Sunday, March 24, 2013

John Hammond's thoughts on Bridge Housing Proposal for Marinwood Village

Editor's Note: John Hammond is long time Marinwood resident who has been an active community volunteer that has helped create the Marinwood we love today.  He first published this memo on the Marinwood Nextdoor website.  Although we differ in the analysis, we especially appreciate him articulating his support.  We publish this memo with his permission so that it may reach a larger audience. 

 

 

My thoughts on the Bridge Housing proposal at Marinwood Plaza

by John Hammond


This posting contains my thoughts on the BRIDGE Housing’s plans to redevelop the Marinwood Shopping Center. This does not address the wisdom or lack of wisdom of the other affordable housing proposals for the Marinwood/Lucas Valley area. The discussion of those other projects is a complex subject that will be debated for many years before being resolved. The shopping center project has been in development for over eight years and is entering the approvals process. Unlike the other proposals the shopping center may be realized in the near future. Discussion of this project needs to stand on its own and not be swept into the larger debate involving other proposals.

I will begin with the objectives Marinwood residents have expressed for the property over the past 10 or so years. Following this list I’ll discuss the current plan and the history leading up to it, and I’ll end with the objections I’ve heard expressed about the plans and my thoughts about those objections.

Residents’ Wishes for the Property




So let’s first discuss our community’s objectives. When the effort to redevelop the shopping center began 8 or 10 years ago this community was unanimous in that we wanted the dead shopping center cleaned up and our local community serving retail stores to return. The property is and has been an eye sore for many years. What all of us have wanted is to replace the mess with local shopping and at the top of the list has been a good market which we now have as the first phase of the redevelopment.
 
Some years ago I prepared a community survey that was delivered door to door asking for opinions about what stores and services should go into the shopping center. We got back 350 replies and tallied the results which were made available at subsequent community meetings. Here’s what Marinwood residents said they wanted:

A good Market- which we now have
Restaurant – family serving, indoor/outdoor dining, with a bar (2000 sq ft)
Bakery/Coffee shop (1200 sq ft)
Beauty/Barber shop (600 sq ft)
UPS/Mail box/Copy Center (700 sq ft)
Bank/ATM (500 sq ft)
Liquor store (Alex & Gennie) (800 sq ft)
Laundry/Dry Cleaner – drop off & pick up only (500 sq ft)
Deli – now part of the market
Bike Shop (1000 sq ft)
Florist (300 sq ft)
Women’s Upscale Apparel (500 sq ft)
Computer Sales/Service/Repair (500 sq ft)
Professional and/or Medical/Dental Offices

Next to each of these I’ve included our estimate of the amount of space each business would require. A little arithmetic shows that the 7,800 sq ft of retail space currently proposed will get us what we have said we want. I think we would all be very happy with less than this full list.

As an aside, one of the primary problems with the existing center has been that the spaces are all 2,000 sq ft. This is much more space than most small retail store owners want or need. Having to pay rent on more space than is needed is one way to drive away a business owner.

My primary focus through all this work has been to bring most of the above list of stores and services to our community in an attractive package that we will all love using and which will become a social center for Marinwood where we may stop by for coffee, chat with friends, have dinner, hang out, watch sports, etc. The current proposal will make this happen very nicely. It will be everything any of us have hoped for.
So What’s The Problem?

What is the price to us to have this part of our community cleaned up and changed into a major community asset? I have learned through all the years of working on this project that there are a number of constituencies that must be made happy before we will get what we want. There are the environmental groups, affordable housing advocates, the schools, the board of supervisors, the state of California government, the property owner, the contractor, the people who will finance the development, etc. These are all very strong outspoken groups with plenty of political muscle. Nothing happens around this county until all the vested interests get their share of a compromise. Our community is just one of the entities with an interest in what happens. So in choosing our reaction to what is proposed, the need to satisfy other interests must be considered if we are go get what we want. Demanding what we want and refusing to budge on any other groups’ interests could be successful in delaying the project or stopping it entirely, but it will not result in our getting what we want.

