Dublin, CA --- Big-box furniture giant Ikea is still coming to Dublin, but in a smaller package that will take longer to arrive.

Given a green light by the Dublin City Council more than a year ago to build a store at the Hacienda Drive interchange with Interstate 580, Ikea officials initially hoped to open a 317,000-square-foot store by fall 2006. The Swedish home merchandise chain's first Bay Area location, which opened with great fanfare in Emeryville five years ago, is a sprawling two-story, 274,000-square-foot structure.

Doug Greenholz, real estate manager for Ikea in the western United States, said the Dublin store will be 270,000 square feet in size. The retailer has retained plans to elevate the structure above a ground-level parking area.

"We are concentrating on making off-site improvements, including the roadway work and undergrounding of utilities," Greenholz said of power, sewer and water supply lines for the project. The site sits across Hacienda Drive from the popular Hacienda Crossings retail power center and opposite Dublin Boulevard from the Sybase Inc. campus.

To improve access around the development, Ikea is paying to extend Arnold Road south through the 27.4-acre site from its current terminus at Dublin Boulevard, as well as building a new street called Martinelli Way eastward to connect Arnold with Hacienda Drive.

New generation of stores Greenholz said the store was reduced in size because "the new generation of Ikea stores have design efficiencies" in both warehouse and retail display areas as compared to older stores, including Emeryville and the 300,000-square-foot location that opened in East Palo Alto two years ago. He added there's no correlation, however, between the size of stores and their sales volume.

A mammoth new warehouse and distribution center that now serves the retailer's West Coast operations also allows for smaller stores, Greenholz said.

Greenholz said Ikea is committed to the Dublin site as the third leg of its "three-store Bay Area strategy." The retailer is open to the possibility of building a fourth store in the region, he added, although there are no plans to do so.

"We are not in the land speculation business," he said of the Dublin site. "The only way we'll make money there is by building a store."

Chris Foss, Dublin's economic development director, said the city's approval did not include a specific time frame for completion of the Ikea store, but he hopes construction can begin this year, after the infrastructure improvements are finished. He said plans are proceeding for an adjacent development of specialty shops, home merchandise stores and restaurants.

The new specialty center will be called Emerald Place, a 137,000-square-foot complex occupying nearly half of the Ikea property. Most of that complex will be one story, although there will be a few two-story sections, said Jerry Hunt, co-founder, president and chief operating officer of Danville's Blake Hunt Ventures, developer of the project.

"We have spoken to a large number of retailers interested in our development," said Hunt, who would not name specific companies.

"We are planning something that will be a special gathering spot for the residents of Dublin and the Tri-Valley, not a typical neighborhood shopping center or power center." he said. "And we want a unique set of tenants that customers will not have passed by on the way to Emerald Place."

He did say, however, the focus would be on attracting food-oriented and home merchandise retailers as opposed to apparel shops, because the latter category is "well represented at other local retail centers." Hunt said his company hopes to have detailed plans for the center ready for city planners to review within several weeks.

"We want this to happen as soon as possible, although we want to be careful to make this the best-possible development," he said. "We plan to have it open by the first quarter of 2007."

Emerald Place will debut, he added, whether or not Ikea is ready to open its doors.

© 2005 East Bay Business Times