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June 8, 2004 > The Centerville Unified Site; Redevelopment Gone Awry?

The Centerville Unified Site; Redevelopment Gone Awry?

It has been six months since, in a surprising move, the Fremont City Council approved a Exclusive Right to Negotiate (ERN) agreement with Charter Development for the Centerville Unified Site. The developer has since changed many of the factors that were given as reasons by city council members for their choice. The new plan, still tentative after all these months, includes a reduction of retail space, removal of senior housing, removal of all rental units, inclusion of small "live/work" units and a shift of parking design. In view of the significant variations from the original plan and the critical nature of this project for the health of Centerville and the City of Fremont, including the vaunted "downtown," TCV has decided to reprint comments from city council members printed in the November 2003 edition.

City Attorney Harvey Levine stated that the Fremont City Council, acting as the Board of the Redevelopment Agency, has several options when the agency convenes a work session on June 15th. The ERN can be extended, terminated or the new plans can be approved and a Disposition and Development Agreement (DDA) initiated to begin site development. In the event of termination, another developer, probably one of those who previously submitted proposals for this project, can be asked to enter into an ERN with the city.

Current Charter Development plans will be presented to the Fremont Planning Commission on June 10th followed by the city council session on June 15th. A recent presentation of the Charter Development plans to HARB (Historical Architectural Review Board) elicited many comments that questioned whether the land use suggested is appropriate for the mission of the Redevelopment Agency and whether the design proposed will reach out to the community or become an separate "enclave."

To help our readers understand the reasoning of the city council when voting to offer an ERN to Charter Development, we have reprinted the following article that appeared in the November 4th edition of What's Happening's Tri-City Voice:

Last week, Tuesday, October 28, Fremont City Council members voted 3-2 to approve Charter Development as the preferred developer for the Centerville Unified Redevelopment Site. Councilmembers Cho, Wasserman and Vice-Mayor Pease voted in favor of Charter while Mayor Morrison and Councilmember Dutra favored TMG Partners. The selection of Charter came as surprise since redevelopment staff and an advisory group composed of staff and community members recommended TMG Partners. The Centerville Business Association also endorsed the TMG proposal. TCV asked city council members for their comments.

Favoring Charter Development:

Vice Mayor Bill Pease
My choice was between TMG and Charter. The reason I chose Charter Development is from a housing standpoint, an all retail development didn't 'pencil out' so a housing component was necessary. I am not in favor of single family housing - townhomes or 'for sale' units - even though the numbers work better for the city. You would end up with families in the development which I don't think is appropriate. School children would be isolated from their schoolmates. There isn't enough room for recreation and you have retail establishments all around - very high traffic. I think it would pose safety hazards. The vitality of a retail complex lends itself to staying open later in the evening. With young families, there could be complaints of too much noise.

Financially, TMG and Charter were very close. I preferred the 'bold' architecture style of Charter. TMG could have built the Charter complex and vice versa, but it isn't right to have someone build another's idea. If you look closely, the Charter proposal works out a little better for the community, for the citizens - I am looking at taxpayer dollars. They [Charter] are putting in more affordable units so the cost will be much less per unit. There is room for flexibility when looking at senior housing or other age groups. We need to let the developer do what needs to be done to make it work.

TCV: What if the financing for low income senior housing is unavailable?

Vice Mayor Pease: They have to make it work. Charter stated that they have the ability to do it either way. If you take the affordable senior housing element out, you will have the same mix as TMG.

TCV: Will a senior housing project with retail, as a focal point for an urban area, draw people from the surrounding community?

Vice Mayor Pease: I don't see the housing as a focal point. The housing component will not influence the retail side. There aren't enough people in the housing element to affect the retail. The housing component is subsidizing the retail. Once the retail is built, I think it will be one of the most desirable areas in Centerville to locate a business. This is what the community has been asking for. This will not be the most prominent spot in Fremont - I think our downtown will take that honor - but the Centerville district needs a big 'shot in the arm' and this will bring it. I like the curved street idea since you can see more retail when you pull in - there are a lot of pluses.