Prior Development Efforts

Another aspect of this project is the interests of the property owner. Jerry Hoytt has had one view of what his property is worth. Potential property buyers viewed the value somewhat differently. There have been many developers who have taken a look at redeveloping the shopping center. Most of them backed away before investing more than a token amount of time considering it. Even prior to the real estate bust, projects just did not pencil out based on how much Gerry wanted for the property, construction costs, etc. BRIDGE Housing was actually the first to seriously consider development. They have the tax advantages accorded affordable housing projects and perhaps some government money that made development potentially feasible. They were approached because the county has a need to satisfy the state’s demands that affordable housing be built. Whether you like it or not, whether it makes sense or not, the state mandates that cities, towns and counties plan for growth and for all levels of housing, including market rate and affordable. We are not going to be able to change that anytime soon. If we are to have our shopping center project done during our lifetimes we have to accept that the project will include affordable housing. The alternative is to yell and scream and delay anything happening for many years.

BRIDGE Housing Backed Out

In 2005 BRIDGE Housing was unable to put together a plan that made sense, and they backed out. Subsequently there were two more developers that put serious effort into trying to put a deal together. The first was Tom Monahan of Monahan Pacific. Tom is a local guy who lives in our valley. His motivation was that his wife wanted the center redeveloped so she could shop there. Tom’s group made several positive steps forward in plan design, but he too eventually backed away. Peter Brandon of Trammel Crow was next at bat. He also lives in the valley. He was making some progress when the real estate market fell apart. As the recession arrived there was no possibility of making something work. As a result of the bad economy Trammell Crow even shut down their San Francisco office and left the Bay Area. With each developer, the plan became more refined and the community provided input through small and large community meetings, which further guided us to where we are today.

The Recession is Ending, but Problems Persist

So now we are climbing out of the recession, but the arithmetic still looks weak. Having put together several feasibility spreadsheets for the project over the years I’m pretty sure that a completed redevelopment built now would be worth less that the cost to build it. That leaves zero motivation for a for profit developer to step in. Now BRIDGE Housing has come back into the picture, and there has been a change. Hoytt Enterprises is going to retain ownership of the Market building and related parking. This is important. Grocery Stores pay very little rent. They serve as the anchor for a center, but pay rent less than half of what other tenants pay. Removing the market building and its parking from what the developer has to buy makes the project more attractive. It also serves to divide the property making it almost impossible to develop the property in any other way than what is proposed.

BRIDGE Housing’s Advantages

In addition the county continues to be under pressure to build affordable housing, and because they retain ownership of the projects they build BRIDGE is in a unique position that makes going forward a possibility. They also have the money to finance the construction. This means they can take advantage of today’s relatively low construction costs that are the result of people in the trades needing work. Combined with whatever government money they may get and the tax relief they will enjoy they can afford to build what we want and construct the affordable housing that other constituencies want to see built. So the arithmetic can work for them now, but the math still will not work for constructing market rate housing.

So BRIDGE is pretty much the only game left. If they walk away, there will not be anyone else stepping in to redevelop the property for a very long time, and we will be left with nighttime drug dealing, vandalism and perhaps another failed grocery store.

So how bad would it be to have BRIDGE Housing build their affordable housing?

I’ve heard three categories of objections: 1) the project will look bad, 2) The people living in affordable housing will be bad for our community and 3) the tax breaks given affordable housing projects will create a burden for existing residents and the schools. Let me give you my thoughts on each of these.

The Projects Appearance

The current design plan for the retail portion of the project at the north end has evolved over the past seven years. When BRIDGE Housing came back to the project they reviewed all the work that had been done before by various committees, Tom Monahan’s group and Trammell Crow and refined the design even further. Please spend some time studying the rendering that the BRIDGE people have been showing of the intersection of Marinwood Avenue and Miller Creek Road. You can find it at marinwoodvillage.com. It’s very attractive. Imagine stopping at the bakery for coffee, getting a haircut, shopping at the farmers market, watching a game in the restaurant bar with friends. What we have now in the current design works really well. It will be the most attractive small shopping center anywhere in the North Bay. It will be a place that is enjoyable to visit. Marinwood residents will want to hang out there. It will be better than what we could have hoped for. Rather than the garbage dump it is now, the redevelopment will turn a pig’s ear into a silk purse. We will have a delightful entrance into our community from the freeway that we can all be proud of.

