The City Council has designs on the Morgan Hill Plaza, but not
enough money to do what it really wants to do, which is to
redevelop the entire thing.
The City Council has designs on the Morgan Hill Plaza, but not enough money to do what it really wants to do, which is to redevelop the entire thing.
In a two-hour workshop Wednesday night, council brainstormed on how to encourage enough changes to improve the dingy, poorly laid out strip mall located at West Dunne Avenue and Monterey Road. The council envisions a more appealing “front door” to Morgan Hill’s notably improving downtown.
Council has not given up hope for a kind of mixed use project with a library or city hall occupying the site with retail and/or housing in back. Or a shiny center with lots of attractive, revenue producing stores and shops. It has given up on trying to do a facelift.
The center, now anchored by Albertson’s grocery store, is a problem for the city in two ways: Its dreary appearance and its rapidly deteriorating retail base, which translates into fewer sales tax dollars for the city treasury.
Consultant Denise Conley took the council through the study she had done last summer on the Plaza’s problems, potentials and players.
“The problems were a little worse than we thought when we began.” It’s a bad layout with poor visibility,” she said. Anchor stores are leaving; the vacancies limit patronage and sales. The gas station on the corner and an apartment house both block the view from the streets, lowering the chance that drivers will spot an interesting shop and stop.
Conley reeled off a string of difficulties, led by seven individual owners, most of whom are not interested in selling or taking city money to improve their business. Rents, Conley said, hover below $1 a square-foot per month – very low and reflect shops of limited appeal to the general buying public, though there are exceptions.
“There has been a great deal of turnover since we started the study,” Conley said. More cars pass through the Monterey/Dunne intersection than any other non-freeway crossing, a site normally expected to attract business, she said.
Mayor Dennis Kennedy asked if the situation will get worse before it gets better.
“It will get worse, period,” Conley replied. “The next step would be a 99-cent store or a discount store or a 24-Hour Fitness.” None is much of a revenue producer, nor would they help boost business for the Fat Cat Pub, Skooters Ice Cream, Data Star Communications or The Water Outlet.
Instead of 99-cent stores that serve nearby residents with low incomes, the council has repeatedly heard that other members of the public want higher-end groceries or Trader Joe’s on the site.
“This is right for the Morgan Hill market,” Conley said she was told by an owner. “This is not an upscale market, it’s a downscale market,” she was told. The council was not so sure.
Seven property owners control Albertson’s, with its month-to-month lease – while it looks for a site closer to the freeway; the former Rite Aid store – leased from an owner in Southern California; the gas station, the apartment building, the small shop sites and the liquor store.
“Two owners said ‘Just buy me out,’” Conley said. “Another said ‘I never sell, just move me.’ Another who said ‘Don’t bother me’ now says maybe he’s interested.” The others are adamantly staying where they are. Because of this the city might need to use its powers of eminent domain to take over and improve the center.
“You would have to use some sort of eminent domain process to acquire whole site,” Conley said. Councilman Greg Sellers pointed out that Morgan Hill has never used the process in “an aggressive way.”
While the city possesses such powers, the RDA does not.
What the council indicated it wants to do, and might be able to afford, is to step in and take possession of key parts of the center, using them as a catalyst for the rest of the center. It could buy the gas station and move the apartment building off site – both owners are amenable – then develop the site or resell it.
All council members essentially agreed with this strategy though Council members Steve Tate and Hedy Chang questioned where the funds would come from.
Money is the problem. While the economic development line in the RDA budget shows $15 million reserved for the purpose, actually only $3.8 million remains that could help with the Plaza. The city paid $7 million to buy land for a county courthouse, reserved $1 million for downtown planning and development, plus a few other million dollar details.
“The center today isn’t a high priority,” said Councilman Larry Carr. “What’s a high priority is the center tomorrow. We must plan ahead before it becomes abandoned; map it out now instead of watching it continue to spiral down.
Council was concerned that the center complement downtown. Dan Craig, Morgan Hill Downtown Association executive director asked the council to take care not to encourage stores that would compete with the downtown on which the city has spent considerable time, thought and money.
Kennedy summed up the evening’s progress.
“Mixed use is number one; two is a new retail shopping center and three is a greatly revamped and upgraded existing facility without gas station and apartment in front,” Kennedy said.
Everyone perked up when Conley told of the small city of San Fernando that turned around a similar center by placing its library in the center. Library patrons patronized ice cream stores, parents stopped for coffee and related retail burgeoned. The council will be taking a look at potential library sites.
Sellers and Chang also looked at using the site for a public facility, as did Carr.
“The first decision is to figure out the public facilities component,” Sellers said. “A library is a possibility. At the same time look at the properties on the corner and at the anchor tenant.” If the city wants to occupy the anchor tenant or give incentives to a developer, we would have something to show in the short term – but also develop a long term approach.”
The cost of buying the gas station and the apartment was estimated to cost between $1.5 and $3.5 million.
“It could be a first step,” Sellers said. Conley offered some hope.
“Just because it’s impossible doesn’t mean it isn’t really important,” Conley said. “My job is tilting at windmills.”
