When Al Lazzareschi and Dr. Elwood Kronick began buying property and building on it in downtown Walnut Creek in the early 1960s, the city was a small bedroom community.
A Greyhound bus station and ice cream shop sat at the northern end of Main Street, and the modest Broadway mall anchored by Lucky’s supermarket was at the other end of town, near the intersection of Main Street and Mt. Diablo Boulevard historically known as “The Corners.”
“In those days,” said Kronick, 76, who still practices medicine, “they were happy to have you build things.”
Kronick built his first office on North Main Street near the former Rinehart’s Jewelry store when Kaiser was the only hospital in town. He worked with three other obstetricians until 1990, when they moved to La Casa Via, near John Muir Medical Center.
Craig Lazzareschi, who runs the family real estate business started by his 93-year-old father, Al, agrees it was much easier to get things built quickly in the old days.
“You used to be able to go to the city and get your plans stamped that day for construction,” said Craig, 60, who grew up in Alamo and now lives in Moraga. “There was a Planning Commission, but there were very few bodies you had to go through.”
As Walnut Creek has grown, city planners and leaders have tightened the design review process, working with developers to create one of the most highly praised downtown retail districts in the Bay Area.
A handful of locals such as Lazzareschi and Kronick have benefited from prudent property purchases that have brought escalating profits to them and their families while the city evolved into a shopping and office hot spot during the past 40 years.
The city’s success has brought bigger investors to town who are vying with old-timers in what has become a Walnut Creek version of Monopoly. Longtime property owners are in good strategic positions to negotiate lucrative deals because of the limited number of downtown parcels available.
“It’s certainly been a smart investment for the owners who’ve invested here,” said Walnut Creek commercial real estate broker John Cumbelich, 42. “That’s not to say you can’t make your pot of gold in other markets, but Walnut Creek has offered a level of consistency and appreciation that is hard to match in other markets.”
Family foresight also has fueled financial good fortune for a half-dozen others who have purchased and developed property in the city and are likely to continue influencing Walnut Creek’s evolution.
About 30 years ago, Paul Cortese bought the Walnut Bowl site, where a 24-lane bowling alley operated near Broadway Plaza, which was not as upscale then. He transformed the property into the Main Street Plaza.
The Cortese Investment Company in Lafayette now owns everything in the mall except the Ross store.
“I think it was a very smart idea for my dad,” said Steve Cortese, 46, who lives in Orinda. “Even then, it was a good location. You had Broadway Plaza, but it was different. Macerich hadn’t come in and developed it. You had Simon Hardware across the street.”
At the time, Mark Hall and Brian Hirahara — two Walnut Creek boys with fathers in the real estate and development business — were also soaking up investment savvy.
Hall, 47, learned the ropes from his father, Merle, who was a Walnut Creek City Councilman in the early 1980s. Mark Hall joined Merle Hall’s real estate investment business in the late 1980s, acquired his father’s interest about eight years ago, and renamed the company Hall Equities Group. His brother Joe, 41, is a company agent and director.
Mark Hall jokes that his career path was ready-made.
“I was conscripted, basically,” Mark said dryly. “Slave labor.”
Hirahara, 43, grew up under the tutelage of his father, Tak Hirahara, who was a partner with Dan Christopoulos in the C&H Development Co., before Tak Hirahara established his own Lamorinda Development & Investments. Brian Hirahara worked with his dad and sister Dina Honda for about a decade, then started his own BH Development company a few years ago.
“I love downtown Walnut Creek,” said Brian Hirahara. “I work here. I’m very involved here. I live seven minutes from downtown, so I spend a lot of time here.”
Basil Christopoulos, 45, became president of the C&H Development Co. in Walnut Creek about seven years ago, after his dad retired. Basil Christopoulos, who lives in Piedmont, said the company bought the building the Hubcaps restaurant leases in 1985 and the retail building between Talbots and Tiki Tom’s in March for just less than $4 million.
