The City of Fresno purchased a parking lot from a relatively unknown government agency on Tuesday (January 24). They plan to turn around that property, known as Parking Lot #2, in the name of revitalization. But, what the exact plans are for this property is the $420,000 question.

The seller was the Oversight Board for the Successor Agency to the Redevelopment Agency of the City of Fresno, created to sell public property that was once owned by the Redevelopment Agency (RDA). RDA were dissolved by Governor Jerry Brown in 2012 (more on that later).

At its monthly board meeting on Tuesday (January 24), the Oversight Board of the Successor Agency to the Redevelopment Agency voted 6-1 to grant the city’s request to buy the property at its listed appraisal price of $420,000. City Manager Bruce Rudd, representing both Mayor Lee Brand the city council, says they will turn around and sell that land to help improve the downtown area.

So, what makes this purchase unique? Last year, city council decided they didn’t want this property. As part of the RDA dissolution, a city has the first right to buy. The city council declined, recommending to the Oversight Board to sell it to real estate developer Tutelian & Company for $520,000 ($100,000 over the 2014 appraisal value). Council unanimously voted to do so on September 15, 2016 and later affirmed the vote again on November 3.

The Oversight Board took up the item at its October 19, 2016 meeting. The Fresno Housing Authority, through a letter to the Board, did not like the idea of a direct sale. It preferred an auction. A competing letter from Tutelian’s attorney wanted the Oversight Board to ignore the Housing Authorities request.

The letters also shined light on a deal that Tutelian had with the city to use Parking Lot #2 at no charge to help land High-Speed Rail engineering firm Tutor Perini/Zachry/Parsons downtown at the Grand 1401 building across the street on Tuolumne Street. The city wanted that as an inducement for the firm to use downtown as its Fresno base instead of north Fresno, as it had been planning to.

Cliff Tutelian, the namesake of his company, spoke at the October meeting, upset that the city indicated it would renege on its promise of free parking in Lot #2.

At the October Oversight meeting, member Larry Westerlund, also  Fresno’s Director for Economic Development and appointed by the mayor, pushed for auction to be the method of disposing the property. While any decision was tabled at the October meeting, it was approved 5-2 by the Oversight Board at its November 16 meeting.

That seemed to expose a rift between what city council wanted to do with the property and what then Mayor Ashley Swearengin wanted to do. Multiple sources have told GV Wire that the Swearengin administration wanted the Fresno Housing Authority to land the property to possibly build housing there.

The land known as Parking Lot #2 sits behind the Fresno Housing Authority on the Fulton Mall and Tuolumne Street. It is within the proposed Fresno Station District, Swearengin’s plan to rebuild downtown Fresno around the High-Speed Rail (the area where the lot in question is the North Fulton Gateway Sub-District).

 (image from GoogleMaps)

Despite the green light for an auction, nothing happened. Four months after not wanting the property, the city council talked about the item again at its January 12, 2017 meeting in closed session. Although the exact discussion has not been revealed, council decided they did want the property after all. They voted to re-authorize its right of first refusal to buy the property for $420,000.

What changed? Some say it was Lee Brand taking over as mayor.

An Oversight Board Primer

In 2012, Gov. Jerry Brown dissolved Redevelopment Agencies (RDA) across the state.  RDA were quasi-government groups whose mission was to reduce city blight. They were under different rules than regular city governments when it came to borrow money or levy taxes.  In Fresno, the city council doubled as the RDA board.

An Oversight Board was set up to help sell off the property that the RDA (still in existence somewhat as “The Successor Agency to the RDA”) consists of seven members, appointed by five different agencies.  The city is still granted the right of first refusal, meaning even if a bidder wins an open auction, the city can still opt to buy the property.

The members of the board are: Westerlund and Rene Watahira (appointed by the mayor); former county supervisors Doug Vagim and Debbie Poochigian (appointed by the county Board of Supervisors); Larry Hodges (appointed by State Center Community College District); Alan Hoffman (appointed by the Metropolitan Flood Control District); and Jeff Becker (appointed by the Fresno County Superintendent of Schools).

Now What?

At Tuesday’s meeting, Rudd said the city will plan to turn around the property for the same amount ($420,000). He did not indicate how the city will select who to sell to. He sees it as a public-private partnership to build retail, housing and parking. Councilman Oliver Baines, who initially pushed for the sale to Tutelian, tells GV Wire that they would rather sell to the person who has the best idea rather than put it up to bid.

An issue brought up by Poochigian was that if the land was sold to a public entity (ie Housing Authority or High-Speed Rail), property taxes would not be paid unlike if the land was bought by a private company.

Preston Prince, CEO of the Fresno Housing Authority spoke, saying his group supports selling the lot to the city. Diana Gomez of High-Speed Rail was also there. She told GV Wire that they were prepared to make a bid.

Real estate developer James Huelskamp also spoke of interest in the property. He mentioned to the board that he felt the appraisal price of $420,000 was low.

At the meeting, Westerlund this time around pushed for a direct sale to the city, abandoning his fervor for an auction.

The city council will discuss this item again as the Successor to the RDA in closed session on Thursday.

E-mail David Taub