A San Jose company will develop two downtown Morgan Hill
properties with new multi-level buildings containing at least one
movie theater, retail shops, residences and more parking.
A San Jose company will develop two downtown Morgan Hill properties with new multi-level buildings containing at least one movie theater, retail shops, residences and more parking.
The Morgan Hill city council voted 4-0 Wednesday night to select Barry Swenson Builder as the Redevelopment Agency’s business partner to revitalize the two blocks on Monterey Street. Councilman Greg Sellers was absent.
The projects, which will contain up to 70 new housing units according to the company’s initial plans, will not be fully built for at least another 30 months. Groundbreaking on both sites could occur within the next 12 months, according to Jeff Current of Barry Swenson Builder, who gave a brief presentation at the meeting.
First, the city and builder will enter into an “exclusive negotiating agreement” in the next 60 days, establishing Barry Swenson Builder as the buyer and developer of the properties, which are currently owned by the city.
The properties are on the east side of Monterey Street, between First and Second streets. One currently houses the Downtown Mall and the now-vacant Granada Theater. The other houses Royal Clothiers, and both parcels have parking lots behind the structures.
Although the council previously approved a rough outline of preferred plans for the properties in its Downtown Specific Plan, the details of the upcoming projects will be determined in the coming months, according to David Heindel, assistant to the city manager.
“This is just the beginning of a long process,” Heindel said.
After an ENA is in place, the builder will proceed on project specifications, designs and alternate plans related to housing density, parking and other factors. After that, the RDA and the builder will sign another, more binding agreement, in which Barry Swenson Builder will purchase the property, promising to build what the city wants. Heindel said community input will continue to be sought in identifying the details.
The company is “thrilled” to be awarded the business partnership with the city, said Jessie Thielen, the company’s senior development manager.
“Many of us live in the area and we’re very excited to live, play and work in our own back yard,” Thielen said. “We think the two sites are absolute gems, and we have a lot of great ideas to bring to the sites.”
Initial plans presented by Barry Swenson Builder center around an upscale grocery store on the corner of First and Monterey streets. The store would be less than 20,000 square feet.
Also on that block would be a smaller building containing more retail space. Upstairs from both retail spots would be up to 60 housing units of varying types – including one- and two-bedroom apartments, studios and condominiums.
The company also plans to build a cinema at Monterey and Second streets, in accordance with a council decision to proceed with that plan more than a year ago. That block would also contain up to 10 residences.
Parking will be built with each development.
Councilman Larry Carr said he hopes the final plans will “create a sense of place” downtown, where people from all over South County want to spend time, as they did last Saturday at the grand opening celebration of the Third Street Promenade – also an RDA-financed project.
Wednesday’s decision came down to a choice between Barry Swenson Builder and City Ventures, based in Santa Ana. The city submitted a request for developers for the properties in September 2009, and a total of 17 companies responded with applications.
City staff, a financial consultant, and a committee of citizens evaluated all of the developers’ qualifications.
Council members said Wednesday that the choice between the remaining two companies was difficult, as both were amply qualified and financed. Both have completed a number of redevelopment projects similar to the Morgan Hill plan.
The council chose Barry Swenson Builder because it is more local, with offices in San Jose and Santa Cruz, and with a number of both large and small mixed-use projects in the area already under its belt.
But Councilwoman Marby Lee also asked that the council discuss, at a future meeting, a possible revision of its current plans for the Granada Theater property. She said her request was in response to what seems to be growing community support for renovating the theater and opening it as a live entertainment venue.
“I think we’ve heard from enough of the community that there’s an interest there,” Lee said following the meeting. She said she has received scores of e-mails asking the city to reopen the Granada.
But Mayor Steve Tate said saving the Granada is inconsistent with previous council decisions which prioritize a Second Street cinema, and changing that priority would delay the redevelopment process.
The Save the Granada foundation, a nonprofit group devoted to the reopening of the facility, submitted a business plan to the council. But council members determined that plan was not financially self-sustaining, as the foundation did not have enough money to take the property off the city’s hands.
Now, the foundation will work with the future owner to keep the theater open, according to STG co-founder Stephen Beard. They will also try to convince the council to produce an alternative plan that would keep the Granada open.
“When you look at the Third Street Promenade and the initial plans (for example), that’s not what was built. There’s always slight modifications to any plan,” Beard said.
The property can accommodate a refurbished Granada Theater, grocery store anchor and parking, according to Thielen. Plus, Barry Swenson Builder is able to implement a plan that saves the Granada, if that’s what the city wants.
“If there is an economically viable plan (to run the Granada), we are all for figuring out how to make something work,” Thielen said.
Downtown redevelopment timeline
- Wednesday, April 21: City council selects Barry Swenson Builder as business partner for downtown properties.
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By June 22, 2010:* City and Barry Swenson draft and sign “exclusive negotiating agreement,” tying up the properties until specific plans are drawn.
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By Sept. 2010:* City and builder enter into binding contractual agreement, in which city agrees to sell the property, and the developer agrees to build what the city wants.
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Early- to mid-2011:* Construction begins on mixed-use developments, combining ground-floor retail stores, upstairs residences, and a multi-screen cinema.
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Mid- to late-2012:* Completion of construction.
*estimated
