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July 11, 2006 > Redevelopment in Fremont - A Status Report

Redevelopment in Fremont - A Status Report

Although redevelopment projects make headlines when they are proposed or under construction, they often lose visibility between those phases. TCV asked Interim Housing and Redevelopment Director, Elisa Tierney, about progress of several high profile historic district projects.

TCV: What is the status of the Niles Town Square project? Are there still environmental issues?

Tierney: We are still going through the environmental cleanup process. I believe the remedial action plan has been approved by DTSC (California Department of Toxic Substance Control) or is close to it and we are now on to the next phase. We have been jumping hurdles such as community outreach requirements to make sure the community understands there is contamination at the site that must be removed. DTSC representatives were pleased that the community appears well informed. Once the design documents are approved, we will move forward with the clean-up work probably this fall.

Concurrently, construction documents for the plaza are moving forward. Just before I came to Fremont, a presentation was made to the Fremont City Council in December. At that time, it was anticipated the process would move forward in January or February. Then we realized there were issues around the depot and freight buildings like whether they are historic or can be moved, etc. We split the construction document process into two phases. In the first phase, we employed an architect with an expertise in historic buildings. That phase was done in May. The second phase used the first phase to then produce the actual document for the construction of the Niles Town Plaza. This is scheduled for presentation to the city council on September 12.

TCV: Also tentatively scheduled for September 12 is a contingency plan for affordable apartments at Fremont Vista assisted-living facility. What does this mean?

Tierney: At a previous council meeting, the redevelopment agency proposed an additional $285,000 loan to help Fremont Vista through a difficult time. The council asked staff for two things. In the event of further financial difficulties, Councilmember Dutra asked for a backup plan for 20 residents living at the facility needing affordable apartments. Councilmember Natarajan noted that if the rosy pro forma is met, additional "below market rate" units should be provided and asked for staff guidance on that scenario. Staff is preparing a response for the council in September.

TCV: What progress is being made on the Centerville Unified site?

Tierney: Our Disposition and Development Agreement (DDA) with Charter Development required them to lease at least 65 percent of the retail space before we would transfer the land for construction to begin. They encountered difficulties meeting this target and asked for an amendment to the DDA. Before we could present this proposal to the agency board, another problem arose. Only one construction bid was received and it was not reasonable. We anticipated five or six bidders.

TCV: What happened with the DDA amendment?

Tierney: It's still a consideration. In it, we were trying to create incentives and/or penalties to entice Charter Development to meet our goals. We've considered lowering the lease percentage, but it would have to be reached within a certain number of months. If they failed, a manager would be required to help them meet the goal. On the residential side, the agency would share in the proceeds to a certain capped limit. If the retail goal is not met, the cap would be removed. Right now, we're preparing to solicit bids again for construction and holding on further action with the amendment.

TCV: Will this delay cause the cost of the project to increase?

Tierney: Delays are costly and we are all concerned about that. The DDA calls for a guaranteed maximum price. We had five or six approved bidders but when asked to negotiate with the developer, only one contractor stepped up to the table with extremely high cost. This time we anticipate the process will be competitive offsetting price increases.

New bids will be returned sometime in August. It is anticipated that deadlines and the DDA will be extended until sometime in January 2007.

TCV: The funding limit for the redevelopment agency will be reached in approximately five years. Have contingency plans - an exit strategy - been made to reduce agency personnel and functions as funding decreases?

Tierney: Shutting things down means that we do not have any more tax increments to invest in projects. We would still have an affordable housing obligation. We're assuming that will continue and we're working with the taxing entities to raise our cap. Our limitation is one of money, not time. We currently have a spending cap of $400 million. In the scenario of reaching our spending cap, we would reduce staff depending upon agency reporting and project needs. Funds have been set aside in our budget to see if it is feasible to raise the cap.

At this point, we have been focusing on day-to-day issues and not thinking out five years, but we need to start doing that. We do have a five year implementation plan and are two and a half years into it. When that is coming to an end, and we are looking at another implementation plan, we will be formally asking questions about the future of the agency.

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