Though increasingly crowded with retail development, including brand new Plaza Escuela, downtown Walnut Creek is still a powerful draw for upscale retailers of all sizes.

A case-in-point is Perry Tell, a high-tech consultant who's taking an entrepreneurial leap into retail. "We looked at locations in San Francisco, Berkeley and various parts of Walnut Creek. Plaza Escuela turned out to be the place that made the most sense for our business," he said.

Affluent demographics in the city and surrounding areas, as well as its central location, helped make downtown highly resistant to the recession.

Despite the poor economy last fall, Tell and his wife, Elizabeth Wen Tell, decided to proceed with opening Elisa Wen, an upscale purveyor of women's and children's apparel. Temporarily at Walnut Creek's Broadway Plaza during the holiday season, the pair moved a few weeks ago into permanent digs – a 2,200 square foot boutique at Olympic Boulevard and Locust Street in the heart of downtown Walnut Creek's latest commercial development.

"The owners really understand our vision and the fashion business," said Tell. "We're not the Gap, but they decided to take a chance on us anyway."

Plaza Escuela will feature 164,000 square feet of retail and office space that should be finished and fully leased by late spring or early summer. It is being developed by Walnut Creek's Blake Hunt Ventures on a site just west of Broadway Plaza.

While one anchor tenant, a 25,400 square foot branch of The Container Store, made its debut last fall, a 40,000 square foot Andronico's Market is scheduled to open in May. Other tenants that have opened include Verizon, Men's Wearhouse, a Mephisto shoe store, MaggieMoo's gourmet ice cream shop, Pasta Pomodoro, a California State Automobile Association travel shop and Brennan's California Home, an upscale home furnishings store that left Orinda for Plaza Escuela.

Ann Taylor Loft, a lower-priced version of the women's apparel chain, has just announced plans to open this spring in Plaza Escuela. The complex also features a multiple level, 635 space parking garage. In addition, across Olympic Boulevard, Century Theatres just broke ground on a 14-screen cinema complex that's scheduled to open early next year in Olympia Place, which will also feature office space.

"We have one really good spot left, a 5,800 square foot space next to Ann Taylor Loft," said Tom Archer, a Cornish & Carey commercial broker who's part of the leasing team for Plaza Escuela. "We are working with several national retailers to fill that spot."

Negotiations are also under way with a nationally known restaurant chain to move into the development, Archer said, though he declined to be specific about the company.

Archer said he feels Plaza Escuela complements rather than competes with nearby upscale retail centers, most notably the 90 store Broadway Plaza and Broadway Pointe, a Main Street-style development.

Jim McMasters, a broker in the Walnut Creek office of Colliers International and longtime observer of East Bay retail, doesn't think there's a glut of upscale retail in the city's thriving downtown area, even with the addition of Plaza Escuela.

"A lot of the stores moving in are not in categories already well represented in the downtown area," he said.

However, he described Plaza Escuela as an "urban-style" project that may exacerbate some of the suburban-style problems in the city's increasingly congested central district. "When all the stores and movie theatres are open and office space filled, you could have a real gridlock problem down in that area," he said. "I don't think the parking included in the project will be enough to serve the parking needs of that area, either."

Despite the congestion and rents ranging from $30 to $80 per square foot a year in Walnut Creek's core area, McMasters said he doesn't expect the area to lose its crown as the upscale retail capital of the East Bay. Annual lease rates for Plaza Escuela range from $40 to $50 a square foot.

"Retailers still feel there's a lot of money to be made in downtown Walnut Creek," McMasters said.