A client once remarked to Margarita Alvarez that all of San Diego's fruit and vegetable vendors would eventually move to the edge of downtown. That prediction, made in the 1970s, surprised Alvarez, the assistant board chairman of Coast Citrus Distributors Inc. "I said, 'The edge of downtown?' " she recalled. "We're at the edge of town." At that time, Alvarez could not imagine that a convention center, clogged traffic, a renovated Gaslamp Quarter, and other redevelopment would crowd the produce suppliers clustered in downtown's East Village.

One by one, older and larger merchants left the neighborhood: Moceri Produce to the Morena district in 1972 and Brothers Market Inc. to Chula Vista in 1989. Coast Citrus followed in 1993, going beyond the edge of town -- to the edge of California -- by opening a big warehouse in Otay Mesa. However, to serve grocery stores and restaurants in San Diego, Coast Citrus maintained a small warehouse at 401 Sixth Avenue.

The closing of that warehouse last month -- precipitated by the city's plans to spend more than $300 million of taxpayers' money on a baseball stadium for the Padres -- marks further disbursement of an industry that helps feed San Diego.

The Centre City Development Corp. has ousted about a dozen produce distributors via eminent domain. Some of the dozen remaining businesses plan to leave East Village though they are not forced to do so.

Before eviction commenced last year, 26 fruit and vegetable merchants downtown employed about 400 people and generated estimated annual sales of $100 million. Two years ago, they petitioned Mayor Susan Golding, the Padres, and Centre City Development Corp. to help them establish a produce district similar to the one in downtown Los Angeles. By regrouping close to each other, they reasoned, they could better compete against wholesalers from Los Angeles. In the end, lack of consensus and government leadership scattered the merchants.

The industry has not been welcome downtown for years, observed H. Wilton Williams, whose family began buying and selling apples, pears, onions, and potatoes there in 1893. Long before talk of a sports stadium, Williams and his colleagues were plagued with parking tickets, health inspections, and regulatory snafus. "The city won't admit that they're trying to get the wholesale people out of here," Williams said, "but they've enforced every code you can think of to get people to move." Such petty harassment made it easy for Williams to sell the historic TR Produce warehouse at 808 J Street to Padres owner John Moores in 1998. Williams AG. Commodities Brokerage Inc. now operates in nearby Barrio Logan, the new home of other displaced peddlers of fruits and vegetables.

Jim F. Philippo, president of Imperial Produce Corp., is among suppliers that moved to Chula Vista. Like many business owners, Philippo was disappointed by Centre City Development Corp.'s relocation services and offers of reimbursement. Consequently, some claims are mired in negotiations or litigation. "To me, any amount of compensation is not adequate. I was very comfortable downtown and making money," Philippo said, noting that East Village was convenient to many restaurants, grocers, military commissaries, and ships. "Now I must deliver to them. It's very hard to find new customers when you move." In addition, the neighborhood's concentration of wholesalers enabled them to buy from each other when they ran low on certain items. The value of that support system is almost impossible to measure. "In three months alone, I've lost about $18,000."

Uncertainty about where to move caused the most stress, Philippo said, complaining that replacement sites suggested by the city were either too large, too small, or lacked refrigeration. "I extended my search all the way north to Miramar," he said, referring to the current location of Moceri Produce near the military base, "and all the way south to San Ysidro. I didn't want to move south and be the only one there when everyone else was moving north."

John Kladouras, 73, had such difficulty finding a location and was so distraught by indecision, he didn't budge despite repeated warnings from the city, an extended deadline, and a court order. A sympathetic colleague made space for John's Produce in Barrio Logan at the last minute. The hasty, round-the-clock move in February ended with sheriff's deputies barring Kladouras and his wife Jeanette from turning off the electricity, disconnecting telephones, or retrieving personal belongings from their office. Although John's Produce had operated at 645 K Street for 26 years, the business's month-to-month lease prevented Kladouras from getting much compensation. In San Diego eminent domain proceedings severely limit claims of lost goodwill for businesses on short-term leases.