The center of the project will be the market. We already know what it looks like. It’s fine.

The south end of the project will be the housing. We don’t yet know what that will look like. There are some proposed designs that look attractive, but I don’t believe the final appearance has been locked in place. That’s a detail that will be worked out during the public meetings and approvals process. The appearance of the residential portion is all dependent upon the “skin” put on the buildings. There are lots of options, and choosing one or the other is not a big cost factor one way or the other. But regardless once built few of us will be paying much attention to the residential portion of the project. Our attention will be on the north end where the retail will be located and where we will be spending our time, and that part will look great as well as providing us with the retail services we want and the shopping critical mass necessary to keep the market financially successful well into the future.

Who will be the Affordable Housing Tenants?

So what about the people living in affordable housing? How undesirable will they be as neighbors? There are several ways to approach weighing this issue. First is to visit other BRIDGE Housing projects. The closest one is Rotary Village – the 80 +/- unit retirement home project that BRIDGE Housing build in conjunction with the Terra Linda Rotary Club many years ago. You probably know where it is on the country farm property. Walk up there and take a look around. You’ll probably agree that it is a very nice place and very well maintained. But to see more of what BRIDGE has built check out their website – bridgehousing.com. You’ll find lots of addresses of projects around Marin and the Bay Area that you may visit. BRIDGE people have expressed a willingness to arrange tours of their properties. You will find them all well kept with no evidence of anything negative. They are nice places.

Another perspective on the quality of tenants is to review the process that BRIDGE uses to select their residents and manage their properties. First, their properties all have live-in on site managers. All the residential units in the shopping center project will be rental units. Prospective tenants must pass criminal and credit checks, in home visits and agree to follow the rules. Tenants who fail to follow the rules are evicted. This point probably needs more development than I’ll cover here, but understand that the concerns Marinwood residents are expressing are no different than those that have been expressed in other communities before BRIDGE projects have been approved. BRIDGE has been successful because they have earned an excellent reputation, and a good portion of that good reputation is due to their exacting standards and first class property management. Their website and the marinwoodvillage.com website have much more information on this subject. Check them out.

You often hear said that we need affordable housing for our police officers and fire fighters. I think that is a bunch of malarkey. Police and firemen earn more than average incomes and will not qualify for affordable housing. The primary classes of residents will be seniors and people working in service jobs. Think of the cashiers at the market, the hair dressers, store employees, many self employed people just getting started, single moms with children, in home support service workers who take care of our seniors and disabled in their homes , childcare providers and single teachers at the lower end of the pay scale. Bridge has a list of occupations held by people living in their residences. I’m anticipating many of the tenants will be seniors now living in Marinwood who are house rich, but income poor. They may well qualify to live in affordable housing and once relieved of the cost of maintaining their home will gain some measure of economic freedom. These aren’t strangers coming in from afar with their strange ways. These are people who are already here living among us. How horrible will it be to have them occupy apartments on Marinwood Avenue?

My last point about the prospective tenants is to recommend checking out the income requirements and the rents that will be charged. Bums and no-good-nicks do not earn the incomes required to live in these units. We’re not talking about destitute people. We are talking about people who have incomes in the lower half of people already living here. A family of four with a breadwinner earning $65,000 a year would qualify. Again, there is more information about this at marinwoodvillage.com.

What About Taxes? How Much Will the Affordable Housing Property Tax Exemption Cost Us?

Let’s move on to the tax issues and the consequences to the schools and other public services and our own tax bills. I think there are some legitimate concerns here. The tax advantages granted affordable housing developments definitely will result in less tax revenues than would be provided by a market rate development. So let’s take a measure of how costly the tax changes would be for us. First let’s look at revenues. If you go to the Marinwoodvillage.com website and look under FAQ’s, item number 16 discusses the tax situation. In the last paragraph there is an orange colored hypertext word “here”. Checking on that word will bring up a spreadsheet showing the anticipated tax revenues from the development. The total is $199,000 a year. Only about $10,000 of this will go directly to the schools. $100,000 will come from sales taxes, and we do not know how the county will spend that money. The balance will go to special districts like fire, paramedics and sanitary. This spreadsheet calculation does not include the sales tax revenues that come from the new market. Some of what is sold in the market is subject to sales taxes, and the current tax generated is about $6,000 a month. Although the market already exists it is part of the whole redevelopment, and those tax revenues should be included in our thinking about the entire plan especially since there is a question of whether the market can survive if the additional retail stores do not arrive within a reasonable amount of time. The additional stores will add the critical mass required for a successful shopping center, and without those stores the market will have a difficult time. Jeanne and her family moved their market to Marinwood with the understanding that the north portion of the property would be developed with additional retail. They’ve made a big investment in our community. Now it’s our turn to bring in the rest of the retail stores to make the shopping center work.

