Wednesday, June 19, 2013
The timing on this rebranding couldn't be any better. Many businesses have opened along K St. The rebranding effort won't guarantee their success but it will certainly help. At the same time, the rebranding will be used in leasing and marketing efforts related to the 700 Block, 800 Block, Marshall Hotel, Greyhound, and Downtown Plaza WHILE those projects evolve before our eyes rather than after their completion.
I like it. I like how it pays homage to what many called it before and I think the timing is right as so many businesses have opened over the past couple years and so many more are planned over the next few.
Jeffeff, there's PLENTY of reasons to visit K St. How blind are you? K St between 10th to 13th has been dramatically cleaned up. Have you tried any of the new businesses? Mayahuel is one of the best Mexian restaurants we have. Ella is a fine dining place to bring friends from out of town who always walk away impressed. Same with Esquire Grill. I had a great time recently watching Batman & Spiderman in IMAX. District 30, Pixza Rock, & Dive Bar are packed all the time and not just on weekends. Pyramid, Ambrosia, Crest Cafe, Crest Theater, KBAR, the Cabaret, Social, Broadacre, & Estelle's are all great options. As are Chops, Parlare, Grange, and Marilyn's for live music. The City made major Streetscape improvements on the 700 Block and at Lima Park. They relocated a light rail stop to 7th St from K St. The mall just got new owners! A MAJOR redevelopment project is aiming to break ground soon on the 700 Block that will provide around 15 new retail concepts and 200 new residents. The storefront of the Kress Building on the 800 Block was recently remodeled. 24 hr fitness expanded big time and is packed. The Greyhound Station finally relocated. Cars are back on K St and the Hotel Berry just got renovated. The Marshall Hotel plans to be remodeled. California Family Fitness plans to be open next to Dive Bar. I pound the pavement around K St every damn day for the past 10 years. I am shocked someone would say they've worked downtown and not noticed all the improvement and not be able to come up with one reason to come have fun with friends downtown or get really smart and LIVE downown.
The key is for those that own property and/or businesses in those special assessment districts to not "care less". Instead, the goal is to get them to come together and make sound decisions to improve their district through maintenance, promotions, events, advocacy, etc. Branding plays an important role in that.
The majority of the DSP budget comes through collection of a special tax assessment and through grants given usually to be used for specific purposes. Line items in budgets are allocated and approved by the DSP Board. The DSP Board is made up of a collection of downtown property owners. I've spoken to DSP staff and there are plans to increase power washing and get JMA Ventures involved more. The purple banners around the 800 Block corner are also in those re-branding plans from what I understand. 20SomethingSac, have you heard that is not the case?
Its easier to increase specific budget line items (like power washing) when the economy is doing well and property owners are more inclined to increase the special assessment they impose on themselves. Its also easier to increase specific budget line items when the DSP illustrates how it successfully implemented grant monies it received for a specific purpose. Value of downtown properties have not been impacted as much as the suburbs but they still have been impacted. The other hardship the last 5 years is that fewer significant projects that include dense housing have been completed because banking tightened up on new construction loans.
I imagine its been a bit tricky for the DSP; how to encourage and promote growth in downtown while at the same time facing budget challenges and less development. To make statements though describing DSP branding efforts as "premature" and that their budget "should instead be used elsewhere" aren't quite accurate. We should have deeper perspective on what is going on with K St and downtown both historically and going forward. We also need to note that despite the economic hurdles these past 5 years there is still progress being made.
I am encouraged. There has been momentum in downtown the past couple years after decades of trying to to fix some of the mistake of the past. Yes, some of those mistakes were unfortunately made by the City at the taxpayer's expense. This recent momentum though has resulted in a growth and value. Places like Ella, Mayahuel, Pizza Rock, Dive Bar, KBAR, Oishi, District 30, Broadacre, Blackbird, and Estelle's are giving legit hope. They are paving the way for more significant projects (with a good amount of housing) to start. We will soon enough see construction at the 700 Block and Marshall Hotel. The sale of Downtown Plaza to JMA Ventures is also key. A revamp of that combined with everything else already in motion will really change our downtown over the coming few years. Remember, K St from 10th-13th is already cleaned up. The projects I mentioned above all give hope that the rest of K St from 9th-7th and the mall itself will follow. The timing on the branding is right.