Like his counterparts, Basil Christopoulos had real estate in his blood.
“It was kind of ingrained, having kind of grown up with it,” said Basil Christopoulos, who majored in real estate at University of Southern California. “It was always part of the life. I was one of the few people going to college knowing what I wanted to do.”
Although the insiders in Walnut Creek’s circle of downtown developers and property owners know one another well, they tend to keep a low profile.
Garo Keadjian, who bought his first downtown parcel in 1980, has remained largely in the background while quietly buying property that is now adjacent to newer projects, which propel his values higher.
“I am no particular genius,” said Keadjian, 70, an Armenian immigrant who fled from Turkey with his family and grew up in Egypt. “The harder I work, the luckier I get.”
The game has changed as big-bucks players from out of town have joined locals on the board. In 1985, the Santa Monica-based Macerich Co., which has assets of about $15 billion, bought Broadway Plaza and brought in Nordstrom, catapulting the city’s status as a regional destination.
Higher values rippled over nearby properties. The 1998 development of Broadway Pointe across Mt. Diablo Boulevard created a center of town that became ground zero for premium property sales and rental rates, Lazzareschi said.
“If you’re at ground zero, you have a much more valuable product,” he said. “If you fall away from ground zero, you have a less valuable property.”
Property such as Lazzareschi’s Empire Realty and Viking Home Chef buildings, which are “in the line of sight” to Broadway Plaza, rented for about $28 a square foot in the 1980s, he said. Now retail sites in the area command as much as $84 a square foot, according to Lazzareschi.
Cumbelich said some downtown lease rates have doubled just in the past five years. Newer players such as Patson Development Co. from San Francisco and Blake Hunt Ventures from Danville have pushed property values higher, partnering with big-bucks financial backers to purchase property at premium prices.
Blake Hunt developed Plaza Escuela and Olympia Place, then stunned the community by paying $8.5 million for the former Traditions Furniture store on Olympic Boulevard two years ago.
“While it seemed like a high number at the time,” said Brad Blake, 49, of Alamo, “in hindsight, it was a fairly reasonable deal, given where properties are trading at today.”
The company has leased the building to Urban Outfitters and Lululemon Athletica and has no asking price. Instead, Blake said he’s waiting to see what offers he gets because the market continues to surprise people.
Patson, headed by David Harrison and Ian Paget, made its first mark on Walnut Creek with Barnes & Noble. In partnership with a New York Real Estate Investment Trust, the company purchased the Mark Morris Tires site earlier this month for nearly $6 million and is preparing to build a retail project that will add to the city’s cachet.
“The rents certainly are high, and the costs of doing the development are going to be high,” said Paget, 58, who immigrated to the United States from England in 1978 before starting Patson with Harrison in 1984. “We believe our costs will work very well with where the rents are going.”
Family ties
Long before Walnut Creek attracted big-city investors and developers, Al Lazzareschi constructed his first project, called “The Cralyn Building,” named for his children, Craig and Lynne, in 1962. He later sold the building that now houses the Kitchen Table store on North Main Street.
“My father has always been very smart and insightful,” said Craig Lazzareschi, who took over operations for the family’s Greater Bay Development Company in 1981. “He knew the way the market was going and he knew how to make money, and that’s the gift that he has given me.”
Craig said he and his father have developed 14 office, retail and medical buildings and sold some, reaping profits through the years. The company has bought and sold about 10 other properties.
Now, Lynne’s son Jed and Craig’s sons Marc and Ben share financial interests in the business, which owns five major downtown properties, including the BuonAngelo and World Savings office buildings on North Broadway, near Nordstrom.
Hall advises many financial partners, including Kronick. Together, they purchased more than a dozen parcels along Mt. Diablo Boulevard and Sharpe Avenue, the city’s gateway from Highway 24.
“We have assembled that property over the years for purely investment purposes, and we’re perfectly comfortable continuing to own the property just as it is,” Hall said. “However, if the opportunity would present itself, we would also look at redeveloping the property.”
