In my previous posting, I shared my generally optimistic assessment of the Downtown Revitalization Update meeting I recently attended. My comments primarily addressed the proposed Downtown Specific Plan. I would like to now discuss code enforcement, the need for a building reuse ordinance, and progress on a Property Based Improvement District (PBID).
Code enforcement and adaptive reuse ordinance
I was pleased to learn at the Downtown Update meeting that the City of Fresno Code Enforcement Department is citing building owners that are not properly maintaining their buildings. For too long building owners, both from Fresno and out-of-town, could purchase buildings and hold them for investment purposes instead of maintaining them. Vacant buildings slow the economic growth of a neighborhood and invite degradation and blight. Even with the increased code enforcement efforts, however, I am disappointed that a comprehensive building reuse ordinance has not been enacted. Let me explain.
Fresno, like many cities, faces a deepening sea of vacant space in downtown. In response to concerns from me in 2006 when I was on the Fresno City Council, City of Fresno staff compiled data on the amount of vacant building space in the downtown area, the area bordered by State highways 99, 180E, and 41. Staff identified 118 vacant buildings, comprising 1,926,364 square feet of unused space. This is approximately the same square footage of the two former World Trade Center Towers. Moreover, approximately 40% of the vacant space, over 775,000 square feet, is housed in blighted buildings. The sheer volume of vacant space - close to eight times the amount of usable space in the Fresno Convention Center, including the Saroyan Theater, Selland Arena, and both Exhibit Halls - is a deterrent to the growth and vitality of downtown Fresno.
Fresno currently relies on public nuisance codes, in particular the Vacant Building Ordinance (VBO), to require developers to secure and improve blighted buildings. This approach, while helpful, is costly, slow and rife with legal obstacles. The VBO stipulates minimum standards of safety and aesthetics. It requires owners to improve vacant buildings in relation to the surrounding area. It also requires that the vacant building be fully secured to deter vandalism and prevent squatters from assuming control of the building. In limited cases, the owner could be directed to provide to the City's Planning and Development Department a plan for making the building ready for occupancy. The ordinance, however, stops short of requiring owners to reoccupy a vacant building.
Though the ordinance is helpful in diminishing blight, it does little for downtown's growth and vitality. The VBO is also an arduous tool to wield. Code Enforcement officers must first notify the owner that the building is not in compliance with the City's ordinance. If the owner fails to comply after the appeal process, the case is transferred to the City Attorney's Office for legal enforcement. This protracted legal process can be lengthy, limiting the City's ability to address other critical issues and diverting monies from other projects. In the end, the City is not guaranteed a reoccupied building since the building can legally remain vacant if it is secure and free from blight.
While the VBO is effective in addressing security issues and severe blight, its use is limited in transforming the sea of vacant buildings into vibrant centers of economic activity. To illustrate, let me briefly describe an instance when it was used in downtown. The City successfully used the VBO on the McMahon Building, formerly located on the corner of Van Ness and Tulare Streets. After a protracted and expensive legal battle, the building was razed. While the ordinance removed the vacant, blighted McMahon Building, it did little to encourage growth in downtown, and the lot that once housed the building is now home only to dirt.
Relying on the Public Nuisance Abatement codes to address the safety and aesthetic concerns of vacant buildings does not work. Downtown growth requires the two-pronged approach of enforcement and an adaptive reuse ordinance incentive to encouraging developers to renovate and reuse vacant buildings. Three cities have implemented different approaches to combat vacant building space and spur growth in depressed areas, typically downtown or industrial areas. Denver, New York City and Los Angeles have all developed adaptive reuse ordinances to provide incentives to property owners to reoccupy their buildings for housing and commercial purposes.
Though Denver was the first to implement an adaptive reuse ordinance, Los Angeles has had the most success. As of 2006, Los Angeles had already reused 3,700 buildings, while 5,400 buildings were finishing the process, and 7,000 buildings had applied to the program but had not yet begun the work. These numbers are much higher today.
The Los Angeles Adaptive Reuse Ordinance provides several substantial incentives for building owners. First, the ordinance relaxes the building codes applicable to the building. This means that buildings in commercial zones could be held accountable only to residential building codes when adapted for reuse. Residential building codes are less strict in their requirements for indoor lighting, parking spaces, proper number of restrooms, etc. Second, the ordinance includes "by-right processing" - the property owner can bypass Planning Commission approval, Council approval, and environmental approval because: 1) the building already exists, 2) the adaptive reuse is only applied to the interior of the building (and minor exterior work), and 3) the ordinance includes a "Master EIR" for the Los Angeles downtown area. The owner only has to obtain the proper permits for the rehabilitation work and is only subjected to inspection fees, not any of the other fees associated with the development process (i.e. Planning Commission and EIR fees).
