Fresno Oversight Board meetings are always interesting, even when no “hard” news comes out of them.
Monday’s meeting was no exception.
The board’s initial claim to fame is that it once sued itself. It has an odd charge. Redevelopment agencies were killed last year by Jerry Brown as part of his state budget-fixing plan. Like all redevelopment agencies, the Fresno RDA had a lot of contracts still in the pipeline. Some were housing, others were of a more commercial nature, still others involved City Hall loans to the agency.
The Fresno Oversight Board, as made clear by its name, oversees the unwinding of the old RDA’s non-housing projects.
Monday’s Oversight Board meeting focused on the review and approval of a list of unfinished non-housing projects. The list is sent to the state Department of Finance. If the DOF likes what it sees, tax money is freed to fund the next stage of these projects.
The list before the Oversight Board on Monday was for the six-month period of July 1 to Dec. 31, 2013.
All of this is complex. It’s not unkind to say that public servants donating their time as Oversight Board members, a variety of paid lawyers, powerful state officials and overworked judges trying to find common ground all get lost in the weeds on occasion.
On Monday at City Hall we learned that a handful of old RDA deals, approved earlier by the Oversight Board, were suddenly deemed no good by the state.
One of these deals involve city-owned Chukchansi Stadium. As you may recall, the public was told in fall 2000 that the RDA would help fund annual payments on the $46 million stadium’s construction bonds. The RDA would pay $200,000 a year, thus taking some of the pressure off the city’s general fund and making the stadium deal more palatable to taxpayers.
It turns out the deal wasn’t really for $200,000 a year. It was actually for much less. Still, any help on the $3.4 million annual bond payment is welcome news to a City Hall worried about making payroll this spring.
In fiscal year 2014, which begins this July 1, the old RDA is supposed to fork over $70,000 to the city to help pay those stadium construction bonds. The state has now said that $70,000 is a bad deal and must die. Doug Sloan of the City Attorney’s Office told the Oversight Board on Monday that City Hall is fighting the state’s decision.
Fresno County Supervisor Debbie Poochigian and former Fresno County Supervisor Doug Vagim, both Oversight Board members, think old RDA/stadium deal may be good for City Hall but isn’t good for county taxpayers in general. They appear to have few allies on their board.
Another old RDA deal that is in the state’s crosshairs involves the Assemi Family’s L Street project. The 28-unit townhouse project at L and San Joaquin streets in Uptown was to get a $1.44 million long-term, low-interest RDA loan. The state in December turned thumb’s down on the loan. Sloan on Monday said City Hall is also fighting this one.
I had been led to believe last week that the two main reasons that the Crichton Place project is still nothing more than dirt were 1.) fallout from a lawsuit by historic preservationists, and 2.) a California Environmental Quality Act that is too onerous. Perhaps a bigger reason is that a $1.44 million long-term, low-interest construction loan is stuck in the bowels of government bureaucracy.
The Fresno Oversight Board has no jurisdiction over the old RDA’s housing projects. But that doesn’t stop board members — especially Poochigian, Vagim and Chairman Terry Bradley — from asking housing questions. After all, it’s the board members’ meeting, and Sloan and former RDA Executive Director Marlene Murphey are sitting there.
Bradley toward the end of Monday’s meeting asked Murphey and Sloan: What’s up with Hotel Fresno?
It’s hard to imagine a downtown property that is 1.) a bigger financial and legal mess, and 2.) located in an area more strategically vital to the success of downtown’s long-term revitalization than the Hotel Fresno site.
It’s sufficient here to state that the nearly century-old seven-story hotel has a long history of serious code violations; it remains a magnet for taggers and pigeons; it’s by far the single biggest downtown eyesore; it used to be located on Broadway, Fresno’s busiest street when Highway 99 ran through town along that same path; it’s now located on a joke-of-an-urban-street called Broadway Plaza because the once-grand Broadway from Tuolumne to Inyo was completely destroyed 50 years ago by Victor Gruen’s huge revitalization project; it’s now thoroughly hemmed in by the IRS building/parking garage to the north, a city/Housing Authority parking lot to the east, Masten Towers and that funky Broadway Plaza to the southeast, a lightly-used parking lot to the south and a maze of streets and green space and asphalt to the west and northwest.
Hark back to September 2011. That’s when the Fresno City Council had before it a Hotel Fresno renovation project.
A group of Southern California developers with a worthy track record in Fresno wanted to turn Hotel Fresno into a housing-retail project. It was to be a $16.5 million job.
The financing included a $900,000 loan from City Hall (federal housing funds controlled by the city), a $1.9 million Fresno Redevelopment Agency loan and an $11.1 million loan through a federal program.
The council on Sept. 29, 2011 had to approve the $900,000 loan. The council did so, on a 5-2 vote. Lee Brand and Clint Olivier voted no.
Then, in one of those oddities that only a free government can devise, the council (at Andreas Borgeas’ suggestion) said to the developers: Our vote is to merely “appropriate” the money. We won’t actually hand over the money until you give us better studies on projected costs and revenue.
Everybody stormed out of the council chamber shouting: Hotel Fresno — it’s reborn!
Then everything went on the backburner. Nothing has happened for 17 months.
Well, actually two things have happened. First, officials from the federal Housing and Urban Development Department came through town and dug into City Hall’s oversight of federal housing dollars. The HUD folks didn’t like what they saw. Among other things, they killed the proposed $900,000 city loan of HUD dollars to Hotel Fresno.
And, as requested by Borgeas and the council back in September 2011, the Hotel Fresno developers did another appraisal of the Hotel Fresno building.
That’s what Marlene Murphey told Bradley on Monday. She said the $1.9 million RDA loan to the developers is still on the books. She said city officials are still keen on making that loan. She said the developers could very easily turn in another application to get that $900,000 loan of HUD dollars controlled by the city.
And, Murphey said, the new Hotel Fresno appraisal came in at $15.5 million. The old appraisal had been $14.4 million, she said.
So, in the course of 17 months, the Hotel Fresno property appreciated 7.6%.
(Murphey emailed me on Tuesday morning, saying the appraisal actually is $15,150,000. That’s a 5.2% bump from the first appraisal.)
No one on the Oversight Board batted an eyelash.
I walked by the Hotel Fresno on my way back to the newsroom. Now, I’ll admit I don’t understand what “appraisal” means when it comes to real estate. I assume it means: On the open market, the Hotel Fresno site should fetch $15.5 million from the buyer.
If that is the definition of “appraisal” in this context, then that means just to buy the Hotel Fresno site — as is — would cost one-third as much as it cost City Hall in 2001-2002 to build Chukchansi Park, one of the best minor-league baseball stadiums in America.
It was Council Member Brand who, back in September 2009, raised the most questions about the Hotel Fresno renovation project.
I called Brand on Monday afternoon after I got back to the newsroom. I told him what I’d heard at the Oversight Board meeting — Hotel Fresno, as is, now commands a $15.5 million price tag.
Brand is usually pretty easy-going. But this time I had to hold the phone away from my ear.