This is from my 2012 campaign.

Centerville: Redevelopment Money Gone Bad

The City had a chance to implement something special in Centerville that would’ve helped our City’s economy and been a source of pride for our residents. Instead, the City is giving the developer $26 million for a project that will likely cost our economy in the long run.

(Click here to comment on this position paper on my blog.)

Redevelopment money offers the chance for a municipality to do something special, something that would not be profitable for a developer to do on their own. It gives us the opportunity to be imaginative and creative. With the recently approved Centerville project, our City’s leaders showed their lack of vision. The end result is a project that will do little to revitalize the Centerville district’s economy and will likely be a net drain to the City’s economy. The terms of the deal are such that the project will likely be a boon to the developers who stand to profit handsomely from the deal.

Without redevelopment money, any project must look profitable to a developer on its own since there is no public money involved. In recent California history, housing has proven to be the most profitable type of development. Not surprisingly, Fremont now has an excess of housing and a dearth of job centers, especially with the loss of NUMMI. Instead of insisting on development that will help the City’s economy, the Council caved in and essentially gave a gift to the developer. It’s questionable whether we should allow what is essentially a market-rate housing project (188 apartment units and fourteen storefronts) that will increase our school population, increase demand on city services, and not generate the necessary taxes to pay for these needs. To give the developer $26 million to build such a development is ridiculous.

The terms of the deal are quite generous:

  • Sale of the 6.6 acre property to the developer for a dollar (Yes — ONE dollar!)
  • We pay $13.5 million for improvements on the site and on Post Street plus additional improvements on Fremont Blvd.
  • We pay for testing for hazardous materials and any required cleanup
  • The developer will not be required to pay the standard impact fees
  • We only get to share in any profits from the project after the developer pays all of its lenders and investors a healthy return plus a 22% return to the investor!

This is basically a huge giveaway of public funds and assets to the same developer that has been unable to deliver anything on that site for years.  Is this really the best deal we could get?  Why not open this up to a bidding process to determine whether there might be a better deal out there?

Furthermore, has the impact of this project on our school system been considered?  Fremont’s schools are broke and overcrowded, and the Council, acting as the Redevelopment Agency, should be aware of how any new development will affect the local schools. I couldn’t find any mention of the project’s impact on schools in the supporting documentation.  Is our City leadership again making a decision without considering the impact on our ailing school system?

The site is a prime location for a project that could turn around this struggling district and become an anchor for the area’s revitalization.  Instead, the proposed project is over 80% housing and contains only a small amount of retail.  The project is not designed to serve as a destination or a catalyst for improvement.  Thanks to prior poor planning decisions, the project will be sandwiched between two fast food restaurants.  Without a comprehensive plan for mixed-use development in the Centerville area, this lone development will not become a destination, much like the lone block of mixed-use development on Civic Center near BART.

In these economic times, we need to be focused on creating jobs.  The small amount of retail in this project will generate few if any living wage jobs.  Allowing developers to build more and more unnecessary housing and irrelevant retail space seems to be the preferred path of our City leadership.

Could the Redevelopment Agency put these funds to better use by helping our struggling small businesses (e.g. with rent subsidies or low interest loans) instead of paying developers to build more housing?  Could we develop a business incubator program for a specialized industry such as solar or green technology?  Could the City mandate a more creative use of the retail space that might bring some character to the area and actually attract people from other areas?

This project is yet another example of the City’s lack of vision and results.  After many years of redevelopment projects, the plaza at Niles is really all we have to show for years of talk and millions of taxpayer dollars spent.  How much money has been spent on redevelopment staff and consultants in Centerville?  The developers have made sure they will reap a substantial profit from this plan, but will the City of Fremont be out millions with only another block of cookie-cutter apartments and empty storefronts to show for it?

This proposed development clearly demonstrates that our City government has abdicated their responsibility for providing fiscally responsible leadership and a workable plan for re-invigorating Fremont’s small business community.