Update: The Morgan Hill City Council Wednesday gave staff the go-ahead to continue working with developer Rocke Garcia to bring a four-story parking garage to his downtown property.
City staff will spend the next few months working out the terms for a “memorandum of understanding” with Garcia that would establish, among other things, that the City will purchase a 32,000-square-foot portion of his two-acre site known as the “Sunsweet” property in order to build the 275-stall parking garage.
After purchasing the property, the City would ideally proceed with the facility’s design and construction by seeking requests for proposals from contractors, according to City staff.
City Engineer Karl Bjarke said this process will attempt to obtain “the best value for the City,” which does not necessarily mean the least costly proposal.
Garcia, a longtime Morgan Hill developer, has already thought through the conceptual architectural design of both the parking facility and a 48-unit condominium and commercial project he wants to build on the same property. Garcia and a design team he has hired presented drawings to the Council Wednesday, depicting the potential layout and construction features of the future dual project.
The mixed-use project would be built next-door to the parking facility on the east side of the Sunsweet property, which is located on Depot Street between Third and Fourth streets. Garcia said he could build the mixed-use project shortly after the parking garage is completed.
City staff said if everything proceeds smoothly, the Council could approve a memorandum of understanding with Garcia by Jan. 15, 2014. Environmental clearance could be approved by April 2014, and construction on the parking facility could start by September 2014. Construction would likely last about 12 months, with the garage opening by October 2015.
The City’s proposed budget for the parking garage is about $10.1 million, which can be funded by Redevelopment bond proceeds left over from 2008, according to City staff.
The City has two backup sites in mind for a multi-story parking garage, which has long been part of City planning documents for the long-term future of downtown Morgan Hill. While the Sunsweet property is the Council’s first choice, staff have also considered building the parking facility on the BookSmart shopping center’s property on Depot Street between Second and Third streets, and on the City-owned Depot Street parking lots adjacent to the railroad tracks.
While the City also wants to build retail space on the ground floor of the parking garage – particularly on any Third Street frontage the facility touches – Garcia said Wednesday he would oppose such a proposal. Such ground-floor uses would compete with his retail proposal for the next-door mixed-use project he is planning. Garcia has also proposed including retail use on his Third Street frontage.
Council members and members of the public, including downtown business owners, touted the Sunsweet site for a large-scale parking facility for its proximity to Monterey Road and its potential to add some life to downtown Morgan Hill. Vice Mayor Gordon Siebert said the facility could “activate the rest of downtown.”
The City’s effort to build a $10.1-million parking structure in downtown Morgan Hill is loaded with alternatives, possibilities and moving parts, according to a new update from City staff. But the clock is ticking as officials want to get started as soon as the state approves City Hall’s long range plan to revitalize several downtown properties.
The City has two goals that relate to two key properties often described as lynchpins in the effort to spruce up the downtown area. One is to build a multi-level parking structure that could accommodate nearly 300 parking stalls. Another goal is to eventually redevelop the BookSmart shopping center on Depot Street, according to City staff.
The City Council’s first choice of sites for a parking garage is the “Sunsweet” property across Third Street from the BookSmart center. But the City might try to maintain a stake in the BookSmart site, for which the Redevelopment Agency purchased a $1.7 million option in 2010 in order to preserve the Council’s desire to ensure the eight commercial tenants on the property gain the maximum relocation benefits, which a City staff report published last week estimates will cost about $750,000.
One possibility for the BookSmart site is a “boutique hotel or grocery store,” wholly unrelated to a parking structure, according to City staff. One scenario to accomplish that is for the City to enlist a private developer.
Still, the BookSmart property remains one of three possible sites for a multi-story parking garage slated for construction by the end of 2014, according to City staff.
The relocation figure, along with a maze of backup plans and sub-plans, was provided last week from City staff in an update on the possible demolition of the popular shopping and restaurant center and the development of a 275-stall parking structure on the undeveloped Sunsweet property which is owned by Morgan Hill developer Rocke Garcia.
The parking proposal generated controversy this summer when the City initially proposed the parking structure on the BookSmart property, shortly after Council learned it has a limited time to spend up to $25 million in 2008 Redevelopment Agency bond proceeds.
Tenants of the BookSmart property were concerned about the hasty track of the proposal and the unlikelihood they would be able to remain downtown after their relocation.
But since Council indicated it prefers to build the parking garage on developer Rocke Garcia’s Sunsweet property, the eight tenants have more time to move. Other Morgan Hill businesses are also encouraged by the proposal, which they say would brighten up the downtown with more shopping, entertainment and business options.
