The City of Morgan Hill will purchase a portion of the Fourth Street Sunsweet property for about $2.1 million in order to build a massive parking and retail structure.
The five-member City Council voted unanimously to approve the purchase at the June 4 meeting. The property, which is about .8-acre, stretches between Third and Fourth streets on the east side of Monterey Road, behind Huntington Station and Trail Dust restaurants.
Negotiations over the purchase have been ongoing for several months, as the city last year identified the site as the preferred location for a multi-level, 275-space parking garage to accommodate visitors, commuters and the city’s overall downtown improvement plan.
The city paid the recently appraised value for the property, according to Assistant City Manager Leslie Little.
The city project—the total cost of which is estimated at more than $10 million—will also include up to 4,000 square feet of retail space facing Third Street, Little said. The city will purchase the property from developer Rocke Garcia, co-owner of Glenrock Development.
Vehicle access to the parking garage will be on Fourth Street, Little added.
The garage site will also use an adjacent, smaller property on Fourth Street formerly owned by the Redevelopment Agency, which closed in 2011. That property is now controlled by a public trust, and its use for the parking/retail project is subject to an agreement with other local taxing entities who share in the proceeds of the former RDA.
Funding for the parking and retail project, including the property purchase approved Wednesday, will come from RDA bond proceeds left over from 2008.
Garcia told the council the purchase agreement is “a defining moment for downtown.” The city, and previously the RDA, have spent several years planning and trying to enact a plan to improve the entirety of downtown Morgan Hill.
“This will not only provide much needed parking downtown, but it will also provide an impetus for the development of the balance of the Sunsweet property,” Garcia said.
Garcia plans to build a mixed-use residential and retail structure on the remaining portion of his property between Third and Fourth streets, extending from the parking site to Depot Street.
He has not yet submitted plans to the city for that project, but he told the council that step is approaching quickly.
The agreement also says Garcia will reimburse the city for the portion of related improvements to Fourth Street that will benefit the developer’s project in the future.
Repairs to Fourth Street, which Little said is sorely in need of repair, will include road reconstruction, utility undergrounding, street lights and new sidewalks, curbs and gutters. The projected cost is $1.7 million, to be funded from the city’s street maintenance fund.
These repairs will be done concurrently with the parking structure project. City staff hope construction can begin before the end of this year.
The parking structure project is the most expensive item on a list of upcoming projects in the downtown to be funded by $25 million in leftover bond proceeds over the next couple of years. Other expenses include Monterey Road and side street makeovers, assistance to private developers and relocating the Caltrain platform adjacent to Depot Street on the west side of the railroad tracks.
The parking site property purchase requires further approval from local and state authorities involved in the RDA dissolution process, according to city staff.
