another alternative would be to include the property into the yet-to-be-started East Side Specific Plan process, a plan that would take 24 to 36 months to complete.

Knoedler said he will meet with his development team in the coming weeks to determine what action Regency might take, if any, to revive its project plans.

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