Thursday, April 24, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

More to city land sale story

There were a few articles last week concerning the proposed sale of two downtown properties on the 1000 block of Texas Street acquired by the former Fairfield Redevelopment Agency. The land and buildings were acquired in 2005 and 2006 at the then fair market value of $775,000 to assist in combating blight within the City Center Redevelopment Project Area.

The two homes on the properties were in poor condition and demolished shortly after the acquisition to prepare the sites for redevelopment.

As our readers may well be aware, the state eliminated all redevelopment agencies in 2011 and mandated the sale of all agency holdings. The Purchase and Sale Agreement presented last week to the Successor Agency Board for the now-vacant parcels was for the current fair market value of $150,000. This sale has been the subject of articles in the media expressing critical opinions about the sale due to the agency’s financial loss on the specific transactions.

We wanted to let our readers know a few of the facts that the authors of last week’s articles left out. The proposed sale of the two downtown lots are part of a larger package. These parcels represent only two of nine former redevelopment agency properties that the Department of Finance is requiring be sold. As with any portfolio, losses and gains should be reviewed against the entire portfolio, not just a single sale. In addition, when looking at sales, one must consider overall market conditions.

Since the dissolution of redevelopment, the Successor Agency has cataloged all properties owned by the former Fairfield Redevelopment Agency into a Long Range Property Management Plan that must be approved by the Department of Finance prior to the conveyance of property. Not all properties must be sold. The Department of Finance can also approve the Successor Agency’s conveyance of “government purpose property” (public parking lots, street rights of way, public buildings, etc.) to the city or another government agency prior to approving the Long Range Property Management Plan.

Fairfield cataloged 23 properties in its Long Range Property Management Plan to the Department of Finance for approval in August 2013. The Department of Finance has approved the transfer of 14 “government purpose” properties, including active rights of way such as a portion of Highway 12 and the Interstate 80 widening project underway near Costco. The remaining nine properties to be sold subject to approval of the Department of Finance are two downtown lots, the former Fresh Choice property, 15 acres on Business Center Drive; 6.7 acres near Suisun Valley Road and I-80, the former Fairfield Bowl property, the 28-acre former Dixon Hill reservoir site, the land underneath the Solano mall sign and a small parcel used for a parking lot near Chevy’s restaurant.

In addition to the downtown lots currently proposed for sale, Fairfield’s Successor Agency has received letters of intent to purchase the former Fresh Choice property and the 15 acres on Business Center Drive. Negotiations are underway for the two future purchase and sale agreements that would go to the Success Agency Board, the Oversight Board and the Department of Finance for approval to sell the respective properties.

Staff estimates that the total value of the proceeds from sales, including the downtown lots, will net the Successor Agency more than $1.8 million. The sale proceeds would be distributed as property tax to local taxing entities or used for fulfilling enforceable obligations.

As with any real estate portfolio (albeit public or private), the sale of any one asset can trigger a loss (or a gain). For example, the 1.25-acre site encompassing the Fresh Choice property was purchased in 1976 for approximately $64,000 and ground leased to Fresh Choice for a restaurant building. The Successor Agency now owns the land along with a building worth significantly more than the original land cost, so there will be a substantial gain at time of sale (the exact opposite from the downtown lots wherein the buildings were demolished).

The goals of redevelopment included economic development, attracting businesses and eliminating blight. Assembling land for future development helped meet these goals. The virtues of redevelopment have been the subject of many debates and will surely continue. We are compelled to note, however, that Fairfield would not have a regional shopping mall if redevelopment had not purchased and assembled the land. The same can be said about numerous other improvements around town.

Isolating and sensationalizing a single transaction makes great headlines. Reality is balanced with much less shock and awe. We hope the perspective in this column provides some broader background and a clarification for readers.

Economic Notes is an update from Fairfield City Hall written by Brian Miller and Karl Dumas of the Fairfield Planning and Development Department. They can be contacted at 428-7461 or email at kdumas@fairfield.ca.gov or bkmiller@fairfield.ca.gov.

Brian Miller and Karl Dumas

LEAVE A COMMENT

Discussion | 20 comments

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  • FredDecember 15, 2013 - 9:31 am

    So was the Fresh Choice property "Development" or "Redevelopment"? Did they tear down some dilapidated home there in a blighted area?

    Reply | Report abusive comment
  • George Guynn, JrDecember 15, 2013 - 10:21 am

    Fred, you raise a good point and why the Central Solano Citizen/Taxpayer Group, of which I am a long time member, warned for many years that redevelopment agencies should not be government activities. Why should government compete with the private sector in the real estate business? Also, can others make better decisions with your tax money than you can? Obviously, the people at the city sure didn't with the two properties on West Texas! Furthermore, if the project has good numbers, wouldn't the private sector do the project? I think that redevelopment was more about doing projects where the numbers didn't pencil out for the public.

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  • Kerry JacobsDecember 15, 2013 - 11:08 am

    Hey George, Better be carefull Your making to much sense.

    Reply | Report abusive comment
  • FF64December 15, 2013 - 12:27 pm

    The Fresh Choice property was a school which was demolished and rebuilt elsewhere and a gas station that was removed to be redeveloped as restaurants in the Gateway area. Except for the removal of Ellsworth Ct. this was probably the best use of redevelopment in FF.

