Thoughts on the mall and redevelopment models

Posted by George Hostetter on February 24, 2014 

A handful of thoughts on Fulton Mall:

* Work to rip up Fulton Street between Inyo and Tuolumne streets began on March 31, 1964. Mayor Ashley Swearengin says one of the big reasons she wants cars returned to this stretch is to give Fulton Corridor’s classic high-rise buildings a fighting chance of survival.

There are seven historic high-rises along the mall’s six blocks: Helm Building (built in 1914), Bank of Italy Building (1917), Mason Building (1918), Mattei Building (former Guarantee Savings) 1920, Pacific Southwest Building (former Security Pacific) 1923, T.W. Patterson Building (1923), Radin-Kamp Building (former J.C. Penney) 1924.

Most are empty or under-utilized. They have spent more time looking down on a pedestrian mall than on a Fulton Street with cars.

* Downtown Fresno Partnership Chief Executive Kate Borders has a color postcard of downtown Fresno. Based on the photo’s cars, the year is probably 1951 or 1952. The photographer was standing in the middle of the Fulton-Inyo intersection, looking north on Fulton.

The sidewalks are wide. Cars are parked parallel to the curb as far as the eye can see. There are two lanes headed north and two lanes headed south. There’s not a tree or piece of public art or bench to be seen.

The postcard shows a downtown of no value except as a bustling center of activity.

* The scuttlebutt at City Hall is the row of buildings with the Partnership’s headquarters (west side of the mall, near Inyo Street) has the interest of several local developers. They might turn the area into a mixed-use project of commercial tenants on the bottom and residential tenants on top. These mixed-use projects are found throughout Uptown.

I understand City Hall owns these buildings.

* That brings us to a recent decision by a Superior Court judge in Sacramento. The case was a lawsuit filed by Fresno City Hall and its Successor Agency (the old Redevelopment Agency). The defendants included the state of California.

At issue was the complex nature of Gov. Jerry Brown’s dissolution a few years ago of some 400 redevelopment agencies, including Fresno’s, as part of his budget-fixing plan. It’s sufficient here to note that something had to be done with the old Fresno RDA’s housing assets: $17,880,383 in cash; $12,906,497 in receivables and advances; and $10,682,955 in property held for resale.

That’s a total of $41,469,835 in assets.

The city in early 2012 transferred these assets to the city’s Housing Successor Agency. The City Council is in charge of this agency.

The state said these assets should have gone through the local Oversight Board (which sometimes doesn’t see eye-to-eye with City Hall) before going to the Housing Successor Agency. The Oversight Board might have said some of that cash or property belonged not to the Housing Successor Agency but to other taxing entities (Fresno County, special districts, etc. as well as City Hall).

The Oversight Board didn’t get off the ground until later in 2012.

City Hall in the lawsuit said it played by the rules. The $41.5 million in housing assets should stay where they’re at, the city said. The state and the Oversight Board should stay away, the city said.

The Sacramento judge said City Hall is right.

6.) This means the Fresno City Council and the Swearengin Administration are moving slowly but surely toward the creation of a whole new way of being a player in the development business.

The old model was based on the Redevelopment Agency. Tax-increment funding over some 60 years made the city’s RDA a huge factor in the redevelopment of older neighborhoods. The RDA’s wealth, power and scale produced a lot of enemies. But the agency was always beloved by anyone who landed on the Council dais or in the Mayor’s chair.

Then the RDA was killed by Brown and the state legislature. City of Fresno officials publicly asked: How do we pursue inner-city revitalization efforts without a mechanism of financial incentives for private-sector developers who otherwise would shun struggling neighborhoods?

Swearengin created a task force to find answers. Council Member Lee Brand got the council’s Finance and Audit Committee to hold hearings on the matter.

What we know for sure now is:

1.) Brand is pitching an initiative that would create a data base on the 1,000-plus real estate properties owned by the city. Surplus properties might be sold. Some of the proceeds might go to the general fund.

2.) Brand’s initiative would permit the city to hire a nationally-recognized municipal real estate management firm to create a strategic plan for the city’s real estate.

3.) The initiative’s data base will include property owned by the Successor Agency and the Housing Successor Agency (both overseen by the City Council).

4.) The Successor Agency has about 100 properties. These, according to state law, must be sold. Proceeds will be distributed to taxing entities. The expert real estate management firm most likely would do the selling, with council direction.

5.) The Housing Successor Agency has about 100 properties. The cash and receivables are to be used for affordable housing projects. The properties are to be used for affordable housing projects. All proceeds from these projects are to be plowed back into affordable housing projects. In other words, City Hall now has a perpetually revolving account valued at $41.5 million for housing projects that the old RDA would have done. The expert real estate management firm most likely would be a consultant in this area.

If Swearengin gets her way and Fulton between Inyo and Tuolumne is reopened to cars, she and the council could be in prime position to help developers do affordable mixed-use projects along that six-block corridor as soon as 2015.

That would be very visible action in a short amount of time — the kind that might blunt a lot of criticism.

 

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