So if we count all the annual tax revenues likely to come from the finished redevelopment the total is estimated to be somewhere around $270,000 a year.

The Cost to Local Schools

Based on their experience with many of their other projects the BRIDGE people anticipate that the residential portion will bring about 70 school age children about evenly divided between Dixie students and Terra Linda High School students. Some detractors have been telling everyone that each child will add $10,000 in cost to the school districts. I suppose they arrive at this figure by dividing the school budgets by the number of students. That would be accurate arithmetic, but it is misleading. For example if you add one more student you do not need to hire any new people and you certainly don’t need any more schools. If you were to add 35 more children to the Dixie district you may or may not have to add an additional teacher. You certainly would not have to add any additional administrators, librarians or maintenance people. Depending on the student mix there may be a need to move in another portable classroom. So the marginal cost of adding the additional students is considerably less than $10,000 per student. I don’t know what that figure might be, and I’m not sure anyone else does now.

But certainly there will be some additional cost to educating the 70 or so children who will be added to the Dixie and Terra Linda HS enrollments. Let’s say just for blue sky thinking purposes that the number is $5,000 annually per student. I suspect that’s way too much, but we’re just supposing here. Seventy students at $5,000 each would be an annual cost of $350,000. $10,000 would come in direct tax revenue from the redevelopment leaving $340,000 to come from somewhere else. Marinwood alone has 1,700 homes. Lucas Valley has about another 500 homes. Terra Linda probably has another 2,500 homes. So maybe there are 4,700 homes in the two school districts. $340,000 divided by 4,700 homes is $73 a year per home – income tax deductible. So the net cost per home after taxes would be in the neighborhood of less than $5 a month. Frankly all of us would save more than $5 a month in gas by not having to drive to Ignacio or Terry Linda to shop.

However replacing the current ugly entrance to our community with attractive community serving shopping and services will make Marinwood a more attractive community and therefore increase home values which would increase the tax base and the amount of taxes designated for our schools which might make a tax increase unnecessary.

Weighing the Benefits of the Redevelopment Against the Cost

So,yes. Due to the tax advantages granted affordable housing developments there may be a cost to each of us to have the entrance to our community cleaned up and our local shopping returned. I think the cost will be too small to worry about when compared to the benefits each of us will enjoy and whatever cost does remain will be offset by our gas savings.

BRIDGE Housing will pay developer fees which are one time dollars to assist with capital improvements to our schools. These fees will be about $200,000 and will go a long way toward bringing in a new portable classroom if one is needed.

And there is another factor. Susan Adams has said that she is working with the schools, the county administrator and the Marin Community Foundation to address some of the funding issues. Her children went to Dixie, and she continues to support maintaining the high quality of our local public education. We’ll have to wait and see if anything develops there.

But also keep in mind as mentioned earlier that we will be getting additional tax revenues from the redevelopment that won’t be going to the schools. They’ll be going toward fire protection (but we won’t have to hire any additional firemen or have additional costs for a fire house), they’ll be going toward the Las Gallinas sanitary district (but the developer pays for the additional sewer lines and the existing system will be able to absorb the additional sewage), etc. We may well be dollars ahead, so what we could lose out of one tax pocket we may gain going into another tax pocket.

Will We Need A New Fire Engine?

And speaking of fire protection the comment has been made that our fire department would have to purchase a new truck to adequately protect the three story residential buildings. Our fire chief, Tom Roach, says absolutely not. He’s comfortable with what we have to fight any fire the new development might have at some point in the future. I think Tom knows more about this subject than the people who say we’ll need to buy a new fire truck.

