Don't Take the Baby's Candy!

Buried in the middle of a Daily Journal article with a headline about free parking is perhaps the biggest news-no-one-knows-about in B'game and it has nothing to do with free parking.  In fact it's more like the opposite--how to ruin the parking situation downtown.  The City Council is considering an Exclusive Negotiation Agreement with Grosvenor USA Ltd. to enable the developer to assess how to build on Parking Lot E and the Post Office site.

The concept, which encompasses the post office land, includes an “urban village” with 100 residential units, 35,000 square feet of retail and/or restaurant space and 125 residential parking spaces.

Let's put aside what a bad idea this whole thing is because there is nothing "village-like" about it.  Not only do we already have the choicest "village" on the whole Peninsula, but we have yet to feel the impact of the Peninsula Ave. monster complex that San Mateo has foisted right onto B'game's border.

Aside from that problem, the idea of an exclusive negotiation agreement ("ENA") is just bad business practice especially when the "good faith money" the developer would put up to get this boon is refundable.  The circumstances that would trigger a refund are Grosvenor not buying the Post Office, the environmental assessment not working out, or Grosvenor deciding in 30 days that the project is "infeasible".

Topping that one-sided aspect is the idea of a "market delay" in Section 3.2.4 of the proposed agreement.  That says two quarters of 3% decline in the SF-San Mateo-RWC Housing Price Index would add time to the 18 month exclusive period.  Now with local real estate booming that is unlikely--but interest rates are on the rise and the Fed is getting less predictible with every Ben Bernanke speech.  The 10-year Treasury yield is up 85 basis points since early May.  But isn't that the kind of risk a developer should bear for exclusivity?

My next concern is the real kicker.  On page 11 of the agreement, it states

At this time, it is not known which, if any, elements of the Post Office structure maybe considered historic resources under CEQA.

That smacks of gamesmanship.  One need only go back to the Feb. 28th post here on the Voice to read that Criterion A and C for the National Register apply and that the Spanish Eclectic architecture and the interior are "remarkably well-preserved" --better than 90% of the other historic post offices in the country.  Has this train already left the station?  And if so, who's driving it?

 

Comments

[Anne]

Why would the city want to do an exclusive deal with anyone? That doesn't make any sense in a period when prices are jumping. It seems like we would be giving away an option for nothing in return. What skin does the dveloper have in the game?

[dtn]

That amount seems like chicken feed on a project this size. Whose brilliant idea was it?

[Russ]

I spoke before Council last night and spoke to the idea that now was not the time to sign an exclusive agreement but to do quite the opposite and reopen the proposal opportunity. My words fell on deaf ears. the council voted 4-1 with Council woman Baylock dissenting to move forward with the exclusive agreement. The common sense logic did not appeal to the majority of council members. Not sure why I bother to approach the podium when I know it won't provide fruitful. Feeling frustrated the morning after. Perhaps I will vent more later, but need to get to work this morning.

[JROC]

It seems like this concept fits the spirit of the downtown specific plan calling for high-density mixed use development. I am very concerned about losing more parking but it sounds like there is a plan to make it up elsewhere. One can sit forever waiting for a better time to make a move and then you find you missed the boat.

So is your concern the timing, losing the historical post office, the parking or simply any development downtown?

[Holyroller]

What does the title of this link mean?

[James]

Has the city council noticed the monstrosity of urban development on California and Peninsula? Retail is fine, but please, no more parking lots and no more downtown condos/apts! Out of town developers are sucking the life blood out of Bgame.

[Anne]

Right on James. That is exactly the point. And to Holy's question--my guess it it refers to the Grosvenor guys giving each other a high five as they walked out of City Hall and saying "man, that was like taking candy from a baby. what rubes these suburban politicians are". And you know what? They are right. Its sad but true that with one exception they don't appreciate the city theyhave been elected to guide. Very very sad.