CLEARLAKE, Calif. – The plans for a regional shopping center development in Clearlake are being discussed with local officials and are set to make a reappearance on the Clearlake City Council's agenda this month.
KK Raphel's proposal to build the shopping center on Highway 53 at the site of the now-closed Pearce Field airport property had appeared stalled last year after the Sierra Club Lake Group filed a lawsuit over the city not doing an environmental impact report (EIR) on the project.
But Clearlake's interim city administrator, Steve Albright, met with developers in mid-February to get up to speed on the project, with developers expressing their continued interest in moving forward.
“The bottom line is we're able, willing and want to do it” – but only provided the city is willing to partner on the costs of infrastructure improvements, said Mike Raphel, a principal in the company.
Raphel said he's been contacted by community members asking him about the project's status. Likewise, in recent months community members have gone before the Clearlake City Council during public comment to speak in favor of the shopping center, arguing that it will bring much-needed jobs and sales tax revenue.
The project appeared to be a dividing line between candidates for Clearlake City Council last November, with Jeri Spittler and Joey Luiz – who had questioned the plan – elected over open advocates of the center like Jim Scholz and Planning Commissioner Bill Perkins.
Two days after Spittler and Luiz were elected, then-City Administrator Dale Neiman, a staunch project advocate, resigned, saying he wasn't willing to work with the two new council members.
Neiman also told Lake County News in an interview on Nov. 4, the day he announced his resignation, that the shopping center plan – which he had stated in community meetings was an important project for the city's future – was finished.
“If the Lowe's project was still viable, I felt I had an obligation to stay here until that was resolved one way or the other,” he said at the time. “But since the Lowe's project won't be moving forward it really doesn’t make sense for me to stay.”
He said that with the election he believed a 3-2 voting block had formed against the center, composed of Spittler, Luiz and Mayor Joyce Overton, with Council members Curt Giambruno and Judy Thein likely to continue their support.
Overton said at the time that she was against the process involved with the shopping center's approval, but not necessarily against the center or out to kill the plan, and that it would be an issue for the council to decide in the future.
She said she wasn't against using some of the city's redevelopment funds for the project, “but I am against using it all.”
When Neiman left he instructed the city's attorney working on the lawsuit to stop work on the case until his successor was chosen or the council gave direction. By that time the Sierra Club already had received from the city a proposed settlement agreement.
In early February, Albright – the newly retired city manager of Trinidad in Humboldt County – joined the city as its interim administrator, a position he'll hold while the recruitment for Neiman's permanent replacement goes on this spring.
Albright said he traveled to Sacramento Feb. 18 to meet with KK Raphel about the project. That same day, he met with the city's attorney to discuss redevelopment issues and the project.
“Since it's still in real estate negotiations I don't have anything to report,” Albright told Lake County News afterward.
He said he'll discuss those negotiations in a closed session with council on March 10.
Before the city can move forward on the plan, Albright said the city needs to sit down with the Sierra Club and negotiate an agreement about how to settle the lawsuit
“So that's, to me, the next step,” he said.
Cheri Holden, chair of the Sierra Club Lake Group, said from their perspective the suit has remained at a standstill – “with no movement whatsoever” – due to the city's reorganization.
However, Albright informed the Clearlake City Council at its Feb. 24 meeting that as part of the March 10 closed session he also intended to bring to them a proposed settlement to the Sierra Club lawsuit.
Albright, who told the council that one of his objectives is to get the lawsuit settled, said the city won't look at an agreement unless they're confident that it's a reasonable settlement and will allow them to go forward with analyzing the project.
He also told the council Feb. 24 that, while there is a concern that deadlines for the shopping center deal have passed, that's not the case.
During his Feb. 18 meeting with legal counsel, Albright said it was brought to his attention that the disposition and development agreement with KK Raphel includes a clause that stops the time lines for a variety of cases, including litigation.
Once the case is settled, the time lines would resume. Albright said the city would then need to be concerned about following through. “We could be open to a lawsuit if we don't perform.”
He told the council his job is to work on the performance part of the city's agreement with KK Raphel.
“I know it's controversial but we still have an agreement,” he said.
Many community members have come forward to speak on behalf of the project.