In Summary

This memo has gone on long enough. I’ll summarize here. The proposed retail development in the north end of the property offers everything any of us have ever said we wanted in a redeveloped property. It will be very attractive. It will be a place we will all use frequently, and it will become a source of pride in our community. I’m personally looking forward to lunches with friends, coffee and reading the paper in the morning, have a beer while watching a game on TV and shopping without having to get on the freeway. The renewed shopping center will offer me another opportunity to spend time with friends and neighbors which I am very much looking forward to. The concerns expressed about the affordable housing residents are unfounded and ill informed. The costs to the community because of the tax relief the government gives to affordable housing projects should have minimal net consequences for each of us and will be very small compared to the benefits we will all enjoy from having a re-vitalized shopping center.

I recognize that no change happens around here without having to pass through the gauntlet and withstand attacks from all directions. That process brings out problems and can make for better projects, but once the facts are on the table and understood BRIDGE Housings proposal for the Marinwood Shopping Center will be the best thing to happen in Marinwood ever.

John Hammond



5 comments:

  1. "Unlike the other proposals the shopping center may be realized in the near future. Discussion of this project needs to stand on its own and not be swept into the larger debate involving other proposals."

    Hi John and thank you for the thoughtful analysis of the Marinwood Plaza-Bridge Housing project. Unfortunately this project can't just "stand on its own" and its impacts must be analyzed with other projects, per CEQA guildelines.

    The consultant that the County ultimately hires to write the EIR will first have to identify the Resource Study Area (RSA) which is the a determined geographic area surrounding the proposed project. For instance, the RSA for Marinwood-Bridge Housing project might include other developments from southern Novato down to the Civic Center in San Rafael (north-south) and St. Vincents to Grady Ranch (east-west).

    The EIR document must analyze the potential impacts of all past, present and probable future projects in the identified RSA so it can't stand on its own when being analyzed by an EIR.

    This is called the "cumulative impact analysis". An EIR must analyze cumulative impacts whenever a proposed project's individual impacts have the potential to combine with related impacts from other projects to compound environmental harm.

    The Guidelines define cumulative impacts as two or more individual effects which, when considered together, are considerable or compound or increase other environmental impacts. Even a tiny portion of the cumulative impact is caused by the proposed project, the EIR must analyze it. The ultimate goal of this analysis is to determine whether the proposed project's incremental contribution is cumulatively considerable and thus significant.

    A project's incremental impact may be individually limited but cumulatively considerable when viewed together with the environmental impacts from past, present, and probable future projects.

    Consider, for example, a development project that will have traffic noise impacts below the lead agency's quantitative threshold of significance. However, when the project's noise impacts are combined with the anticipated noise impacts of other past, present and probable future projects in the area, they may cumulatively raise noise levels above the threshold. Whenever this potential exists, the EIR must analyze cumulative impacts.

    The EIR will analyze various impacts such as noise, air quality, water resources, traffic, biology, fish and aquatics, geology, soils, paleontology. seismicity, terrestrial biology, transportation, hazardous materials, utilities, socioeconomics, public health, energy and growth inducement, cultural resources (archaeology), agriculture, land use, recreation, climate change and greenhouse gases (GHG).

    So indeed the applicant (Bridge Housing) should be required by the County to do a complete EIR on this project to really analyze the environmental impact that this will have.

    Thank you,

    Carol Brandt
    San Rafael, CA (former 10 yr Marinwood resident)

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    1. In response to Carol Brandt’s comments: Hi, Carol. We miss having you around Marinwood. My statement that the Marinwood Shopping Center project should stand on its own and not be wrapped up in the broader debate over other affordable housing projects in the Marinwood /Lucas Valley area in no way argues that there should not be an EIR. When I write that it should stand on it’s own what I am referring to is how we as community residents should look upon the project. My point is that the benefits we will gain from the project far outweigh the cost to us.
      Cleaning up the entrance to Marinwood, providing us with an attractive and convenient shopping, a restaurant and coffee shop and a place to visit with friends and neighbors is very much worth what we will have to pay for it. Whether we’ll benefit in any way from the other affordable housing projects proposed I’ll leave for others to discuss.
      John Hammond

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  2. Thank you for your letter, providing the history of the Marinwood Plaza, and the results of a survey of community interests for the plaza. Notably absent from the list of community desires for the Marinwood Plaza are the three things this development represents, specifically: affordable housing, increased taxes and a negative impact to the Dixie School District.

