CLEARLAKE – The Clearlake City Council voted Thursday night to give the go ahead to a regional shopping center plan expected to include a Lowe's home improvement store as its anchor tenant.
The project will proceed without an environmental impact report (EIR), and on the vote to approve the mitigated negative declaration environmental document, the vote was 3-2, with Council members Joyce Overton and Roy Simons voting no.
However, three other motions of the five required to move the project forward – including a disposition and development agreement with Danville developer KK Raphel Properties LLC, who will buy 15 acres of the airport property on Highway 53, and a land exchange with an adjacent property owner – were 4-1 votes, with Simons being the lone dissenter. A motion to abandon a portion of right-of-way got a unanimous vote.
About 50 people from around the county attended the meeting, including several current and past supervisors, among them Jeff Smith, Denise Rushing and Jim Comstock. Former supervisors in attendance included Gary Lewis and Don Ellis.
City Administrator Dale Neiman discussed the city's struggles, which began early on. He said the county processed the city's incorporation application. “When they incorporated the city they tried to transfer the liabilities away from themselves to the future city.”
For many years, redevelopment helped subsidize the general fund, which Neiman said stopped in 2007.
The project, Neiman said, would help the city substantially at a time when officials are examining bankruptcy and detaching portions of the city to return to the county out of concern for budget shortfalls. They're also having to cut services and reduce the police force.
“You know as well as I do it's been real difficult the last three years balancing the budget,” he told the council.
Neiman said Lowe's estimated revenues in the Clearlake location are believed to be as high as $40 million annually, but added, “You don't know until it actually opens.”
It's also projected to create more than 300 jobs, 172 of which would be full time, he said.
The project would support the upgrading of the city's sewer system, which Neiman said has spilled 40,000 gallons of raw sewage into streets, creeks and Clear Lake in the last few years.
Neiman said if every family in Clearlake traveled outside of the county for shopping an average of six times annually, but shopped in Clearlake instead at Lowe's from now that, there would be 14.1 million less miles of travel out of county each year, which would result in air quality improvements and energy savings.
He said the airport property has significant problems that require infrastructure assistance, which is addressed in the plans. “This is by far the most mitigation I've ever seen on a project,” he said, noting $10 million is being used for mitigation.
In opening public comment, Mayor Judy Thein laid down the ground rules, which included a three-minute limitation per person, with each speaker being limited to one trip to the microphone. She also introduced a new timing device with a red bulb on top and a buzzer to signal speakers that their time was up. Thein would strictly enforce the limits throughout the three-hour meeting.
Approximately 22 people spoke during the meeting's public comment portion; of those, 15 spoke against the project or were critical of it, five were for it and the rest spoke generally without voicing an opinion.
Businesswoman Jeri Spittler challenged Neiman's comments about the reduction of police officers on duty down to only one or two per shift, alleging that eight days after Andre Williams opened Silk's Bar and Grill six officers walked through one night.
She accused the city of racial profiling, but when she demanded an explanation Thein told her that wasn't the item they were discussing and cut her off.
Tim Williams said he understood that the council believes the project is “the fastest, best revenue producer,” but he called the revenue projections “bunk.”
Victoria Brandon, speaking on behalf of the Sierra Club, said the group hasn't taken a position on whether or not the project is good or bad, just that more information is needed, which is why they were asking for an EIR.
She also presented a letter from Middletown Realtor David Neft, who listed three previous and major mistakes by the city, including incorporation, not insisting that the Best Western El Grande be built on the lakeshore and letting Wal-Mart in. “In his opinion, this project would be No. 4,” she said.
Brandon suggested that Clearlake's real assets were its small town feel and the lakeshore, which is what should be used to develop prosperity for the city.
Clearlake Oaks resident Glen Goodman suggested that Lowe's may push for big concessions, including major tax breaks, which will result in the city's assumptions about revenue falling far short.
“There are so many better ways to invest this money,” he said.
Clearlake resident Rick Mayo said redevelopment in the city had been intended to help revitalize Lakeshore Drive, but that never happened.
Instead, the city now is turning to the airport plan, which he called “a field of dreams” that isn't going to bring the kinds of economic benefits the council is expecting.
Businessman Vince Metzger said he would be happy to take the airport property off the city's hands for a similar deal as that being offered to KK Raphel Properties. He said he didn't think the city got a good deal. “I don't think we had to bend as far as we did.”
Ronda Mottlow of Clearlake Oaks, was concerned that the land be studied since it once had belonged to the Koi tribe. She also suggested that the city may be forced into doing an EIR, which could cost it a lot of money.