A couple weeks ago around 6pm I was walking on the 800 Block. There was a group of teenagers loitering in front of the Kress building at 818 K Street. Two young ladies within the group were in the midst of an argument that transitioned into a full on physical altercation pouring out into the street. A car drove by and slowed as they saw what was going on. I watched as they stopped and called 911. I stopped and called 911 as well. Within about 5 minutes, a bike copy appeared and began to handle the situation. I work and walk K St a lot and I see a lot of the positive changes occurring. Cars on K is just the latest. The new venues are busy and have become a regional draw. I've talked to servers and managers at Pyramid, Quiznos, and Ambrosia. They all seem to strongly feel that the new venues, relocation of Greyhound, and now the return of cars have been a positive impact on not just revenues but also on crime. I feel the same way. More businesses and more momentum is coming too. Estelle's Bakery is opening soon. Mayahuel seems to have hit its stride. And Ella looks to have not just strong lunches and dinners but also solid happy hours. I see the plans for a significant amount of more housing, the potential sale of Westfield and what that will hopefully turn out to become (hopefully higher education related), and approval of the new Entertainment Complex and I see a lot of positive things occurring in our city which is amazing when i think about the current economic climate. That's my two cents for what its worth...
I respectfully disagree. Restaurants opening and closing is typical of any economic climate. New restaurants have opened or will be soon during the same time as recent closures. Examples: BarWest, Restaurant Thirteen, Firestone in the old CPK, and the new restaurant by the Golden Bear guys in tne old Hangar17 space. Even during the real estate and tech boom days, the place where R15/Bernardo now is failed TWICE. A restaurants closing comes for reasons much moreso along the lines of poor management, poor service, or poor food. Visibility doesn't even matter as much. In fact, lack of visibility or a certain degree of "secrecy" to a place is almost preferred and seen as "cooler" these days by many it seems. But the hope is people learn from failures and bounce back stronger and more experienced than before on their next attempt.
800J is over 90% occupied. Majority of units are market rate. Only a percentage (15-25% range) are at low income levels. And Temple was just added as a ground floor tenant...1801L has a similar affordability mix. And that project is also over 90% occupied with a long wait list for its affordable units. Downtown and midtown rental market is STRONG right now. With much much more needed.
I agree with you in theory. But post recession a full on change like what we all dream of for I5 is just not possible. Do the most with the financial capability that's possible for the immediate future and move on to the next project.
Scoured with no luck huh? Well...any public private project has to go through a City Council hearing approval process. And all council agendas, recorded videos, and result summaries are archived on city websites along with detailed staff reports that note rate of return calculations, job generation numbers, and further reasoning for the recommendation to council by staff. So, for example, the 1000 Block K St project can be found on the March 10th agenda back in 2009. The Sharaton deal similarly. Or the recent additional funding to CADA for R St Streetscape improvements on an agenda a couple weeks. Additionally, and this is important, all approved docs are public docs. Docs like ERNs, DDAs, etc. Read through these and you'll learn comprehensive NUMBERS, rate of returns, terms of loans, terms of cash flow split from projects back to a city, etc. These docs are attainable at the County Recorders office if you are skeptical about redevelopment being an inefficient tool. Additionally, depts like SHRA never approve a deal w/o annual "Cost Certification" implementation to verify a project's construction costs, revenue, expenses, rate of return to city, etc.
I suggest you decide which redevelopment projects you want to look at. Then find out date approved and through City Council website read and learn the staff report, pro formas, financing, sources and uses, and associated recorded DDA/agreement. You can take it then further and through SHRA or Economic Development ask for public docs monitoring the completed project and return back to the city. And through the County Assesor you can find out the property tax generation difference before and after the redevelopment's completion for the said property and surrounding area any given tax year.
I hope these thousands of additional words provide guidance on something that you seem to have had no luck with. I'd really look forward to continuing this dialogue once you've done this type of specific analysis of docs related to one or several specific completed redevelopments in addition to the "pavement pounding" I suggested before. I'd be curious then what specific concerns you still had. I also have a few questions for you: 1) What are your favorite cities in the US and why? Which are your favorite in CA and why? 2) What do you see as a more efficient alternative tool over redevelopment in order to generate additional tax revenue for city services and stimulate development in a city?
Its tough to have a dialogue with someone when they don't respond to the specific points that you bring up. You haven't addressed now after a few opportunities the impact redevelopment has on increases to property tax assessment not just on the property being redeveloped but on surrounding properties. You haven't addressed what hotel redevelopments mean to a City in the form of hotel tax and sales tax generation both in the hotel and in surrounding businesses around the hotel. All that you responded to what that sales tax return to a City is very small without touching on the other revenue generation sources.
If you don't believe in job creation then I suggest you go pound the pavement. Go talk to all the management and staff at the new businesses at the 1000 Block. Go talk to the Parlare owners (Dale and Sheena) and get their opinion on what redevelopment of the Citizen and the 1000 Block has meant for their business. Same with the owners of Chops, Ambrosia, Pyramid, Temple, Mikuni, etc etc etc.
City Council Staff Reports typically include detailed projections, numbers, deal structure, and return on investment numbers. I also suggest you get involved with groups like NAG, SOCA, the MBA, attend Planning Commission hearings, City Council Hearings, etc. Those are the best areas to listen and get a better understanding of how these deal structures are put together, why they are put together, and what they mean in terms of future impact both financially and from a community perspective.