    Taking the last of these first, while you admit legitimate concerns with respect to our schools, increased taxes and other public services, you mis-interpret the statement regarding spending. It is not that each additional student will cost an additional $10,000, but rather that the current spending per student is $9,800, and therefore the addition of more than one student from the development will be dilutive to per student spending (this takes the fixed $10,000/year tax payment from the development into account). In other words, increase the numerator by a nominal $10,000 while increasing the denominator by up to conservatively 65 students, and spending per student must be less than the current $9,800. Unfortunately, this dilution will be on top of the 2014 Dixie School District budget cut of approximately $350,000. It is also important to recall that if class size in K-3 grades exceeds 20 students, the school loses Class Reduction Size (CRS) state funding. With the schools already at or near capacity, additional teachers and facilities likely will be necessary. The marginal impact of the Marinwood Plaza development to the schools is non-trivial.

    You rightfully mention that increases in taxes could help offset this impact, but the math needs some adjustment. First, your “blue sky” estimate of $5000/student is about half the average for California school districts (average is $9,733/per student, available on the California Department of Education website). So, doubling your “blue sky” estimate of $5,000 per student to be on par with the state, and taking the remainder of your logic, each resident would end up paying approximately $180 in increased taxes. This analysis would however be overly simplistic, as it does not take into account:

    1) households of persons 65 and older may opt out of certain school taxes, bonds, etc.,
    2) $450 per student, on average, is donated by the community for CanDo, supporting art, physical education, music, drama, and other programs,
    3) multiple fundraisers by CanDo and home & school clubs,
    4) additional lunches, staff, transportation, before/after care, facilities, etc., and
    5) donations of cash, time and supplies by the community.

    I would further point out that this analysis is strictly for the Marinwood Plaza, and each additional project (Oakview, St. Vincents, Grady Ranch, Rotary Village, Big Rock, etc.) would additionally need to be offset with a similarly scaled number, which really goes to the fallacy of your first premise, that we need not consider the total impact of all prospective housing. Justifying a housing development that adds 100% affordable housing in order to “remove a blight”, as you frame it, requires a look at the cumulative effect on our community. If the Marinwood Plaza project really has a negligible impact, it should withstand the test of a full site-specific environmental impact report which certainly our community leaders and planning commission would endorse to insure the soundness of the project.

    Continued in next post due to space....

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  3. continued from above....

    Finally, you ask, “[w]hat is the price to us to have this part of our community cleaned up and changed into a major community asset?”, then go on to say,

    “I have learned through all the years of working on this project that there are a number of constituencies that must be made happy before we will get what we want. There are the environmental groups, affordable housing advocates, the schools, the board of supervisors, the state of California government, the property owner, the contractor, the people who will finance the development, etc.”

    Notably absent from this list of constituencies is the individuals who live here and pay taxes. Aren’t our Supervisors supposed to principally represent the community’s interest, not the developers, affordable housing advocates, contractors, and financiers? In short, a full assessment and plan for this development, incorporating schools, police, fire, environmental, and other impacts is warranted, and we want our Supervisor to know this and properly represent her constituents.

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    1. Regarding the school financing issue: Yes, the arithmetic can get complicated, but look at the big picture. Seventy new students might require two new portable classrooms and a couple new teachers. The portable class rooms would cost about $100,000 each to acquire and put in place. The Marinwood Shopping Center redevelopment will pay about $200,000 to the schools to be used for capital improvements. So the cost for class rooms will be a wash. New teachers cost about $85,000 a year including benefits, or $170,000 for two of them. If you divide $170,000 by 70 students I come up with a cost under $2,500 for each child. I think I was being generous using $5,000 for each child in my arithmetic. Someone will have to explain to me how 70 new children will cost $9,800 each or $686,000 total.
      You also said that absent from my list of constituencies to be satisfied in any compromise are individuals who live here. I don’t understand that comment in that my whole statement was about how the project benefits all of us.
      John Hammond

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