Fry’s site owner reluctant to redevelop just as city’s NVCAP costs may escalate

August 16, 2019 – Palo Alto Matters

The North Ventura Coordinated Area Plan will return to City Council for endorsement of an expanded planning process for the 60 acre area surrounding the Fry’s Electronics property. The Fry’s Electronics site, a 12 acre parcel at the core of the study area for the NVCAP is coveted in the city’s Housing Element for its potential for a “realistic yield” of 221 new housing units. Indeed, the potential redevelopment of the site following the upcoming expiration of the Fry’s Electronics lease was a driving factor in initiating the NVCAP to ensure the area evolves into a vibrant, well connected, mixed-use neighborhood. The city received a two-year grant from Caltrans in 2018 to develop the coordinated area plan, with local matching funds provided by the Sobrato organization, the property owners for the Fry’s site. 

To accommodate council direction from a March 11 Town Hall meeting, process concerns expressed by NVCAP Working Group members, and an expanded environmental analysis related to the Fry’s site’s historical significance, staff hopes to receive a one-time, two year extension of the project deadline under the Caltrans grant. 

March council direction included study of alternatives for naturalizing Matadero creek, analysis of stronger housing, displacement prevention, and office size limits, and objective accounting to assess impacts of potential zoning changes on both property owners and community amenities.

On Monday August 19, staff will seek council endorsement of a revised overall approach and schedule for the project and staff’s response to Working Group members’ concerns as well as authorization to expand the scope (and cost) of the planning consultant’s contract and add a new contract to study the feasibility of naturalizing the creek.

If approved, the expanded scope of the NVCAP project will escalate costs by 40 percent, including up to $367,112 that will not be covered by the Caltrans grant. In order to fund the expanded scope, staff proposes exploring opportunities to share plan development costs with large property owners in the study area. 

Recent indications that the Sobrato organization has little interest in redeveloping the Fry’s site suggests a change of heart since their 2018 investment of $138,000 in the NVCAP planning process. Whether that is due to the direction the NVCAP is heading, a hardening negotiating position, or other factors remains to be seen. However it does complicate the framework for council’s August 19 decision making. 

Without redevelopment of the Fry’s property, the NVCAP’s housing potential would be significantly diminished as would opportunities for enhanced neighborhood amenities and mobility across the 60-acre plan area. The city must nonetheless complete the NVCAP within one to three years (depending on extension of the Caltrans grant) or assume responsibility for moneys already paid out of the grant. Adding new investment in the NVCAP, despite diminished expectations regarding the Fry’s site, entails risk. But opting out of the proposed new scope for the project could undermine credibility and limit the future promise of the plan. 
This item is scheduled for council action on August 19, beginning at 6:50 pm. Click here for the staff report.

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