You say money "diverted". I keep saying money used to produce more money. I offer case studies. Statistics. Numbers. Examples. I note increases to property taxes, sales taxes, payroll taxes, hotel taxes, tourist taxes, job creation, permit fees, school fees, and provide a clarification that it tends to be low interest loans and not pure "subsidy". You still look at it and see money being taken away. I look at it and see money used to produce more money. Respectfully, I say lets just agree to disagree.
This has nothing to do with "pride". It has to do with fact cause and effect. Your response is simply that job creation figures used by pro-redevelopment types is unsubstantiated? A weak response that neglects the other positive points related to redevelopment that were highlighted. Before that your response was that net sales tax return to Cities from redevelopment is minimal? But you neglected to respond to increases because of redevelopment as well on property tax, hotel tax, payroll tax, and other revenue generation.
Lets look at some local case studies. Take first the Citizen Hotel since we already spoke of the Sheraton Hotel. We didn't even touch on the tax revenue generated directly (hotel tax, tourism taxes, car rental taxes, etc) and indirectly (increased sales tax from visitors, etc) from the redevelopment of a hotel project like this one. These figures are so significant that they are the primary mechanism used in other cities to build sports and entertainment complexes that cost hundreds of millions of dollars! It would be interesting to note what the property tax of the Citizen hotel was prior to its redevelopments versus the current assessed value and the value 5-10 years from now when the economy improves. Now lets take the K St 1000 Block redevelopment as a case study. According to City Council Staff Report, a few hundred construction jobs and 180 permanent jobs were created. We already touched on the sales, payroll, and property tax generation. But what about the impact the three venues have on local vendors and suppliers as well? Think the restaurant equipment guy or the produce guy isn't happy that Pizza Rock opened? There was controversy at the time that the 3 "subsidized" venues would have a negative impact on existing entertainment venues. But all signs point to those businesses being as busy as they were at the peak of the economy. Finally, lets take the case study of the Elliot Lofts building where Mikuni and PF Changs are located. The governor LIVES there. The businesses and offices/lofts above have always done very well. What would the area and specifically the property values and their tax assessments be around 16th & J St had the Elliot Building not been redeveloped?
There are other key factors as well. The millions in permit fees that go back to the City from these types of redevelopments. Each of these projects pay significant per square foot SCHOOL FEES. The fact that often times redevelopment "subsidies" are not subsidies but actually low interest loans that get paid back to the City over time is worth noting. And finally, how about the idea that redevelopment besides actually financially providing a boost to City revenue also "speeds up" the development of an exciting downtown? In other words, how long would it take to make our City "cool" if redevelopment was a tool that was not at our disposal? This in addition to the benefit redevelopment financially gives through the revenue generation for city services?
The Redevelopment debate is an interesting one. But cogmeyer you didn't address the property tax increase impact point, the job impact point, or that the Sheraton redevelopment was what generated the revenue to redevelop the 1000 block. I brought up that last point b/c you brought up the "mermaid bar". Here are some more points to consider:
- Redevelopment creates more than 300,000 jobs each year, and many of them may not have been in California but for redevelopment.
- Infrastructure Cost Savings. Redevelopment project areas tend to be already served by utilities and other public infrastructure, which lowers the public and private cost of serving the new development. This is particularly true of existing transportation infrastructure, which is incredibly expensive to construct and financially challenging to maintain in good condition.
- Elimination of Brownfields. Redevelopment often transforms environmentally contaminated land and neighborhoods (known as brownfields) into economically viable and culturally exciting places, acting as a springboard for other public and private investment. This generates additional state and local tax revenues that would have been impossible without the investment.
- Lower Public Safety Costs. Redevelopment lowers public safety costs by removing blight and the conditions that attract criminal activity. This lowers the state’s and counties’ costs for prisons and jails, courts, parole and probation, mental health and other services. It also allows local agencies to focus public safety services in other areas of greater need.
- Significant Government Revenue. Redevelopment generates new income, sales and property tax for state and local governments ($2 billion per year by current count).
- Better Transit — Less Parking. Redevelopment can help make public transit systems more self-supporting and successful, reducing the number of vehicles on the roads that serve other parts of an urban area. This also helps address one of the most perplexing and expensive problems in urban areas: where to put parking and how much to charge for it. Think about it. Parking spaces and garages are some of the biggest wastes of urban land, but they are necessary because of the way we have chosen to grow in the past. That does not have to be the case in the future.
- Affordable Housing. Redevelopment is often accompanied by housing, both market rate and affordable, that meets important housing needs and reduces reliance on automobiles to access services and recreation in the urban core. Since 1993, redevelopment funds have helped build 98,000 units of affordable housing.
- Other Urban Amenities Follow. Development in redevelopment agency (RDA) project areas can create the critical mass for attracting cultural, restaurant and other entertainment opportunities to the urban core.
