The city of Morgan Hill is getting closer to developing the former Simple Beverages site in the downtown, as local businesses are working together to devise a temporary recreational use for the property in the meantime.
Two developers met the city’s March 20 deadline to submit proposals for the .63-acre property at the corner of Monterey Road and Third Street, according to Assistant City Manager Leslie Little. The two developers— Environmental Planning and Development Company (partnering with Imwalle Properties) and Weston Miles Architects (partnering with Leal Vineyards)—have already qualified through a previous selection process to build on former Redevelopment Agency “opportunity sites” in accordance with the city’s plans.
Charles Weston of Weston Miles Architects, which is located downtown, said his company and Leal Vineyards have proposed building a four-story structure with a restaurant on the ground floor with “lots of outdoor seating.” Upper floors would consist of a 36-room hotel and spa, and banquet facilities.
The Morgan Hill Downtown Specific Plan, established before the RDA purchased the liquor store and a number of other properties in 2008 and 2009, call for “construction of a high quality project utilizing a long-term ground lease or any other acceptable financing/business structure,” according to a city staff report.
The city hopes to forge a “public/private partnership” with the winning developer to build and maintain a mixed-use project with retail or dining on the ground floor, perhaps with residential and office use upstairs.
The city intends to remain the owner of the property, once it completes a purchase of the site that currently houses a vacant building and parking lots. In February, the city council voted to purchase the property at a cost of $525,000, to be funded by a loan from city housing funds. City officials plan to repay the housing funds with revenues from whatever ends up being built on the liquor store site, including lease payments and event revenues.
The city’s purchase price for the liquor store site was determined by a bid from another qualified developer—Lone Star Development—that was submitted earlier this year. That developer only wanted to hold onto the property until the market improved. But city officials see the property as being too crucial to the overall improvement of the downtown to let it sit there for an undetermined number of years.
Lone Star’s purchase bid was thus rejected by the council, and the developer did not submit a proposal to build on the site and enter into a partnership with the city.
‘Pop-up’ recreation
The liquor store property won’t remain just a “dreary” parking lot and empty building until it is developed if downtown businesses have their way, according to Morgan Hill Downtown Association Manager Raquel Crowell.
The city and MHDA plan to build a temporary “pop-up” park on the site, incorporating public art projects funded by the city’s “mini-grant” program and other recreation elements, Crowell said.
Amenities proposed for this project include a bicycle “fix-it” station, a vintage map of California bicycle routes, fitness stations, benches made out of recycled propane tanks, a hydration station, shade structures and artificial grass.
“The goal is to create a more pedestrian friendly downtown,” Crowell said. “One thing we’ve been hearing is people would like to see more events geared toward families in the downtown. Families could come down on their bikes and make a pit stop” at the pop-up park.
A specific timeline for construction of the park is not yet established, but planners will continue working on the details in the coming weeks, Crowell said.
The liquor store property—along with other downtown sites and assets owned by the RDA before the state closed the agency in 2012—is currently held in a trust controlled by local public agencies and the state.
The purchase remains in the process of post-RDA approvals that must ultimately pass the muster of the state Department of Finance, Little said.
City staff is currently studying the proposals from EPD/Imwalle and Weston Miles/Leal, Little said. They hope to present a recommended proposal to the council for approval in May.
The city is also still in the process of working out deals with two developers interested in improving two other downtown properties crucial to the city’s long-term revitalization plans, Little said. One of these is with City Ventures to build 50-plus condominiums and up to 40,000 square feet of new retail space on the Downtown Mall/Granada Theater property. The other is a sale of the Royal Clothier/Tryst site at Second Street and Monterey Road to Lone Star, who plans to make “modest” improvements to the commercial space.
The city is also negotiating with City Ventures on a more complicated transaction of the BookSmart Shopping Center property, located on Depot Street between Second and Third streets, Little added. City Ventures has proposed purchasing that property and building 24 townhomes with ground-floor retail facing Depot and Third streets.
These three concepts were also approved by the council in February. The parties were given 60 days to negotiate deals with the city, which could include subsidies to City Ventures for their likely requirement to pay “prevailing wages” on the Downtown Mall project.
