At its Feb. 18 meeting, the Morgan Hill City Council decided unanimously to ask its staff to look into an “economic development incentive program” for current downtown tenants who face potentially massive disruption of business due to forthcoming downtown development.
The city’s preferred source for such a program would be leftover bond proceeds acquired by the Redevelopment Agency in 2008, according to Assistant City Manager Leslie Little.
The same subcommittee that reviewed the downtown property proposals also brainstormed the incentive idea as a way to provide relocation assistance to local businesses, Councilmember Larry Carr explained. That subcommittee consisted of Carr, Councilmember Marilyn Librers, members of the Economic Development Corporation and representatives of the local business community.
More than a dozen businesses lease space at the BookSmart and Downtown Mall sites, but they will have to move if the city’s negotiations with City Ventures on both properties are successful. City Ventures was selected as the city’s preferred developer for both sites at the same meeting, and the developer plans to build a mix of condominiums and retail/commercial space on the former RDA properties. (See related story.)
With the private developers involved, there is no legal requirement for the city or anyone else to offer the tenants relocation assistance, Carr said. But councilmembers would like to help if possible.
“The EDC was very clear there are businesses that could be harmed by construction,” Carr said. “Those are important businesses that are part of the fabric of Morgan Hill.”
Tenants at the BookSmart property are not just the book store. Restaurants Jesus and Peking, as well as Cherisse’s Hair Salon, United Academy of Martial Arts, Continental Stitch, Marco Polo’s Eastern Treasures and the Morgan Hill Access Television studios also lease space at the shopping center.
BookSmart co-owner Brad Jones said some of those tenants—especially the restaurants—face potentially exorbitant moving costs, if they can find a suitable new location before development starts.
Jones said he is holding his breath until he sees “something in writing” from the city offering voluntary relocation benefits.
“Generally, I’m in favor of redevelopment because the two properties—the Downtown Mall and BookSmart—are underutilized,” said Jones, who would prefer to keep his shop downtown. “But I also think the city has a responsibility to these businesses that have been here in this community for many years helping to support the economy, to do the ethical thing and supply a relocation package that is more than the minimum. And (the city) should try to return the businesses to some place where they can be healthy and thrive, rather than basically be cast aside.”
Morgan Hill Cigar Company Manager Jeff Burrus, a tenant of the Granada Theater/Downtown Mall site, said he would also prefer to remain downtown. The shop’s owners have been looking for new digs, knowing for years that they will eventually be displaced by new development.
“We would appreciate anything the city can do to help us,” Burrus said. “The city has a benefit in keeping us alive.”
