Marek Warszawski

Fresno is a city of 530,000 people. Why do so few of them live downtown?

Fresno has a population of 530,093, according to U.S. Census Bureau estimates.

How many live downtown? According to Dan Zack, the city’s assistant planning director, the answer is 3,797.

That’s fewer than 1% of Fresno’s residents living within the 1.5-square mile triangle contained by Highway 99, Highway 41 and Divisadero Street.

“Wow!” Fresno developer Darius Assemi said when informed of the 3,800 figure.

Nearly two years after Fulton Street reopened to traffic, downtown certainly feels more vibrant. Several restaurants and a couple breweries have opened. (Others have closed.) Events such as ArtHop and FresYes Fest draw large, enthusiastic crowds.

Opinion

Yet a key ingredient is missing: housing.

The majority of downtown’s denizens live in the Cultural Arts District. The two- and three-story apartment complexes they occupy are in high demand. And for those paying market rates, rents are beginning to approach similarly sized units in north Fresno.

But despite the seemingly favorable economics, residential construction in Fresno’s urban core is stagnant.

“We’re in kind of a weird growing stage right now,” Zack said. “Rents downtown have risen to the point where some people will say, ‘Whoa, that’s kind of pricey.’ And yet it’s not quite enough to privately finance new buildings.”

Same goes for renovating old ones.

Since the Fulton Mall became Fulton Street, eight new lofts in the venerable Pacific Southwest Building represent the only additions to the downtown housing stock. Those new lofts doubled the building’s total to 16.

Despite monthly rents ranging from $1,700 and $2,000 – among the priciest in Fresno for 1,200 square feet – there is a 150-person wait list.

“I get calls every day,” said Sandra Chaires, the Pacific Southwest Building’s director of operations. “Just (Monday) I had seven to 10 calls asking if any of our lofts are available.”

Between 2007 and 2016, downtown experienced an apartment boom of sorts. A total of 627 new units were built from the ground up or renovated from existing structures, most of them by Assemi’s Granville Homes.

That phase ended when the city’s Redevelopment Agency was shuttered by then-Gov. Jerry Brown. Without those property tax subsidies, developers have not been able to make the financing work.

“Those first-generation projects benefited from funding sources that are no longer available to us,” Zack said.

High occupancy and rising rents

Granville Homes still owns and manages all but two of the properties. Assemi, the company’s president, said the occupancy rate for his downtown apartments sits at “93 or 94 percent.” That’s slightly less than “97 or 98 percent” for his rental properties in northeast Fresno.

“Other parts of town have a higher occupancy rate, but 93 or 94 percent is pretty good,” Assemi said.

Meanwhile, rents downtown average “about 20 percent less” than for similarly sized units in northeast Fresno.

“But (the gap) is shrinking,” Assemi said. “The advantage that downtown Fresno has is 50,000 people work there every day. Say 10 percent of them say, ‘I want to walk to work every day.’ That’s 5,000 potential customers. But where are they going to live? There’s no new, crisp, attractive safe housing supply for them to either buy or rent.”

According to Assemi, the biggest impediments to residential development downtown include the scarcity of available land as well as the historic designation of some buildings, which prevents them from being razed.

“If you want to use an existing building, costs just doubled,” Assemi said. “You have to go retrofit an 80-year-old building with old infrastructure that doesn’t meet today’s code. So you have to build a new shell inside that old shell.”

Radin-Kamp.JPG
Boarded-up windows are visible on the front of the Radin-Kamp Department Store building, later home to J.C. Penney at the southwest corner of Fulton and Tulare streets. The structure, built in 1924, has been vacant for years, and the owner says he’s had trouble getting the financing he needs to realize his plans for retail stores on the ground floor and residential apartments on the upper floors. Tim Sheehan The Fresno Bee

In 2013, the owner of the J.C. Penney building on the corner of Fulton and Tulare streets announced plans to convert the six-story building into a mixed use property with retail on the ground floor and apartments above.

Six years later, the building remains vacant though there is talk among city officials and the downtown community that owner Shay Maghame has finally secured financing for the project, estimated to cost $40 million to $60 million. (Maghame declined to speak publicly about these developments.)

The remodeled Penney building is one of several residential projects in various stages. Zack said 623 new apartments and lofts are “in the pipeline.” Some are entitled and permitted and looking for financing. Others, notably Hotel Fresno, are underway. Others remain mostly conceptual.

‘Everything starts with housing’

“Everything starts with housing – retail follows residential,” said developer Mehmet Noyan, whose South Stadium project of 54 apartments near Chukchansi Park was supposed to begin construction in 2017. Now, 2020 is the most optimistic estimate.

“To make an impact on downtown Fresno we definitely need more housing. And there’s a demand for it.”

How many apartments must be built until there are enough people living downtown to support a healthy retail, restaurant and nightlife scene?

Assemi said the answer is “between 2,500 and 5,000 new units, and the majority needs to be market rate.” Zack said completion of the 623 already in the pipeline will lead to “fathomable results” while the goal “if all our wildest dreams come true” is 10,000.

“In order to have retail, dining and nightlife be successful, we can’t just be a one-shift downtown,” Zack said. “It’s hard to sustain a business on just a lunch crowd. Having that evening and weekend population is really crucial to businesses making it downtown. We need that constant foot traffic.”

In a city of more than half a million, 3,800 pairs of feet aren’t nearly enough.

“If you look at Cleveland, Pittsburgh and Los Angeles, these are cities whose downtowns have roared back to life,” Zack said. “The same can happen here, but that residential population is key.”

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Marek Warszawski writes opinion columns on news, politics, sports and quality of life issues for The Fresno Bee, where he has worked since 1998. He is a Bay Area native, a UC Davis graduate and lifelong Sierra frolicker. He welcomes discourse with readers but does not suffer fools nor trolls.
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