North Fresno politicians kill South Stadium housing project key for revitalization
Two north Fresno City Councilmembers on Wednesday killed a development project key to downtown and Fulton Street revitalization because of political differences.
The politics and city policy behind Wednesday’s Fresno City Council special meeting agenda item are complicated. They involve political and personal relationships and legal fights.
Councilmembers Mike Karbassi and Garry Bredefeld, who represent northwest and northeast Fresno, respectively, cast “no” votes to extend the development agreement for the South Stadium project, a four-story housing and commercial building slated for a vacant lot on Fulton Street near Chukchansi Park.
The developer, Mehmet Noyan, cut ties with his partner, Terance Frazier, to push the project forward. Still, Bredefeld and Karbassi voted against it anyway, citing the long timeline and comparing the project to a separate, failed Fulton Street project by another developer.
Frazier is the frequent subject of Karbassi’s and Bredefeld’s ire. They often announce corruption allegations because Frazier is in a relationship with Councilmember Esmeralda Soria and has politically supported Councilmember Miguel Arias. Soria routinely recuses herself from city business and votes related to Frazier’s projects.
“They lost the city $10 million,” Noyan said about Bredefeld and Karbassi. “I’m just extremely disappointed.”
After the vote, Karbassi said the project simply has taken too long to come to fruition.
“While I always applaud attempts to build homes and drive investment in our community, the South Stadium project has simply taken too long at a time when more housing units are needed faster than ever,” Karbassi said in a statement. “As with all developments, I believe the viability of the project ought to be central to our focus as a policy-making body, regardless of who owns or operates the project. After eight years, with no true start date for construction, I could not in good conscience allow further extensions to leave prime land idle any further.”
Arias, who represents downtown, said the vote would likely prevent housing from being built on the vacant lot for around 10 years.
“Two of my peers chose to put their personal politics ahead of building housing in downtown in the middle of a housing crisis,” Arias said after the special meeting. “This is a chilling message to current developers that have spent years securing financing and working through the years-long permitting process. I am disappointed but not surprised, as they have made it clear they prefer to continue an urban sprawl strategy for our city.”
Project history
Plans for the project first were revealed in 2016, about a year ahead of the reopening of Fulton Street to traffic. At the time, it was touted as a prime example of a public-private partnership.
Two buildings on the property, on the corner of Fulton and Inyo, were demolished in 2018. The developers also secured the financing for the project.
Since then, the Fresno City Council has approved three amendments to the original development agreement. The latest designs of The Park would add 99 residential units and 4,500 square feet of retail space to downtown Fresno’s most bustling area. In recent months, the entire ground floor was redesigned to meet flood control standards for new buildings.
The price tag for the project also has increased. When revealed, Noyan and Frazier estimated the first phase would cost about $14-$15 million. The latest version of the project is expected to cost around $32 million.
The next step for the project would have been construction.
A fourth amendment to the development agreement failed to pass two weeks ago because of a new municipal code update that requires a supermajority of five council votes to extend development agreements, so they are of “clear and convincing” benefit to the public.
Since Soria recuses herself from votes involving Frazier’s projects and Karbassi was absent, the amendment failed to pass with a 4-1 vote.
That’s when Frazier decided to bow out of the project, citing political attacks from Bredefeld and Karbassi.
“I can’t be selfish about this project,” Frazier told The Bee. “It’s not about Terance Frazier. I love my city and I’ll do everything I can to help Fresno keep moving in the right direction. Even if they keep harassing me.”
Special meeting
During Wednesday’s special meeting, Noyan explained to the City Council that Frazier would not be involved. He said he’d move forward with the project with a new partner, Los Angeles-based developer Jeff Isenstadt.
“We reached a settlement agreement where Mr. Frazier has stepped aside from the partnership,” Noyan told the City Council. “Noyan Frazier (Capital) is still the applicant. If you approve this project today, the extension, we will make an application to the Secretary of State this afternoon for a new name that’ll be Noyan Isenstadt or some acronym with our names or initials in it. That process will take approximately two weeks, but I’m standing here before you on the record that Mr. Frazier is no longer a partner in this project.”
That wasn’t enough for Karbassi and Bredefeld.
Both questioned the length of time the project has taken. Karbassi also questioned the public investment.
Both Karbassi and Bredefeld questioned why the South Stadium project should move forward when another proposed project at the other end of Fulton Street failed to come to fruition and eventually was axed.
Bredefeld said the South Stadium project should go through the city’s open request for proposals process because the current developer took too long.
“It is time to pull the plug on this project,” Bredefeld said. “That’s the right thing. That’s the fair thing. That’s the equitable thing for our city. That’s the right thing to protect taxpayers and to treat everyone the same.”
Cliff Tutelian hoped to develop a parking lot on the north side of Fulton Street in front of CVS and another one used by the Fresno Housing Authority. He planned to build apartments and retail space as well. But he failed to secure the financing for the project, and an old type of agreement with the city expired, and new state laws would not have allowed for the old type of agreement, called an exclusive negotiating agreement.
Tutelian blamed Arias for killing the project and eventually sued and lost over it.
“I’m trying to understand why an exception will be made here because we made the point that with another project at the other end of the mall, they didn’t have the financing in place,” Karbassi said.
That project differed from the South Stadium project in a number of ways, one of which being ownership of the property. In the Tutelian project, the city and Housing Authorities owned the parking lots, not Tutelian. In the South Stadium project, the City Council voted in 2016 to purchase land from its now-defunct redevelopment agency and essentially give it to the developers.
Arias pointed out that the city used other longtime development agreements for downtown projects such as the Iron Bird Lofts and Old Armenian Town.
“If it’s going to be our position that those things will not be extended any longer because they’ve taken too many years to secure the financing or too many years to develop, then I just want to remind folks that that’s going to send a pretty chilling effect to anyone who takes the risk of developing in downtown,” Arias said. “Every development downtown has taken years to come forward.”
Politics at play
City Council President Nelson Esparza blamed the South Stadium project’s demise on “petty politics.”
“I’m disappointed to see this project be halted by petty politics,” Esparza said. “South Stadium would have made a wonderful addition to our downtown and would have served as a catalyst for more great things to come in downtown Fresno.”
Bredefeld has repeatedly criticized Frazier’s projects with the city of Fresno and his relationship to Soria. In the past, he voted against extending the South Stadium project agreement and said it was because of Frazier’s involvement.
Noyan said on Wednesday he was extremely disappointed.
“Garry is just the most mean-spirited person I’ve ever met in my life,” Noyan said. “That really makes me question, ‘Do I want to do business in such an unfriendly business environment?’”
Noyan said he would continue to support downtown revitalization, but he worries without this project, any progress may stall.
“My experience is, you know, activity creates activity,” he said. “So, this would have been the first project from the ground up built on Fulton Street.”
This story was originally published August 31, 2022 at 10:40 AM.