Kronick shares financial interests in his properties with his sons John, 40, an orthopedic physician, and Ben, 43, a property manager.
“I think Walnut Creek is great,” Kronick said. “Being a child growing up, I remember hearing buying real estate is better than buying stock. So, I figure when I have a few extra dollars, I buy some property. It’s not like I’m a developer flying in from Beverly Hills. I was born here.”
Brian Hirahara also exudes hometown pride when he talks about the Corners, which many consider to be Walnut Creek’s signature redevelopment project. His’ company retains ownership of the prominent retail buildings, which include high-paying tenants such as Tiffany & Co., Apple and Tommy Bahama’s.
“If we do a good job, it can have a positive impact on the feel and character of an area,” Brian Hirahara said. “The nature of development is that we are building projects that will be around for years to come. This can be very rewarding, but it also comes with a lot of responsibility. I hope that my children never ask, ‘You built that, dad?!'”
Brian Hirahara, who has a 2-year-old daughter with his wife, Lyn, and a baby on the way, now wants to develop the city-owned vacant veterans building site next to his property. He would like to build a project that would complement the Corners, which has an oasislike oak-tree courtyard with a koi pond that he overlooks from an office above the Va de Vi restaurant.
“I’d like to create something unique and unexpected,” Brian Hirahara said with a smile. “When I walk down there and I see people that have wandered back to the oak tree and their kids run up to the pond and they go, ‘Wow!’ — that’s what gives me the best gratification.”
Brian Hirahara fought a redevelopment project proposed by Blake Hunt Ventures on the Veterans site because he didn’t think it met city guidelines. The City Council rejected Blake Hunt’s proposal, and Hirahara is now talking to the city and Keadjian, who owns the nearby Diva clothing store parcel, to work out a project the council would endorse.
Keadjian, a retired jeweler who lives in Orinda, is sitting on two potential gold mines. One is the Diva site, which is nearly surrounded by the newer, more upscale Olympia Place and Plaza Escuela projects across the street.
The other is the Locust Street Post Office and Nail Shop buildings, which could be redeveloped as part of an anticipated project on the Mark Morris site next door.
Keadjian now owns at least six key parcels.
“When you own property, every week you get calls from people who have a ready, willing buyer and make some ostentatious offer,” Keadjian said. “Half of them are really maybe hot air and half serious. My pat answer is that we are not interested in selling, and that stops a lot of the wannabes.”
Keadjian said he was 20 when he came to the United States penniless with his older sister and her husband. His first Walnut Creek project was a jewelry store in the North Main Street building now occupied by Pomegranate restaurant. He worked there for about 15 years before retiring to manage his properties.
Keadjian said he paid about $12 to $18 per square foot for the property.
“Everyone told me I overpaid,” Keadjian said. “I really don’t remember the exact price, but obviously, by today’s standards, it was a steal. At the time, everybody thought I was a sucker.”
With lease rates in the prime downtown area around Broadway Plaza ranging from $95 to $105 per square foot, Basil Christopoulos said he’ll have no problem making his money back in the long run on the Olympic Boulevard building he recently purchased. He plans to spend more than $225,000 upgrading it for new upscale tenants and hopes to sign a deal in the next few weeks.
Walnut Creek property rates will continue to soar because the city’s upscale retail niche is like no other in the East Bay, Christopoulos said.
“I don’t think there’s any stopping it,” he said.
As Kronick looks around the city now, he said the former “creamery” building that was next to the old Greyhound bus station wouldn’t fit in anymore.
“People would say it’s ratty and not very nice,” Kronick said. “There’s always progress, and everything they build is better than the last. I guess change is inevitable. I guess you want to have it better for your kids than you had it.”
Theresa Harrington covers the Walnut Creek area. Reach her at 925-945-4764 or tharrington@cctimes.com. News researchers Camille Donaldson and Beverly Hunt contributed to this story.
