Publication Date: Friday, February 04, 2005
Into the Fry-ing pan?
Into the Fry-ing pan?
(February 04, 2005) Fry's area under scrutiny for possible redevelopment project
by Bill D'Agostino
The neighborhood just south of Page Mill Road, between El Camino Real and the Caltrain tracks, is not inspiring: shuttered storefronts, low-end hotels and messy auto shops are rampant.
But is it a burden on the entire Palo Alto community? The city believes it might be and is considering a redevelopment project, centered on the Fry's Electronics store, to revitalize the area. City officials refused to say how large an area they were studying.
"It's very preliminary," Planning Director Steve Emslie said.
To create a redevelopment project, the city would need to designate the area as "blighted," a controversial legal label that has sparked lawsuits and protests throughout California.
The legal hurdle the city must jump is high -- it would need to show that the blighted area "constitutes a serious and growing menace ... to the public health, safety and welfare" that "cannot reasonably be expected to be reversed or alleviated by private enterprise or government action, or both, without redevelopment," according to California law.
For some, the idea that any area of this posh city -- especially one that boasts a Mercedes dealership -- could be considered blighted is at best humorous and at worst illegal.
"Blight is relative. This is Palo Alto," said commercial property manager John Tarlton. "Show me an area of Palo Alto that would pass muster with a Chicago council and I will give you a prize."
"I do not believe that redevelopment law was written to benefit relatively affluent communities like Palo Alto," former Mayor Gary Fazzino said. "I do not believe that any area of Palo Alto qualifies under the state redevelopment definition of a blighted area."
The ramifications of the designation would be extremely serious -- property tax dollars could be siphoned to the city away from other public agencies, including the school district and community colleges.
"It makes us nervous because we're property-tax based," school board member John Barton said.
Those tax dollars would have to be used to revitalize the area, with 20 percent automatically earmarked for affordable housing. Under the law, the city would also gain a greater ability to use eminent domain to take and transfer private land.
The city recently narrowed in on the area around Fry's computer store after studying two other areas of town. Officials insist the site appears to have the conditions necessary for it to be deemed blighted.
"There's a lot of vacancies and older buildings that don't meet current building standards," Emslie said.
Tarlton, who manages 70,000 square feet near Fry's, said making the area a redevelopment project "could be a problem for me or it could be a real opportunity."
During the next few months, the area's shape and size will be determined and additional research will be done. If city administrators agree to move the project forward, they would ask the City Council this summer for a formal study.
One of the focuses of the project appears to be keeping Fry's in Palo Alto since it's one of the city's largest sales tax producers. In 2019, the Fry's property is planned to be rezoned for housing.
"It's a successful store for them and it could be more successful," Emslie said.
To keep the business in the area, the city might try to assemble various properties -- owned by different property owners -- along El Camino Real for the electronics store. "It would require redevelopment to make that happen," said Dick Jacobsen, a partner with WSJ properties, which owns the Fry's property.
The city has already lost a major sales tax generator from the area. Last year, the Nissan dealership along El Camino shut down.
Redevelopment in Palo Alto is an idea that has been in limbo for nearly two years. City Manager Frank Benest pushed the City Council to form a Redevelopment Agency in 2001.
But the city's first redevelopment project, around the Edgewood Shopping Center, ended in 2003. At that time, the related housing project was disparaged by neighbors and the city worried it would lose more dollars than it gained because the state was dipping into redevelopment revenues to balance its huge deficit.
Palo Alto officials are not shy about saying that part of the reason for creating a new redevelopment project would be to increase their tax base. Benest argued such a tool is needed for the city to meet its ambitious objectives.
"If you have goals related to enhancing infrastructure, promoting affordable housing and revitalizing the city's economic base ... redevelopment is one of the key strategies cities in California use."
Staff Writer Bill D'Agostino can be e-mailed at bdagostino@paweekly.com.
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