The Los Angeles adaptive reuse ordinance also exempts the owner from any development fees and restrictions, including typical floor area ratios and open space requirements. Moreover, street fees or infrastructure fees are not levied against the property, even if significant rehabilitation is involved.
In May, 2006 I brought forward and the Council discussed options for working with Planning and Development staff , staff from the Economic Development Department, and staff from the Redevelopment Agency to address the vacant space problem in Downtown. Fresno, however, faces an unique situation when addressing this problem. Unlike Denver, Los Angeles and New York City, Fresno does not benefit from high rent prices in Downtown. Reuse projects in Los Angeles are immediately economically viable because the buildings are tall and rent is high, translating into significant revenue from housing uses (many rooms x high rent), giving developers financial "cover" while the investment for office use, which takes longer to turn a profit, matures. Adaptive reuse is more profitable in Los Angeles, Denver, and New York City because it is cheaper and easier than redevelopment, both of which could combine housing and office elements. Consequently, while staff was asked to look into an adaptive reuse ordinance in Fresno, they were also asked to study what types of incentives will encourage developers to reuse vacant downtown buildings.
Additionally, the type of vacant building is a factor. Staff was asked to evaluate the types of buildings that constitute the 1,926,364 square feet of vacant space in Downtown. Not all buildings present viable options for reuse. Many single-story buildings - particularly, large, single-story industrial warehouses - are not good candidates for adaptive reuse projects because they are not profitable for the developer. Fresno's ordinance needed to provide as many options as possible for projects that pose challenges to reuse. Previous reuse projects in Fresno, especially the JC Penny Building on the Fulton Mall and the Hotel Fresno, provide examples of effective and ineffective, approaches. Staff was asked to examine those case studies for clues to how a comprehensive ordinance will quicken the process.
I requested and the Council directed in September 2006 that City staff develop an adaptive reuse ordinance for Fresno. Staff was asked to consider tailoring the Los Angeles adaptive reuse ordinance, or others, to Fresno or to create an original ordinance specific to Fresno. Staff was further directed to provide incentives that would encourage developers to reuse vacant buildings, especially in downtown. Nothing was brought forward to council.
The need for an adaptive reuse ordinance has been supported by Mayor Swearengin months ago at a public hearing on the future of downtown Fresno. To my knowledge nothing has still been accomplished in developing an adaptive reuse ordinance. While I applaud staff for citing building owners not meeting City of Fresno code requirements, I encourage Mayor Swearengin and staff to prepare an adaptive reuse ordinance for public consideration and, hopefully, council enactment.
Program Property Improvement District (PBID)
I was very pleased to see that progress made on implementing a Downtown Property Based Improvement District. A PBID permits property owners in the area to benefit from improvements by assessing themselves fees. The property owners then determine how they want to spend these fees within the designated improvement area. It is a win-win situation for everyone concerned. It has worked elsewhere and will certainly work in downtown Fresno.
As a City of Fresno council member, I worked beginning in 2003 with Mr. Dan Doyle, president of a local bank, to establish a PBID for downtown. Mr. Doyle had been instrumental in helping to establish a successful PBID for downtown Sacramento many years ago and wanted to establish one in Fresno. He and a number of business leaders visited Sacramento in 2004 to learn more about their downtown PBID. The Fresno group returned enthusiastic about the concept and pressed anyone that would listen to establish one for Fresno's downtown. Unfortunately, local politics got in the way. I brought the concept to the Council on a number of occasions with no action being taken.
The PBID proposal--thanks to the leadership of the mayor, council, staff, the Downtown Association and community leaders--is now in the hands of the downtown property owners for approval. Let's hope that they approve it so that genuine progress can be made in downtown revitalization.
Coming Soon. . .
1. What about an Orchids and Onions Award to recognize the good and not-so-good in Fresno? 2. An update on your local community college. 3. Stories from the home front: Scheduled and Unscheduled Public Communications at City Council meetings.
Comments are welcome. Click on "Comments" below or e-mail me at abriancalhoun@gmail.com.
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