Peet's brew to perk up downtown

The arrival of a national coffee shop has landlords envisioning a renaissance of B Street while independent coffee shops brace for the worst.

"There are a lot of companies that took a wait-and-see attitude after the theater was completed and there are a number of quality business now looking to open up in downtown San Mateo," said Ken Constantino, owner of the building at the corner of Third Avenue and B Street.

Names like Panda Express and Morton's Steak Shop have been floated around, Constantino said.

Constantino understands the threat a large company like Peet's poses to small businesses and argues there's enough coffee drinkers to support everyone.

"I'm concerned for all small, independent business owners, but downtown needs a mix of smaller and nationally known retailers," Constantino said.

Peet's is expected to open in three to six months. Constantino expects smaller businesses to survive just as they've done with the arrival of Starbucks on Broadway in Burlingame.

Its arrival could encourage other big names to take up shop at two shops at the corners of Second Avenue and B Street. The liquor store at the southwest corner is planning to relocate closer to Fifth Avenue. Environment Skate Shop, at the northeast corner, lost its lease and plans to relocate to a smaller space.

"I think B Street is about ready to undergo a renaissance with the corner units available," said Gary De Santis, owner of the building housing Environment Skate Shop.

The enthusiasm isn't so great among independent coffee shop owners.

Three Bees Coffee Shop, across the street, will be in direct competition with the new Peet's. Owner Rafat Haddad said he's up to the challenge but is still worried about the future.

"I have nothing against the competition, I believe in my product and my business," Haddad said.

Three Bees has been in business for more than three years at 224 E. Third Ave., which was a coffee shop for seven years prior to its opening. Haddad is going to stick to business as usual and size up Peet's when it arrives.

Bean Street Coffee, at 359 B St., also opened about three years ago and owner Riyad Khoury is disappointed with the news of Peet's arrival.

"I feel bad that the city has failed small businesses. I think it's the wrong way to go," Khoury said.

Bean Street has built a reliable clientele since it opened three years ago and Khoury is hopeful those customers will remain faithful. He's also confident that'll they recognize the individuality of small businesses compared to a national chain.

"You go into Peet's and it's always the same thing," Khoury said. "It's cookie cutter and predictable."

Khoury and Haddad plan to keep a close eye on Peet's and hope for the best.

"You know competition is always good," Haddad said. "I just hope their intention is not to kill small business."

Dana Yates can be reached by e-mail: dana@smdailyjournal.com or by phone: (650) 344-5200 ext. 106. What do you think of this story? Send a letter to the editor: letters@smdailyjournal.com.