The redevelopment project on the site of the closed Redlands Mall may have been approved last month, but it could be 2037 before work is finished.
The Planning Commission on Tuesday, June 14, unanimously recommended the City Council approve a contract for the State Street Village project that spells out some details, including a timeline and city fees.
If the council approves the agreement, the builder would have five years to start construction and another 10 years to finish the planned five mixed-use buildings and one retail building downtown. The mixed-use buildings as approved by the city include 700 housing units in structures up to four stories tall.
Commissioners wondered if the development impact fees would cover the effects such a large development would have on the city, and if anything could be done to shorten the project timeline.
“Fifteen years is a really long time,” Commissioner Karah Shaw told colleagues as she tried to find a way to shrink the timeline to help both the developer and the public.
Typically the right to build approved projects lasts for two years and can be extended for up to three more years, according to a written report for the meeting.
If the developer misses the deadlines the entitlements are no longer valid and the agreement terminates, Development Services Director Brian Desatnik said at the meeting.
The reason for the protracted finish line is CVS Pharmacy, the last remaining tenant of the mall, which has 15 years left in its lease, and the developer reported it’s been difficult to get the store’s corporate headquarters to agree to moving the profitable location.
The developer “has almost $20 million invested in this project,” Desatnik said. “Their carrying costs are significant, and there’s very little income being generated by the property at this point, including the CVS lease, so they have pretty strong incentive to continue to move the project forward (quickly).”
Shaw asked if a stricter timeline would give developer Village Partners leverage to get the pharmacy to move.
Michael Morris, a principal with the developer, said at the meeting the pharmacy chain is a Fortune 100 company headquartered in Rhode island.
“We’ve found that threats don’t work with a company like that, they’re bottom-line driven,” he said. “Their rent was set in 1975,” he added, when the mall was first being constructed, and has remained flat, which is well below market.
While two of the buildings cannot be built without moving the pharmacy, the rest could end up being built around it.
Commissioner Mario Saucedo shared concerns he heard from the public about the adequacy of the development fees to cover impacts.
The agreement requires that current categories of fees be applicable to the project, but not any new categories if they are created. The agreement also says the developer can get fee credits for the amount of existing structure floor area to be demolished.
Brian Foote, the city’s planning manager, said floor area credits are not an unusual request in such agreements.
“For example,” the agreement reads, “if OWNER demolishes 1000 square feet of retail space within the Redlands Mall, OWNER is entitled to a fee credit in the amount of Development Impact Fees which would be imposed by the City on the construction of 1000 square feet of new retail space. The credits may be used for Development Impact Fees for uses other than retail space.”
The mall has 173,000 square feet of retail space.
The redevelopment project was approved to construct up to 71,778 square feet of commercial floor area on the ground floors of the buildings, most of which will have several floors of housing stacked on top.
Desatnik said the fees would not be calculated until the applicant is closer to pulling building permits.
Foote noted a socio-economic study prepared for the project found for every dollar the city spends, the project will bring in $2.66 in revenue.
Other key provisions of the agreement require:
- Public easements over the plaza and pedestrian paseos for public access.
- The city to issue permits for up to 24 events in the plaza per year.
- The city to be able to use the plaza for 12 days a year that don’t conflict with the property owner’s events.
- The selling of parking spaces separately from residential units, which aims to encourage reduction of motor vehicles.
- Locking in the current land-use and zoning regulations applicable to the project, and assuring that the likely future adoption of the Transit Villages Specific Plan for the area around the rail stations will be applicable
The agreement will head to the City Council for final approval at a later meeting.