By Jeff St. John / The Fresno Bee
Can Forest City Enterprises deliver for downtown Fresno?
With billions of dollars in assets and a record of urban revitalization projects around the country, the Cleveland-based development company has earned a reputation for success.
But the company also has come under fire for using public subsidies to pay for its projects, as well as for pushing cities to force out existing property owners to make way for its mixed-use urban developments.
The Fresno City Council, which last month approved a preliminary Forest City proposal to build more than 700 homes south of Chukchansi Park, will wrestle with these challenges as it moves forward with the project.
Forest City's plans call for nearly $100 million in public funding for the first phase of its plan for six blocks of downtown Fresno. The $232 million plan also likely will require the city to use eminent domain -- its power to condemn property when owners are unwilling to sell.
In the heart of Oakland, a Forest City-led redevelopment project offers a glimpse into the challenges -- and potential rewards -- of the company's approach.
The Uptown, a $190 million apartment, retail and public park complex being built on four blocks, has taken nearly seven years, said Jens Hillmer, urban economic coordinator for Oakland's Redevelopment Authority.
The first phase of multistory apartment complexes still is being built today, but the architect's renderings inside Forest City's office show a mix of styles -- New York brick, Mesa Verde tan and Elmira white plaster facades with storefronts tucked into some first-floor spaces -- that will greet tenants when the first apartments open next year.
When it's complete, The Uptown will have 665 apartments, 9,000 square feet of retail space and a 25,000-square-foot public park, all expected to bring significant economic benefits to the city, Hillmer said.
That's important, because the city is covering about 20% of the project's total cost, either through investments in financing, environmental cleanup and infrastructure costs and by leasing city land to Forest City for free and rebating some property taxes until 2020, he said.
Oakland also has taken on the complicated task of using eminent domain to evict some former property owners, a process that slowed the project and increased its cost, he said.
Still, "I think it's key to have a sophisticated developer like Forest City behind a project" like The Uptown, Hillmer said.
In fact, he called Forest City an "absolutely essential" partner in negotiating compromises on the economic, environmental and community concerns that can keep many such projects from getting off the ground.
Hillmer is far from the first city official to heap such praise on Forest City, a company generally regarded as pre-eminent in the field of massive, mixed-use redevelopment projects.
Founded in 1920, Forest City has grown to hold roughly $9.2 billion in assets today, including 17 regional malls, 31 retail centers, 44 office buildings, 123 apartment communities and about 12,000 acres of developable land across the country.
"They're absolutely outstanding at what they do," said Richard Moore, a managing director of RBC Capital Markets. "I really don't think there's anyone better."
Moore, who monitors the company for investors and has visited many of its projects, said its specialty is mixed-use development -- projects that combine housing, retail and other developments. "There are very few [companies] that do what Forest City does," from smaller-scale projects like The Uptown to massive developments like one now under way at Denver's former Stapleton airport.
Continued on the next page >
E-mail story
Printer friendly page
Subscribe to Print