TCV: What about lining Fremont Boulevard with retail?

Vice Mayor Pease: I think you can do some of that too. I am open. I mentioned in my motion that I wanted to have staff bring a work session to us while in the preliminary stages of the design. I want council to be able to have input before it goes too far down the road. We often get things that are three quarters complete. There is so much time and dollars expended it is tough to change it. If we are involved in the process, then it's a 'win-win.' I hope the developer can work out an arrangement so the entire area [one parcel is not controlled by redevelopment] can be rehabilitated. That will change the dynamics and housing component.

TCV: Do you think Scenario is adequately protected?

Vice Mayor Pease: There is no question about this. That is why I put it in my motion - to find a free standing or joint venture arrangement like a condominium where Scenario has ownership. The building would not necessarily be detached but this must be accomplished for the deal to go through.

I think it would be better to select a developer based on their financial qualifications and prior experience first and then work with them on the design. We [the council] entered this process after the designs were submitted.

Councilmember Bob Wasserman

I liked Charter's plan from the beginning. It's a bold project which will be great for Centerville. I also liked the senior element. There are vacancies now in rentals and private developers are not going to build more apartments at this time, but for seniors there is demand. Fremont will have a demand for senior housing for years and years. A lot of seniors have equity in their property, sell out and move away. Many of my friends have said they would like to stay in Fremont. The thing that needs to be 'fixed' is the stigma attached to seniors. There are a lot of seniors that are working and very active. If you build something attractive with a commercial mix, seniors would be attracted to this, walking around, patronizing the shops and spending money there. There will also be a draw with people coming into the area.

Charter Development also has more designated commercial space - about 1/3 more than TMG. TMG was a good project and a solid company. Their commercial element didn't do a lot for me and, I think, would not do much for Centerville. Looking at the retail space and the plaza, it's going to attract trendy places. That will draw local people. There will probably be some convenience shopping. I don't agree with the argument that the new development should have retail along Fremont Boulevard. There is no parking on Fremont Boulevard. That will not change for a long time.

TCV: What about Scenario Game and Hobby Shoppe?

Councilmember Wasserman: I think that can be worked out. All four developers said the same thing - they would take care of Scenario. That has been well established.

TCV: Staff, Centerville Business Association and the Advisory Group with local citizen input all favored TMG. Did you take this into account?

Councilmember Wasserman: It was very difficult for me. I was surprised at the meeting since I felt the competition would be between Blake Hunt and TMG. I did not feel Blake Hunt was appropriate for the area. My sense was that the community favored Blake Hunt due to prior public comments in the media and at our study session. This was a very unusual decision process.

In the aftermath of this decision, I believe Charter will have to build some larger units to attract the senior I am thinking of and there will have to be a mix - not all seniors and not all affordable. Too much low income and very low income tenants could hurt the commercial. I liked both TMG and Charter with a preference for Charter.

Councilmember Steve Cho

It came down to several factors. One is the design of the project. I thought it was a fresh and attractive. The curved street and center square allows for events and functions. Another factor was that the proposal addressed a need for senior housing demand for the low and very low income bracket. The Charter plan offered the best compromise of retail and residential space. I did not think home ownership surrounded by a retail environment was a good idea.

Retail establishments depend on the community around the development for success. Senior housing will not be much different than having other types of housing. Scenario will have its own separate space that is owned by Scenario. If they cannot meet what they said they would do, that opens the box again. The plan will not be acceptable.

TCV: Councilmember Dutra brought up the importance of maintaining a continuous retail environment along Fremont Boulevard. Do you feel this is of prime importance?

Councilmember Cho: In a completely urban environment, having a continuous line of business is one thing, but I am not sure that this will have that big of an impact on the Centerville area.

TCV: Isn't the Centerville site an urban center?

Councilmember Cho: I think this proposal will work as well.

TCV: Anything else you would like to add?

Councilmember Cho: I would like to thank those involved for all their hard work.

