Sell a golf course? Lease a Japanese restaurant? Fresno looking at creative ways to raise cash

Like any big city, Fresno is high on needs and short on cash.

What to do?

At City Hall, everything is on the table short of checking under couch cushions. And so far, city officials think the possibility exists to generate millions through things such as selling excess properties, allowing digital billboards on city-owned land, getting out of bad leases and putting some areas to better use.

“This is a revenue stream I think could be well used by the city to make the quality of life better,” Council Member Lee Brand said.

A city-hired consultant has even put a dollar figure on the potential cash windfall – and the amount is impressive. It most likely is more than $50 million and quite likely could exceed $60 million.

Some of the consultant’s suggestions are unrealistic, city officials said. Others would no doubt be controversial and likely wouldn’t happen without a fight – if at all.

For instance, should the city sell off the Riverside Golf Course? It’s now one of Fresno’s two municipal courses but is also a prime piece of real estate along the San Joaquin River that the consultant estimates could fetch between $27.5 million and $33 million on the open market, most likely for high-end housing. But does it pencil out financially? And how much would residents around the course object?

Other ideas seem obvious, such as getting the Fire Department out of its current building at H and Tulare streets across from Chukchansi Park, where it is making more than $600,000 in annual lease payments. Brand and City Manager Bruce Rudd said that money could instead go to building and paying off a new combined headquarters for the city’s police and fire departments.

It is even a possibility, estimating a $1.8 million cost to build the headquarters, that the building could be paid off in as little as three years. The $600,000 saved from the fire department’s lease payments could then be used for another need, such as a new maintenance facility for fire trucks. As for the current Fresno police headquarters – which the department gets rent-free – that could then be leased out to generate more revenue.

Popular or unpopular, the city needs to look for every dime it can find just to meet community expectations. Police Chief Jerry Dyer wants to add officers and rebuild the department’s civilian work force. Fire Chief Kerri Donis wants more firefighters and to add a station. Parks advocates want more open space, especially in poorer parts of the city south of Shaw Avenue. Existing parks have maintenance needs.

Looking out five years, Rudd said, there isn’t enough money to meet the demands.

“There are just so many competing priorities and needs that we owe it to the community to explore every opportunity to generate net new revenue without necessarily asking (residents) to write a check,” he said.

Among the key findings in the report, which will be discussed in a Fresno City Council workshop Thursday afternoon:

▪ Develop the maintenance yard at Woodward Park, adjacent to the Shinzen Friendship Garden. A building could be constructed that could be leased, for example, as a Japanese restaurant. The lease payments could in turn be used for Woodward Park maintenance and capital improvement projects. Parts of the park – including mature trees suffering under drought conditions – are not irrigated, officials said. That could be fixed.

▪ Sell off vacant city property, which the report estimates could generate up to $26 million. Among those are 20 acres at Herndon and Brawley avenues in northwest Fresno that could be sold for $6 million or more and be developed for retail or office, and 16 acres at Behymer and Chestnut avenues in northeast Fresno that are worth around $5 million and could be developed for houses. There are some questions here, as Rudd pointed out that part of the Behymer and Chestnut land is needed to expand the city’s adjacent surface water-treatment plant. Other proposed land sales aren’t possible because of similar issues.

▪ Raise rent at the Municipal Service Center, a 24-acre site at El Dorado and G streets. Currently, rent is 98 cents a square foot, when the market rate is $1.40 a square foot. The increased rent could be reinvested in the site itself, which has $2.6 million in immediate repairs and close to $9 million in long-term needs.

▪ Lease rights-of-way to billboard companies. The report suggests leasing electronic billboards along walking paths such as the Sugar Pine Trail that parallel major roads such as Willow Avenue. Rudd likes the idea and said it dovetails nicely with proposals already on his desk for digital billboards at Roeding Park, which abuts Highway 99; Woodward Park, along Highway 41; Al Radka Park, along Highway 180; and Granite Park, alongside Highway 168 near the Ashlan Avenue interchange.

As with most of the consultant’s ideas, as well as proposals Rudd is already investigating if not already actively seeking, there will likely be a public debate.

Do drivers along Willow and Shepherd avenues want to see digital billboards? Would trail users consider them a blight?

Those are legitimate questions, Rudd said. He agreed it can be annoying. But the money from the billboards could go toward paying for ongoing trail maintenance. It could possibly free up more money to build more trails.

“It becomes a value call,” Rudd said.

It’s a similar story at Woodward Park, where Rudd expects some community opposition to adding a restaurant near Friant Road and Shepherd Avenue, even if $175,000 to $300,000 annually (consultant’s estimate) could be used for park maintenance and improvements.

Brand even said selling off the Riverside Golf Course shouldn’t be immediately taken off the table.

“We owe it to explore the option,” he said.

There are homeowners who abut the course who might see a decline in their property values. Others may bemoan the loss of green space, though Brand said money from the sale could be used to build two or three parks in the south part of the city, where advocates said there is a lack of park space.

Rudd, however, questions the assumption a sale of Riverside could be in the $30 million range. A developer wanting to build homes would still have to get a zoning change, which won’t be cheap and won’t be guaranteed of success. That could hurt the sale value.

Another “value call” are the numerous $1 or free leases the city has approved with various nonprofit organizations. Rudd called them noble causes, but he said the city needs to recognize that it basically subsidizes nonprofits in these situations. One example is the Fresno Veterans Memorial Auditorium downtown. The last time Rudd checked, he said it needed $40 million worth of work.

Some moneymakers are obvious.

The former Palm Lakes Golf Course is not only closed, but the city has already gone through the process of changing the zoning from open space to industrial. It is teed up for a sale, and Rudd said the only thing left is to actually do the sale. The 32 acres could generate more than $1 million.

Also in the planning are naming rights for the Fresno Convention Center. Value of naming rights for the center as a whole – as opposed to its individual parts such as Selland Arena or Saroyan Theatre, which likely would retain their names – could possibly reach $1 million annually. The money could be used for capital improvements to the center, especially Valdez Hall, which is badly in need of an upgrade.

If the city does move forward and succeeds in generating the cash – especially one-time money for land sales as opposed to ongoing cash from billboard leases – the challenge will be resisting the urge to spend it all at once.

Brand said the best idea is putting the money into an annuity, which would generate annual interest and make it an ongoing revenue source. That way, he said, it could support hiring more police or fire department personnel.

“This is just thinking outside the box,” Brand said of the entire money-hunting process. “By doing that, you create opportunities.”

This story was originally published December 9, 2015 at 4:50 PM with the headline "Sell a golf course? Lease a Japanese restaurant? Fresno looking at creative ways to raise cash."