On Dec. 9, at the same meeting as Luiz and Jeri Spittler took their oaths of office, Clearlake resident Janice Cooper spoke during public comment, introducing the “Citizens for the Prosperous Growth of Clearlake.”
She said the group's goal was to support the council in efforts to lead the city into prosperity. Cooper added that creating jobs, revenue and preventing retail leakage through developing a regional shopping center will achieve those objectives.
Then, at the Feb. 10 council meeting, a group of community members took to the podium during public comment to urge the council to move on the shopping center.
“If you need to do an EIR, do it,” said Carolyn Chavez, a former council member. She warned that other parts of the county were courting developers, and that the center would help the city save threatened redevelopment funds.
Scholz told the council, “The only thing stopping this project is the will of the city,” adding, “Please help our city grow.”
At last week's meeting, Supervisor Jeff Smith also spoke in favor of the project, noting a survey he had done of area residents who he said were largely in favor of it, and advocating what he said were its positive benefits.
Developer is still interested
Following the Nov. 2 election, KK Raphel wasn't sure what was next for the plan.
“It probably can't move forward the way it was,” Raphel said at the time, recounting the effort that went into making a proposal to the city, a process that lasted several years.
Somewhere along the way, he noted, “people started to oppose the project.”
The fundamental issue was whether the city would still be willing to spend the close to $6 million in redevelopment funds to assist with addressing the site's infrastructure problems, he said. If the city wasn't interested, the firm planned to move on.
But in a late February interview Raphel – noting that the concerns for the project were the same – sounded more optimistic.
“We're still interested in going forward, we're still interested in working, but we want to make sure that the council's on board, that they want to go forward, and we still need to deal with the Sierra Club,” Raphel said.
He added, “Our goal is to get back into it,” but that they needed to get a sense of where the city is.
Following the election, Raphel said he called all of the council members. “I think the feeling was, let's let things settle down,” he said. “So it seems like now is a good time.”
As for possible time lines, Raphel said if the Sierra Club dropped the lawsuit and required no EIR but more studies, the project could be completed in 14 to 16 months. However, if an EIR is required, it would take about three years to complete the project.
“It's just a function of the resolution of the Sierra Club,” he said.
Raphel said an EIR will cost his firm $250,000 to $300,000. “If we have to go through an EIR and that's what they're going to require, we can go through that,” but Raphel said the firm wants assurance that the city will commit funds to improving infrastructure, and that there is a “finish line.”
If the project moves forward, a Lowe's could still be the anchor store, although Raphel said the corporation would have to be recontacted. Other anchor tenants, like Kohl's or Target, also are possible. “Until we get direction, there’s no reason to ask the question,” he said.
It's been slow for builders in the shopping center industry. At a state industry update in Sacramento a few months ago, Raphel said it was reported that one shopping center had been under construction last year, and that wasn't expected to change in 2011.
There is an inventory of existing houses, and Raphel said retail usually follows housing. There are many retail vacancies available at lesser rates than building new storefronts from the ground up.
“From the development standpoint you're not seeing much new happening anywhere,” he said, and deals are hard to come by, although, “It's a good time to get through entitlements.”
Raphel said Lake County is unique because there is so little retail in the area, which means the major retailers won't have a new store taking away from their adjacent stores. That was a reason Lowe's felt comfortable with the new market.
Raphel said the shopping center can bring an estimated $450,000 in annual sales tax into the community, allowing improvements along the downtown corridor on Lakeshore Drive.
Many community members said in public meetings on the plan held last year that they wanted the redevelopment funds devoted not to Pearce Field's infrastructure but to Lakeshore Drive instead.
“Somehow it became one or the other,” said Raphel. “Our attitude has always been, it could be both.”
He said with the Lake County Sanitation District going forward this year with issuing bonds for improvements to its Southeast Regional Wastewater System, the needed redevelopment funds may be less than the $6 million that's been estimated.
Raphel said a number of cities have realized that they need to both have revitalized downtowns and shopping centers – and that one can lead to another.
“Windsor is a prime example,” he said, noting that the town once had been obstinate about big box stores, but how have allowed them while rebuilding the downtown.
Raphel added, “At some point Clearlake will get there, with us or without us.”
E-mail Elizabeth Larson at
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