Favoring TMG Partners:

Mayor Gus Morrison

I think it is a huge mistake to put a 100% senior complex in this development. It [Charter Development] is really like two projects - senior housing on one side of the street and some commercial on the other side. They don't mix well. The units are small. I don't know many people who have been living in a house for years and move into a 900 square foot apartment. Let's say you start with a couple aged 65. As time goes on, you end up with a project full of frail, elderly people who need a lot of help, don't get out much and don't spend a lot of money. The retail is forced to depend on people from other places without the advantage of spending power of residents.

TCV: Doesn't the retail of mixed used projects depend on people who live outside the development anyway?
Mayor Morrison: As an example, if I have a coffee shop, the core business is the people who get up to go to work in the morning and grab a cup of coffee on their way. During the day, others will come but you have a built in customer base. For things going on later in the evening, you have people who are looking for a sandwich or whatever. The other thing about all this is the attempt to play off the vitality of Dale Hardware. Putting seniors next to Dale isn't going to help either.

TCV: Is Scenario protected?

Mayor Morrison: Scenario is not protected. Read Chuck Wofford's comments about his need for ten years of stability in his business plan. You wind up with something very different if you "condominimize" a strip mall type of development rather than a free-standing building.

Councilmember Dominic Dutra

From an experience, pro forma and vitality - retail and residential - perspective, TMG was, by far, the superior developer. Beyond that, we established a process that engaged our staff and the community at a very deep level - and they were supportive of TMG. To come up with a decision counter to that is not appropriate. The selection of Charter Development is not the best selection for that area. This is our first and best opportunity to chart the course for the future of Fremont. It was imperative to make the right selection and I don't think we did that.

TCV: What do you think about putting 100% senior housing in this development?

Councilmember Dutra: It's more than just 100% senior housing. It's 100% senior housing, of which 50% is affordable. When you look at revitalizing historic areas from a retail perspective - I am a supporter of affordable housing and TMG had a 20% affordable housing element - you need to, from a people and dollar perspective, put people into that community that can support retail in a way that will make it vibrant meaning people are there a lot of the time and have money to spend. A development that is 100% senior and 50% affordable is not going to achieve that.

TCV: Are you convinced that Scenario will be taken care of in the Charter Development?

Councilmember Dutra: I am not! From an 'inline' perspective, meaning lease, I hope and intend to make sure that will happen but I think Scenario had been clear that their interest was in a fee simple ownership. They want to be able to control their rent. TMG had a pad set aside for Scenario that would have been a very simple transition.

TCV: What is your position on retail development along Fremont Boulevard?

Councilmember Dutra: The TMG plan has retail on the street. We are building for the future - the not too distant future. I have brought this up before and am working to remove the route 84 designation along Fremont Boulevard. This is going to happen although it may take four years to get it done. The [Centerville Unified Site]development we are talking about won't be done for three years. The TMG plan puts retail along Fremont Boulevard with minor breaks for parking to the rear of the retail buildings. This is quite distinct from Charter's plan which puts a lot of residential and parking space on the street. From a pedestrian oriented perspective - think of any shopping area you want - you do not see big parking areas. Parking is hidden. People walk down the street, in and out of places, without interruption.

TCV: Is the senior component compatible with a good retail mix?

Councilmember Dutra: I think it is more important to look at the affordable component. The financing mechanism that Charter has set up is based on 50% affordable housing. Their pro forma is based on tax credits or tax exempt bond financing which is how they are going to build it. If you think about revitalizing from a retail perspective - 131 units of affordable housing have been approved on Maple Street, within walking distance, and now another 50% in this development, they are going to have a hard time. The senior issue is one of vitality. Retail depends on people on the street - a mixture of young and old.

TCV: Are you familiar with the Charter Development?

Councilmember Dutra: I am. They have sold off large parcels of land in Dublin to various developers for largely single family, detached residences, some multifamily and 'big box' retail - no vital mixed use areas. They have not done mixed use in the past. They do not have that level of experience.

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