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Newest Downtown parking lot deal a sign of shifting tides at City Hall

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The Fresno Oversight Board spent 40 minutes arriving at a decision that, once made, smelled like a done deal from the get-go.

The Board on Tuesday voted 6-1 to sell a small Downtown parking lot to City Hall for $420,000. Debbie Poochigian voted no.

The property, called Lot 2, is near the north end of what used to be Fulton Mall (but is rapidly returning to Fulton Street). The lot, a bit more than an acre in size, lies between the Fresno Housing Authority headquarters and Tuolumne Street. It sits amid other parking lots.

Several questions were before the Board (which plays a powerful role in the state-mandated dissolution of the old Fresno Redevelopment Agency). Lot 2 is owned by the RDA, now called the Successor Agency. Does the Board endorse the city’s desire to buy Lot 2 at its appraised value of $420,000? Does the Board sell the property at auction? Does the Board give the city a “right of first refusal,” meaning the winner of the auction would lose her prize if City Hall after bidding ended simply promised to pay a few bucks extra?

The Board saw things City Hall’s way, which made the final two questions irrelevant.

Forty minutes is a lot of time to spend on what, in retrospect, appears like a ho-hum affair. There was some concern from several Board members, Poochigian foremost among them, that the $420,000 appraisal was too low. Some Board members, Doug Vagim foremost among them, wondered what City Hall wants with a small parking lot. Several board members had a chuckle at the City Council’s expense – the lawmakers over the past six months couldn’t decide whether this notion of a “right of first refusal” is good public policy or not.

Everything came down to this: High-speed rail has folks eyeing deals. We’re talking big money. And when you talk big money, you have to get behind closed doors to figure out what’s really going on.

I can’t get through those closed doors. But I can guess.

Let’s briefly return to the Oversight Board meeting.

City Manager Bruce Rudd, speaking for the Administration of Mayor Lee Brand, told Board members that Lot 2 “is an integral part of a larger and more strategic effort to revitalize our Downtown, which, in many ways, is already generating new investment. You can look around and see, most recently, the announcement by Bitwise, for example – the projects in South Stadium and the Cultural Arts District park, as well. I would ask the Board to consider those types of investments” as it ponders the city’s request.

To those who suggested the city was getting a sweetheart price, Rudd said the value of a property “is not necessarily defined by the monetary worth of an asset. It can also include the importance or usefulness of something such as this property that we’re discussing today. In this case, we would ask the Board to consider the importance and usefulness of Lot 2, and the role it plays in the overall effort to revitalize our Downtown – and the success that has already occurred when the city is the one who is able to control the destiny of our Downtown.”

Rudd hadn’t fully communicated his thought. But the city manager on this day was careful not to load each comment with too many words. He waited. Sure enough, Board members kept chewing on the appraised price. That allowed Rudd to add the key piece to his definition of market value – Lot 2’s enhanced value once City Hall is in control.

“We are going to be an integral part as to whatever happens, because at some point in time we will be involved in the project and we will have a large say,” Rudd said. “We believe that if we are able to buy the property at its current appraised value, that would help mitigate the future costs of development,” whether it be a public, private or public-private venture. City Hall ownership, Rudd added, “allows us to dictate what will be developed and what the terms of that development will be.”

Fine and dandy – under City Hall ownership, Lot 2 has a better chance of being a logical part of a top-down planned development throughout Downtown Fresno, with Fulton Corridor and the bullet-train station as the center point.

But leading up to Tuesday’s meeting, City Hall wasn’t the only potential buyer of Lot 2. The Housing Authority also showed a keen interest in ownership. Then came the meeting. The Housing Authority suddenly had a change of heart.

“Wow, what a confusing situation for us,” Housing Authority Chief Executive Preston Prince said during the public comment period before the vote.

The Housing Authority, Prince said, wants the city to get Lot 2 for $420,000. “It’s a really important opportunity for the city to do something spectacular, and it’s not just Lot 2,” Prince said.

Yes, Prince acknowledged, it might seem odd to an outsider that the Housing Authority had somehow changed from City Hall’s opponent to City Hall’s ally.

The political landscape, Prince said, “has changed dramatically – (we have) a new mayor. A new council has come in and they’ve said there is a way to partner on this property. So, we really do support the idea of the city getting control of the property and working with us collaboratively; working not just with the adjacent property owners but all kinds of development partners in the community to come up with what is the best development idea for that site, not just Lot 2 but the whole area.

“I think that (the issue) is about a more comprehensive development. I think public control is really important at this juncture. (But) it is not public development and it is not public ownership down the road. It has to be a public-private partnership. And the underlying assumptions as we’ve been looking at developing our property is that we’re not going to be the developer. We’ve going to have to bring in private enterprise, someone who brings us equity, who brings us know-how, who brings us all kinds of expertise. And I think we have to weigh that in partnership with the city about who’s the best one to bring into his situation.”

What does all this mean?

Maybe it means this: The north end of the six-block Fulton Corridor between Tuolumne and Inyo Street is desperate for a complete makeover. This is the doorway between the much-improved Cultural Arts District and the essence of Old Downtown Fresno.

This “doorway” is pretty darn ugly now, what with a blockhouse-style drug store on one corner (with a rundown parking lot) and the Housing Authority headquarters on the other corner (with even more rundown parking lots). It’s no secret that Prince got along famously with Mayor Ashley Swearengin. Prince wanted to put housing on the area that includes Lot 2. The Housing Authority’s mission is, to a large degree, low-income housing.

Lee Brand is now mayor. The City Council has a different makeup in wake of the 2016 elections. Some on the council would like to see the Lot 2 area turn into something different than low-income housing. Downtown Fresno, for all the talk about a dearth of housing opportunities, is already awash in low-income or “affordable” housing choices. Downtown, these council members suggest, needs something unique and refreshing to enchant bullet-train customers and attract visitors from throughout Fresno and the Valley.

Cliff Tutelian is a successful Downtown developer. He turned the old PG&E building across Tuolumne from Lot 2 into 1401 Grand, a building with renewed life. Tutelian had a deal with the old RDA to use Lot 2 as parking for tenants in 1401 Grand. Tutelian at one time very much wanted to buy Lot 2, and was willing to pay considerably more than $420,000. Tutelian was quiet on Tuesday. He didn’t even show up at the meeting.

Tutelian knows how to get the ears of council members and a mayor.

Perhaps Tutelian, City Hall and the High Speed Rail Authority (whose local office is in 1401 Grand) are periodically chatting over coffee about the possibility of a public-private development of the north end of Fulton Corridor. That’s what I hear at City Hall.

If so, that would suggest loyalties and alliances at City Hall are shifting with a new mayor and council in place.

Preston Prince is a smart man. He knows how to pivot.


Photo: Downtown Fresno Partnership

George Hostetter
George Hostetter is The Sun’s Fresno Civic contributor – covering the City of Fresno, County of Fresno, and Fresno Council of Governments.

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