Brad Jones, co-owner of the BookSmart store and President of the Morgan Hill Downtown Association, said he is glad the Sunsweet property is being given “serious consideration” for redevelopment. The property currently contains old warehouses and an office for Garcia’s company GlenRock Development. Its Third Street frontage is hidden by a hand-painted mural depicting Morgan Hill life and history.
“This is our opportunity to develop a two-acre black hole that’s been unused in the middle of our downtown for the last 30 years,” Jones said.
The BookSmart property is owned by Llagas Valley Investments, which is owned by Gary Walton and Gene Woerner.
While the City prefers to build the structure on the Sunsweet site, it still wants to be involved in the future redevelopment of the BookSmart site, partly because the City is required, and wants to offer the shopping center’s tenants better relocation assistance than they would get if the property is turned over entirely to private developers, according to City staff.
If the parking structure goes on the Sunsweet site, the City would have to consider selling the option on the BookSmart property, or allow the option to expire, City staff said. The option contract is set to expire in April 2016. If it expires, the City would no longer have the right to purchase the site for the contracted amount of $3.7 million ($1.7 million of which has already been paid toward the option).
On the Sunsweet property, City staff proposed a conceptual four-level parking structure with the lowest level about 4 to 7 feet below grade. The project could include retail space on the property’s Third Street frontage, to complement an additional housing and commercial project that Garcia plans to also build on the site next to the future garage.
The parking structure would occupy the western portion of the Sunsweet property, with automobile entrances and exits on Fourth Street, according to City staff. The project would also preserve an old “heritage oak” tree, behind Huntington Station restaurant.
To develop the parking garage on the Sunsweet property, the City would likely purchase the land, and then issue a request for construction proposals from developers, City staff said.
Garcia’s preferred contractor for the parking garage is San Francisco-based Build Group, but the City will have to reach out to the construction community as a whole to seek proposals.
The western portion of Garcia’s property is ideal for a parking garage to serve visitors because of its proximity to Monterey Road, Garcia said. Garcia also plans to build a mixed-use commercial, residential and office project on the eastern portion of the property, closer to Depot Street. The residential aspect of that project, which would follow “close behind” the parking structure, would include up to 48 condominiums.
“On the corner (of Depot and Third streets) we still hope, some day, we can get a restaurant on that location,” Garcia said, adding, “the (contractors) on board are pretty well known in the industry.”
The City’s current budget for a parking structure – regardless of which site the project ends up on – is about $10.1 million and will be funded by a portion of Redevelopment bond proceeds left over from 2008, according to City staff.
Staff estimate the project will cost about $30,000 per parking spot, which would allow for more spaces on the City’s last choice for a site: The existing public parking lots on Depot Street, according to City staff. Costs would be lower on that property primarily due to the fact the City already owns the lot.
As for the City’s second choice – the BookSmart property – the RDA already purchased the option in 2010, and if the City wants to gain control of the property and develop it with any project it would have to shell out another $2 million or work with a private developer.
Chamber of Commerce Executive Director John Horner said the Chamber members and directors he has contacted are on board with the Sunsweet parking project.
“There are many concerns about the (BookSmart) site at Depot Center, the biggest one being (quickly) displacing the existing businesses,” Horner said. “We’d like to see this be the spark that gets that whole (Sunsweet) property redeveloped, and turn one of our downtown eyesores into a resource.”
The City has long wanted to build a parking structure downtown to accommodate existing and future visitors, as well as VTA and Caltrain commuters who are now likely to park on the Butterfield Boulevard lot on the east side of the railroad tracks from the Depot Street train station.
The future development of the BookSmart site, the VTA lot on Butterfield Boulevard, and five other sites in downtown Morgan Hill are the subject of the City’s Long Range Property Management Plan to revitalize the properties formerly owned by the Redevelopment Agency, which was closed by the state in 2012.
The state Department of Finance is currently in the process of reviewing the LRPMP for final approval.
-Slated for construction by the end of 2014, with a proposed budget of $10.1 million to be funded by Redevelopment bond proceeds left over from 2008.
-Project would add four levels of parking, with at least 275 stalls downtown.
Three proposed locations, in order of the City’s preference:
– Western portion of the “Sunsweet” property, located on Depot Street between Third and Fourth streets.
– The BookSmart shopping center on Depot Street, between Second and Third streets.
– Existing City-owned parking lots on Depot Street, adjacent to the railroad tracks and the Caltrain station.