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  • rlw895December 15, 2013 - 1:00 pm

    Thank you for that bit of history and actual FACTS brought into these comments.

    Reply | Report abusive comment
  • FredDecember 15, 2013 - 1:09 pm

    School? What school?...Funny how when PD has a problem with an area the city’s RDA would buy the property & create a vacant lot with a sign. Ellsworth got developed but at what cost? What about the Bowling Alley, the Motel over by the DMV, the neighborhood on Alaska Street. What was the cost to create those vacant lots with signs? Big money generators there on the tax payers dime. Right up to the final demise of the RDA there was talk about the apartments over by KFC. If Fairfield’s RDA had continued there would be no need for a Police Department, just a bunch of goats for weed abatement for all the vacant lots. Out of over 400 RDA's in Cali Fairfield was in the top 10 of the most abused.

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  • FF64December 15, 2013 - 2:12 pm

    Wow? Strike a nerve? I commented that K.I. Jones School was rebuilt in a different location after being demolished to be redeveloped into what is now part of the Gateway project. i also commented that I thought next to the removal and redevelopment of Ellsworth Ct this was the BEST use of redevelopment in FF. I was not a fan of the abuse of RDA's and actually was answering YOUR question. At the same time, I happen to think that the removal of the old Motel 6/ Travelodge on Auto Mall, Cunningham Dr Eton Ct apartments and the removal of the FF Bowl made this city safer and reduced crime. If they remain vacant due to market/financial reasons, I'll still take the safer neighborhoods.

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  • LilDecember 15, 2013 - 10:38 pm

    I always got the impression that the auto mall area was cleaned up because of the auto dealers made it as part of their demands, not because the city actually cared about getting rid of crime ridden areas. It's kind of funny about that road. When we first moved to Fairfield in 1970, that area was run down. Flash forward all these years and it is still run down. The city has really done nothing other than force the seedy motels away. Oh, I guess they moved the DMV over there, creating another empty building on Pacific, that replaced the one one fifth street, which I think is still empty after 40 years.

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  • Rick WoodDecember 16, 2013 - 10:20 pm

    Fred: What's your source for Fairfield being in the top 10 of RDA abusers? Certainly Fairfield was aggressive in using redevelopment in the early years of the law. But the law closed a lot of the loopholes that allowed cities to annex "blighted" property. In more recent years Fairfield can only be accused of taking risks by loaning its RDAs general fund money. The risk was not that the projects would fair so much as what could happen would happen: The state ending RDAs with NO OBLIGATION OF THE SUCCESSOR AGENCY TO PAY THE CITY'S LOANS BACK. That's what really hurt Fairfield, and it was wrong of the state to do that.

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  • Rick WoodDecember 16, 2013 - 10:22 pm

    *"fair" should be "fail"

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  • RDA addicts crack me upDecember 15, 2013 - 4:31 pm

    Ha Ha...The City is still having tremors and withdraws from having the RDA needle ripped from their arm. Maybe we should send Sean Quinn to a rehab center in the Napa valley.

    Reply | Report abusive comment
  • FredDecember 15, 2013 - 4:42 pm

    To late to use any RDA money for that, now it would have to come out of the 1 cent sales tax.

    Reply | Report abusive comment
  • RDA addicts crack me upDecember 15, 2013 - 4:53 pm

    I'm sure sending him to RDA rehab wouldn't cost more than $10,000 dollars..it's the $500,000 it would cost city taxpayers to hire the consulting firm to justify him getting treatment that I'm worried about.

    Reply | Report abusive comment
  • FredDecember 15, 2013 - 5:12 pm

    LOL...Nice

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  • B. ThiemerDecember 15, 2013 - 9:31 pm

    Any quality organization would have a review when a project goes bad. Lessons learned from this deal, regardless if 99% of other deals were successful, should be documented and used to improve the process. Let us see the entire portfolio of the FF RDA and see the net gain of all the properties under their jurisdiction.

    Reply | Report abusive comment
  • streetDecember 15, 2013 - 10:01 pm

    What went "bad" was that the state took all the RDA money. Your complaint is with them, not the city. Or the other 400 or so other cities that were doing well enough until Gov. Brown saw the boon to state coffers. ..A move he did when Mayor of Oakland. It worked for him there, and he just transfered it to the state. I am happy with the Mall, Hi way 12 bybass, the riddance of drugs infested motels, and Elsworth Ct. Try being proud of what your city did, I am. Is it perfect? No. But what is your solution? Pick your battles, know the facts, and respond intelligently. And lay of the personal attacks. ..it serves no purpose.

    Reply | Report abusive comment
  • Rick WoodDecember 16, 2013 - 9:59 pm

    BT: That sounds like a good idea. All the city council has to do is adopt a policy along those lines and the staff would be compelled to do it. All the relevant info is public, so it's doable. Successes can be celebrated and failures can become learning experiences. But now that redevelopment as we knew it, isn't the issue moot?

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  • Rick WoodDecember 16, 2013 - 10:26 pm

    *now that redevelopment as we knew it IS OVER...

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  • George Guynn, JrDecember 16, 2013 - 6:20 pm

    B. Thiemer, I like your idea of a review of Redevelopment and seeing the entire portfolio, good or bad! And what was the net? Street, if the public is always proud of their city officials when they don't produce good results, expect more of the same. It is only when there are lots of complaints that there is any chance of improvement.

    Reply | Report abusive comment
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