By: David A. Smith
As we saw yesterday, Stockton’s economic decline became possible to arrest only with bankruptcy and its slashing of liabilities, which made the city once again creditworthy and which also enabled it to rejoin the community of municipal entities reinvesting in their downtowns. But to correct that neglect, and reanimate the hollow urban core, requires the first property re-entering the market to be financially and visually reinforced, so that both bankers and neighbors would be swiftly convinced it would work:
Looking on the bright side
City Manager Kurt Wilson [hired 10 weeks after the City filed bankruptcy] said. “This is a really well thought-out project. It’s going to get more people on the street, make it safer and make it more inviting for more projects like this in the future.”
The non-recoverable costs include the inherent ongoing subsidy implied by rent-restricting apartments for low-income families.
Sources used in this post
Stockton Record (September 25, 2014; buff blue font)
Stockton Record (January 25, 2015; siena font)
Stockton bankruptcy decision of Judge Klein (February 4, 2015, pdf; olive-green font)
Sacramento Bee (February 5, 2015; gray-blue font)
CBS Sacramento (March 5, 2015; forest green font)
Stockton Record (March 30, 2015; kelly green font)
In addition to the cost-value gap of affordable housing, therefore, is a second cost-value gap – that of adding back the non-revenue infrastructure needed to re-establish downtown as an upwardly trending area:
The developers have said that for Cal Weber to move forward, they would need to be successful in a competitive process to win tax credits from the California Tax Credit Allocation Committee.
A week later, TCAC approved the LIHTC allocation, as reported in the Stockton Record (September 25, 2014; buff blue font):
Downtown advocates for years have dreamed of residential housing in the heart of Stockton, creating a center-city buzz and a humming urban ambience.
A decision Wednesday by a state body in Sacramento is expected to bring the decades-long wait for such a development to an end. The proposed 40-unit Cal Weber affordable housing project is a go.
Decades of waiting. If proof were needed that Stockton’s downtown will not recover on its own, there it is.
Amtrak to Oakland, rolling through Stockton in 1980
“We’re excited to see this project move forward,” said City Manager Kurt Wilson. “I think it’s a big first step toward getting people into downtown.”
It should be, given its location.
Downtown Stockton (815 Weber), 1930s
Though the developers and city officials say Cal Weber could be just the needed spark for downtown reinvigoration, at least one business owner has reservations.
Any time there’s development, there will be naysayers: if the market is hot, they manifest as ecological NIMBYs; if it’s cold, they’re doomsayers.
Kristyn Wilson [No relation to the city manager, I hope J – Ed.], who owns a downtown insurance agency, said last week she fears Cal Weber will wind up as just another flophouse in the heart of the city and is waiting to be convinced otherwise.
Given that Ms. Wilson has undoubtedly not bothered to review the mountain of evidence available to Ms. Wilson (the track record of LIHTC properties around the state, say, or the design and construction requirements), nothing will convince her, and she will remain invincible in her ignorance.
“People won’t come downtown because of the crime that’s downtown, the stigma behind downtown, the panhandlers downtown.”
If it’s such a horrible place, Ms. Wilson, why do you remain downtown?
She also speculated willing residents might be scarce.
“I don’t think adding additional affordable housing is going to help,” she said.
Does that mean you won’t sell them insurance? After all, if there’s all the crime you say, they’ll need renter’s insurance, won’t they?
Garcia moved back to Stockton to revitalize it
“This is going to be a well-managed project,” Garcia said. “It’s going to be for working families.”
That’s certainly how it has been designed:
Plans call for Cal Weber 40 to have 28 apartments with two bedrooms and one bathroom, and 12 more with three bedrooms and two baths.
The 2-BR’s will be for couples with no more than one or possibly two little children, and the 3-BR’s will be for families with 2-3 children.
“I hope people don’t immediately dismiss it as a project that’s not going to produce the desired results. It’s going to create more street-level vibrancy.”
Said Flaherty: “It will be a place where (residents) can work and afford to live. It will be a new product.”
It may well be the first flats-over-shops mixed-use development in Stockton’s history. A century and a quarter ago, when the Cal Weber building was constructed to house the Columbus Buggy Factory, land was plentiful and people built their own homesteads.
“It won’t be an old hotel converted to (single-room occupancy). It’s going to be something downtown Stockton can be proud of. It’s a catalyst.”
Indeed, change is being catalyzed in downtown Stockton, as reported three weeks later in the Stockton Record (March 30, 2015; Kelly green font):
Raymond Cavazos, left, and Samuel Mora put up fencing as work begins for construction and renovation at the site of what will be the Cal Weber 40 affordable housing development at California Street and Weber Avenue in downtown Stockton.
To begin with, construction is work, and that means jobs.
Workers were busy setting up fencing around two downtown buildings and a parking lot Monday morning, a prelude to the start of construction on an affordable-housing development touted as an early step toward revitalization of the city’s core.
Wrapped in swaddling clothes, and lying in downtown Stockton
Cal Weber is not alone; more mixed-use mixed-income development is on the way:
A second affordable-housing and retail project, dubbed Grand View Village, could break ground a year from now if all goes according to the developers’ plans. Grand View is to be located at Hunter and San Joaquin streets and Miner Avenue.
Brighter skies ahead for the site of Grand View Village?
A massive 15-block housing and commercial project for east-central Stockton, announced March 22, will take significantly longer to unfold, developer Ten Space Inc. says.
Change is coming, and with change, hope?
“This is just the beginning, hopefully,” Flaherty said, ”of what is going to take place over the next ten or twenty years.”
None of it would have been possible without Stockton’s emergence from bankruptcy, which in turn required Stockton’s entry into bankruptcy.
Officer Joseph Silva, a police spokesman, acknowledged that fighting violent crime is foremost among his department’s concerns. But Silva said the department is hopeful a sales-tax-fueled hiring push that so far has moved slowly will eventually make his force better able to respond to nonviolent lawbreaking.
“As the department is growing, we’re going to be able to start focusing more on the quality-of-life issues and blight,” Silva said.
And somewhere in Sacramento, CalPERS, whose pension contributions were protected in this bankruptcy, is fighting other cities’ restructuring of their debts, and hence is retarding their economic revitalization.
Benguerel said he believes a downtown recovery will never be fully realized so long as the problems he so frequently witnesses are not eliminated.
“I think everything else is destined to fail,” he said, “unless they clean it up.”
That takes bankruptcy restructuring, and CalPERS is institutionally against it. In another post I expect to return to CalPERS’s evil-empire behaviors, but for now let me quote, in movie-credit-previews-style, two passages from the judge’s decision:
(Page 8) The authority of CalPERS to interject itself into the potential modification of a municipal pension in California is doubtful. As CalPERS does not guaranty payment of municipal pensions and has a connection with a municipality only if that municipality elects to contract with CalPERS to service its pensions, its standing to object to a municipal pension modification through Chapter 9 appears to be lacking.
Translation: CalPERS, you have no business disrupting and obstructing municipal restructuring, including City employee pension benefits.
(Page 14) Although the PERL contemplates that a municipality is free to shift to a different pension administrator, the ferocity of CalPERS’ behavior in this case indicates that it has a policy of, by overt and passive aggression, resisting attempts to make such shifts.
Translation: Even though CalPERS has no economic reason for caring if municipal pensions are reduced, it acts consistently and nastily as if it were in the employees’ pocket.
Judge Jules rules?