In the world of athletics when the infamous words “We are doing a good job to build character” are spoken, it ususally means the team is losing and the coach is about to be fired. Taking the high ground is not a substitute for being successful. This is how life works. Not so with projects undertaken by the government. Instead of being judged by dollars and sense, government is often evaluated by criteria that does not jive with the balance sheet. Take for example the urban renewal undertaken a decade ago by the Contra Costa Redevelopment Agency (RDA) in the area surrounding the Pleasant Hill BART station.
Without any voter approval, the RDA took the land that was being used for commuter parking, and with the assistance of $83 million in bond money, transformed the area into a mixed use project that features housing, retail, and construction of a pedestrian/bike bridge over much traveled Treat Blvd.
Urban Ecology Inc., in its report “Blueprint for a Sustainable Bay Area,” stated, “With the highest concentration of multi-family housing within a quarter mile of any suburban transit hub in Northern California, the Pleasant Hill BART Station shows how transit oriented development can work.” In addition “The Avalon” apartment complex was given the “Partnership Award” by the County Supervisor Association of California and special recognition by the Pacific Rim Association.
Despite receiving high praise for being a “green friendly” model for other cities to emulate, the Avalon was not without its detractors. In a scathing, report No. 0306 issued in 2003, the Contra Costa Grand Jury was very critical of spending funds earmarked for housing on building parking garage facilities and erecting a pedestrian bridge. The $30 mllion price tag for this part of the construction costs came to around 35% of what was raised for the project in the bond issue.
Despite the misgivings of the Grand Jury, the construction of the award winning infill project proceeded.
After a slow start the pricey aparments, which currently rent for between $1690 for a studio to more than $3180 for a three bedroom model have filled up. According to Holly Hunter Nelson, community consultant for Avalon, “most of the units are now rented.” With the project virtunally filled, for the non subsidized apartments, rents can be raised to reflect supply and demand in the marketplace.
Such is not the case with leasing commercial space at the Avalon Community. With exception of a Starbuck’s, a mobil office service and an insurance agency, the vast majority of retail space remains vacant. It has been postulated that during the recession this type of property has been difficult to lease. Others, in the commercial real estate field, have cited better availability for shopping in less congested areas with more convenient parking, than what the Avalon offers.
With this set of conditions, Main Street Property Services, has a complicated task to attract the right retail businesses to the Avalon complex. According to Craig Semmelmeyer founder and principal of the company, “The challange is trying to create a neighborhood with businesses appropriate to the life style of the people who live in the Avalon.” In the next year he expects to bring in four upscale restaurants, an ice cream parlor, beauty saloon, yoga studio, pet store and nail spa to fill the 12 empty commercial slots at the Avalon.
Semmelmeyer, who has enjoyed success in the past placing such businesses as Chow in Lafayette and EJ Phair in Concord, thinks “it is important to lease to the the right people. You don’t place a Walmart next to a Nordstroms.” Additionally, because the Avalon was a government redevelopment project where preveiling wages paid to workers, Semmelmeyer stated, “we as the leasing agent need to do more for prospective tennants when negotiating move-ins.”
When all of the commercial space is leased, Semmelmeyer is confident that the parking ratio of three cars to 1,000 feet of retail will be sufficient to handle all of the patrons who will might on the Avalon by car, foot, and BART.
While the exact nature of the problems with The Avalon to be commercially viable are open to debate, Wall Street’s evaluation is not pretty. A couple years ago the Standard & Poor’s rating service down graded its long-term rating of the 1989 and 2003 tax allocation bonds from BBB to B. Other than market conditions, the main complaint with redevelopment projects such as the Avalan is high construction expenses that cannot generate enough rental income to support bond payments.
The experience with the construction at Pleasant Hill BART is typical of what has occurred with redevelopment undertaken in California for the past 20 years. This is one reason Governor Jerry Brown shuttered the Redevelopment when he took office in 2011. Daniel Borenstein, columnist for the Contra Costa Times commented, “The redevelopment scam, which has turned into a windfall for developers, bond marketers, planning consultants, and professsional sports teams, has racked up $88 billion in bond debt statewide.”
To date, funds which had previously been allocated to this program on a local level have been retained by the State of California to offset red ink in their yearly budget. If this trend continues, local communities will have to be smarter and more competitive to entice developers into their cities to do new projects. They will need to rely on private capital and thus will need to cut down on “social engeneering” functions which have driven up opportunity costs in the past.
In anticipation of these new demands on redevelopment, the City of Concord has recently appointed a Downtown Specific Plan Ad Hoc Steering Committee (phew, say that fast ten times) to plan development in specified districts for the next 25 to 30 years. Of some concern is that the Metropolitcan Transportation Commission (MTC), which is paying for the costs of this study and The Association of Bay Area Governments (ABAG), are the 800 pound gorillas of dense housing projects around transit stations, demanding projects like Pleasant Hill BART complex be built without regard for citizen input that oppose such projects in their neighborhoods.
Will these bodies try to push their Green Agenda of building low income housing near transit hubs catering to families who lack the ability to ride on BART? If Concord and other communities in Contra Costa do not follow along with ABAG fiats, will unelected boards such as the MTC blackmail communities withhold State gas tax funds for road and transportation projects? This notion is not a pipe deam as Danville and Orinda have already experienced such pressure to conform to questionable Smart Growth policies.
It must be rcognized from the failings and success experienced with the Pleasant Hill BART development that easy access,sufficent parking, and the right mix of consumers is needed in planning these infill projects. Along with this is the importance of taking into account the impact redevelopment might have on existing people who live in and around these areas.
Hopefully, The Concord Ad Hoc Committee and other residents along the 680 corridor will strive to serve local citizens as opposed to drinking the Kool-Aid for the central planner dreamers who have dominated the redevelopment landcape in recent years.
~ Richard Eber, a Concord resident and president of Amerasa Rapid Transit, is an appointed member to both Concord’s Measure Q Oversight Committe, and its Downtown Specific Plan Ad Hoc Steering Committee. The views expressed in this article are his own and do not reflect the opinions of those committees, their respective members, or the City of Concord.