- Lower Carbon Emissions. Development in RDA project areas leads to lower per-capita and per-housing-unit carbon emissions, due to increased pedestrian, bicycle and transit use by the residents and visitors.
This guys does great work. Great to see him in action!
Its inaccurate to look at redevelopment as "taking away" money that could instead be used for city services. Redevelopment is a catalyst. It helps trigger MORE tax revenue to a city's general fund. If you want to fix a budget you can't just rely on cuts here and cuts there. Sure, you look at different costs and do what you can to reduce and be smarter. But to really solve a budget problem, especially during tough economic times, you have to significantly INCREASE a city's revenue stream. You have to use methods to stimulate and get more money. How do you do that? You increase property values in order to increase property TAXES. You generate new businesses, new jobs, and more sales in order to increase sales TAXES. And what happens when you do those two things? You increase the desirability of an area. What does that do? It makes more people want to live in that area. An influx of residents then further increases property taxes and sales taxes and so on and so on and so on....Naysayers complain about redevelopment funding a "mermaid bar". Well, keep in mind two things about that whether you like the mermaids and trucks or not. 1) The money used for that redevelopment CAME FROM a very successful redevelopment at the Sheraton that made the city (and thus city services like fire, police, and schools) a LOT of money. 2) That mermaid bar and that truck are projected to generate around a million plus in sales tax revenue annually to the city. And the momentum from the redevelopment of the Sheraton and the 1000 Block is now gaining more steam with Mayahuel opening, cars coming back to K St, the 700 Block, the 800 Block, Pyramid Brewery and Ambrosia Cafe revenue increasing, and Greyhound leaving. What does all that mean? Higher property values, more property taxes, way more sales taxes, more jobs....and a significant addition of revenue to the city to in turn use for city services.
Half the retail uses are proposed to be restaurant/bar oriented. Of that half, each brings something unique (a roof top dining area, a grandiose live music venue, a brewery, etc). Also in that half is a coffee/cafe/dessert diner use which provides utility to all the new residents to be introduced into the area. The other half of the retail uses are hard good oriented (several clothing boutiques, salon/spa, creative work/live loft space, a flower shop, etc.
John, my intent in bringing up the Maloof loan was not to suggest that the Maloofs have defaulted on the loan or are somehow trying to avoid it. My point was to emphasize that any deal for a new Sports & Entertainment complex in our downtown core would HAVE to include a solution to this debt as well as a solution to what happens to the existing Arco site so that Natomas is not compromised.
The City of Austin is one of my favorite or at least top 3 cities I've traveled to in the U.S. One of the things that Austin has done a great job of is giving tax incentives to corporations in order to lure them into establishing a headquarters or some sort of major presence within the city limits. Minneapolis is another city that has done this effectively. Another key to the success and vitality of both cities has been the strong presence of higher education. Sacramento needs to do a better job in both luring large corporations and installing more higher education facilities in and around the city core.
A Sports and Entertainment complex that focuses on events 365 days a week similar to what complex operators are doing in Kansas City and what Oklahoma City did before eventually landing the Thunder would continue the momentum in our downtown core. Especially if the Sports & Entertainment complex is put where the current Westfield Downtown Plaza site is located. This would really kill two birds with one stone. The complex needs to be flexible and have more than one professional team playing in it. Think of the possibilities of having pro hockey team, pro indoor soccer team, pro basketball team, and Division 1 college basketball tournaments all along with major entertainment acts and concerts. This complex should not be built around the Maloofs and believing that they must be involved in order for things to work out. The complex should financially make sense. That means minimal public subsidy other than donation of city owned land and creative revenue sharing of parking that results in a gain in revenue for the City. This would be in contrast to revenue going to the Maloofs as currently setup at Arco. The plan for the complex should allow for other uses on the Westfield site such as retail, housing, higher education, parks, amenities, etc. The plan for the complex should address the Maloof's $60 million plus existing debt and include a development plan for what to do with the existing Natomas site to keep it "as good" if not better than how it currently is so that the residents of Natomas are not negatively impacted.
Sacramento is not a pit. Its Midtown has experienced a renaissance over the past couple decades of restaurants, retail, art, culture, urban living, and more. We are the City of Trees, friendly and welcoming to the Gay & Lesbian population, have world class bike trails, rivers, and more. During the worst economic climate seen in a very long time we are still seeing exciting redevelopment projects being completed and moving forward. We are still seeing people trying everyday to make our city better. Think of the economic impact of having 10-20,000 plus people each night pour out onto our quickly developing K St and downtown after an event. Think about them consuming, living, and breathing our downtown prior to an event. I think about what AT&T Park has done for SOMA or what Petco has done for the Gaslamp Quarter of San Diego and think with proper planning and a focus on the financial we can do even better and improve our downtown core that much more.
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