"I'm not happy with the way the city handled this. They destroyed the businesses for baseball. They made pleasure first," Kladouras said. "I never went to the Padres games. I worked all my life."

Shabby treatment of small business owners reflects a much bigger problem, which is lack of vision, says former city councilmember Tom Hom, whose family operated David Produce in East Village from 1918 until 1997.

For several decades, city officials have failed to recognize the importance of creating a central fruit and vegetable market, Hom said, explaining such an institution could strengthen the local produce business, reduce competition from Los Angeles, and attract buyers and sellers from Mexico. "Selling fruits and vegetables has been a natural element of business since ancient times," he said. "These are perishable items -- no one can carry everything -- so they gather in a common area. This is true in other major cities, but not in San Diego."

In the 1980s, Hom's real estate development company designed a produce exchange for Otay Mesa that would have been linked to the then-proposed twin-city airport for San Diego and Tijuana. Hom isn't trying to revive that particular pet project, which was killed by a recession, he said, but he thinks the city should consider supporting a central market. "If they can build a ballpark, they can build this." Two years ago Hom encouraged Centre City Development Corp. to acquire or set aside land for produce merchants to be uprooted by the stadium.

Hom's advocacy and the merchants' petition prompted Centre City Development Corp. to conduct meetings last year, organize neighborhood tours, and earmark $1.3 million for such a project. After several sites were identified in Southeast San Diego, city council approved a rezoning that would accommodate fruit and vegetable distribution; but neighborhood residents protested that use.

John Armenta, a consultant hired last year by Centre City Development Corp., said the baseball stadium's destruction of an old business in a historic neighborhood might be a blessing in disguise. Many of San Diego's produce distributors need a modern terminal with properly sized storage space, loading docks, and truck bays, he said, noting the facility could spawn a truck stop, fueling station, hotel, and other commerce. "They're in such old buildings. I don't know how the health department lets them operate," said Armenta, a former manager of the Los Angeles Produce Market.

"San Diego is losing out. I never noticed that until I went down there to those meetings in San Diego." During his stay at a downtown hotel, Armenta asked a produce deliveryman where he was from, and the answer was Los Angeles. "Truckload after truckload of produce crosses the border from Mexico, comes up here to Los Angeles, and goes back to San Diego."

Local merchants estimate that Los Angeles distributors now supply about half of the produce consumed in San Diego. In the mid 1980s, annual sales by fruit and vegetable wholesalers countywide surpassed $300 million, according to a 1988 U.S. Department of Agriculture report. Rivals have emerged from the so-called full-service companies, such as Alliant and Sysco, that sell all varieties of food along with produce. Many national supermarket and restaurant chains have eliminated local purchases of fruits and vegetables.

"The produce industry has changed dramatically in the last ten years. The competition is fierce in San Diego, and there's no cohesion among the local companies at all," said Dominic Moceri, president of Moceri Produce. "The big issue isn't that produce vendors are moving out of downtown. The big problem is that there are locally owned hotels, restaurants, and grocery stores that aren't supporting the local produce vendors. Some of these businesses are members of the San Diego Chamber of Commerce, and they're buying produce out of the Los Angeles market."

Given such fragmentation, Moceri questions the effectiveness of a large produce terminal in San Diego, but he is not opposed to the concept.

Redevelopment in the East Village probably represents the city's last chance to reclaim a business that's being lost to Los Angeles, say Tim Crabtree and Mohammad Zaidi, co-owners of Premier Produce Co. at 526 J Street. "San Diego is one of the nation's biggest cities. We have growing markets in the Imperial Valley and Mexico," Zaidi said. "We made it very clear that we need to be together and we need to be near downtown. Now people are going in different directions."

A year ago, Premier was optimistic that the city would help relocate the produce suppliers as a group. Now Premier is preparing to move to Chula Vista by year end. "There was a whole lot of lip service to pacify everyone," Crabtree said. "The city did nothing, and now it's too late."