New Dollar Tree store thrives in Santa Rosa

While the fate of the nearly three dozen Dollar Tree ultra-discount stores in the North Bay remains unknown, the newest of those local locations opened even as the Virginia-based company was spending millions on deciding which sites nationwide to close.

The retailer opened a 14,700-square-foot location in a former Rite Aid drugstore space at 1793 Marlow Road in west Santa Rosa in January.

“The foot traffic there is higher than Rite Aid ever was,” said Dino D’Argenzio, part of the family ownership of the property as well as a partner at commercial real estate brokerage Keegan & Coppin Co. Inc.

The number of shoppers headed to that store is on track to reach 82,000 a month, D’Argenzio said. By comparison, the adjoining Safeway store attracts 130,000-150,000 customers monthly.

In the months leading up to its announcement about trimming hundreds of stores across the company, Dollar Tree Inc. was investing big on the 1793 Marlow location. Upward of $400,000 in tenant improvements were made in the six months before the store opened, and the retailer signed the lease at year-end, D’Argenzio said.

On March 13, the company announced it would be closing 970 Family Dollar Stores and 30 Dollar Tree stores in the next several years, including 600 Family Dollar Stores this fiscal year. The company hasn’t disclosed which stores are closing, but media around the country have been reporting closeout sales at dozens of locations.

There have been no notices of pending layoffs or reports of such sales at the 31 Dollar Tree locations in the North Bay. There are five stores in Santa Rosa, including four on the west side of the city, with one about a mile north at 3080 Marlow.

There are no local Family Dollar Stores.

Dollar Tree Inc.’s woes aren’t unique among discount retailers, as inflation has taken a bite out of shoppers’ budgets and retailers’ ability to keep prices low.

Less than a month after the Dollar Tree revelation, 99 Cent Stores announced it would close all 371 locations, in California, Texas, Arizona and Nevada. That includes five in Sonoma and Solano counties.

Safeway built its store next to the new Santa Rosa Dollar Tree location in 1983. The D’Argenzio family acquired the property next door the following year, building 23,000 square feet of shops. The 15,000-square-foot space in that center has seen several tenants, starting with a Sprouse-Reitz discount store, including a Ben Franklin Crafts site and for the last 15 years a Rite Aid store.

“But there is a lot of crossover of products between a Safeway and a Rite Aid,” D’Argenzio said. “Even Safeway has a pharmacy.”

Erlina D’Argenzio, a Keegan & Coppin agent specializing in retail real estate and who brokered the Dollar Tree deal for the property owners, said the market for such space has picked up considerably this spring from last year.

“A lot of what is going on is (for) fitness (businesses),” she said. “During COVID, they were scared to look for space because they had to figure out what business would look like. Now, we’re seeing fitness groups and therapy businesses out looking for space.”

Also in demand are spaces for dining.

“Any second-generation restaurant space on the market won’t last long,” she said. That’s because the cost of tenant improvements, especially water service and kitchen hoods, can run into hundreds of thousands of dollars.

And the time to get permits from the city of Santa Rosa has about doubled, from three to six months before the pandemic, she said.

Jeff Quackenbush covers wine, construction and real estate. Reach him at jquackenbush@busjrnl.com or 707-521-4256.