“Don't' rush into it. The money is not that much,” she said.
Philip Murphy of Lakeport said the city's projections don't consider how many businesses and jobs will be lost as a result of the project. “That's my big concern here.”
He told Neiman, “You've been hiding the truth from the council and the public about the actual cost of this project,” because they hadn't calculated the funds the city had to repay the Federal Aviation Administration for improvements on Pearce Field.
He said the city should invest in the lakeshore, which has better potential than Lakeport's. “You haven't put anything into it and it shows.”
Clear Lake Chamber of Commerce Executive Director Lori Peters said the chamber did a survey of local businesses and they received strong support for the project and for new shopping opportunities.
She said some local businesses also expressed interest in having additional stores at the location.
Realtor Dave Hughes said he didn't think the project had been pushed too quickly, and suggested that the county needed to work to compete with shopping opportunities in Sonoma and Mendocino counties.
District 3 Supervisor Denise Rushing, who emphasized she wasn't speaking on behalf of the board, told the council, “You're in a bit of a fix as a community.”
Rushing, whose Northshore district includes a redevelopment area, said, “Redevelopment done right is exquisitely hard work.”
She encouraged them to do an EIR, calling much of the project's analysis “flawed,” and added that the county needs to begin to tap into its citizens and entrepreneurs to help turn the economy around, as small businesses are an economy engine.
Don Turman, who has lived 10 years on Clearlake's lakeshore, said opportunities like the proposed development don't come along often, bringing with it the funds to make improvements, such as to the sewer system.
“This town needs help,” Turman said.
He said the lakeshore has no business district, and there is no reason for tourists to visit Clearlake. “That doesn't mean there can't be,” he said, explaining he didn't see another alternative for bringing upgrades to the city.
Don Ellis, a former county supervisor, suggested the council needed to take a longer, harder look at the project. “You're not going to gain customers. There's only so much money to be spent here in this area,” he said, offering his support for local businesses like Mendo Mill.
Mike Mayfield, whose family owns Mendo Mill, thanked Ellis and said they believe competition is good and they deal with it everyday. He said the company has been in Clearlake for 31 years and “We'll continue to be here.”
Addressing comments about retail leakage made by community members, Neiman said that he knows how much money in sales tax revenue Wal-Mart generates for the city. He said it's confidential but guaranteed, “The city would be substantially hurt if Wal-Mart left.”
Responding to Rushing's comments, he said there are different types of redevelopment in different areas, and added that there is no question that the Lakeshore Drive area is a priority.
Redevelopment attorney Iris Yang, who was at the meeting as she had been for the Jan. 7 hearing on the project, said a study was done of large-scale contractors and most said they purchased goods outside of Lake County, but would buy from a Lowe's if it were here.
She said the developers would have to meet several conditions before the redevelopment agency would sell the property to them, including having financing, permits and construction plans in place. There also would have to be an agreement with a Lowe's or another home improvement store. “We believe it will be a Lowe's.”
Council members state positions
During the council's discussion, most of the council members brought with them prepared statements to read regarding their positions on the project.
Councilman Curt Giambruno said the project is “a new beginning for the city,” and will bring employment opportunities, revitalize the economy and improve the environment through the sewer upgrades. He thanked Neiman and staff for helping “make this dream a reality.”
Overton questioned how the city would protect itself against the developer going bankrupt. Yang said they would have to have performance bonds and funding assurances.
Overton said she thought the $7 million maximum the city would offer in redevelopment funding support was too high, although she believed the project would bring more shopping and job opportunities.
She wanted some of the redevelopment money to be kept aside for Lakeshore Drive, and also stated that she believed the city needed to do an EIR by law.
Councilman Chuck Leonard said the regional shopping center would jump-start the economy and that a boom along the lakeshore will result.
“We've been sitting here doing nothing,” he said, noting that Clearlake is a low income area that needs jobs.
Simons said he wasn't against the Lowe's plan. “I am against the way we're going about it,” explaining that nobody has calculated how much tax they'll lose from existing stores.
He told the developers that they were welcome to buy the property, but “buyer beware – it's as it,” he said, voicing his opposition to using redevelopment funds to support the infrastructure.
Simons also said “gimme a break” to the idea that people will come from Lakeport, Napa or elsewhere to shop at the center.
Thein said the plan was one of the most controversial issues they've faced in past decades, but she supported it because she believed the city's financial stability depended on it.
“Without change there is no growth,” she said. “Change brings new possibility.”
She said the regional shopping center idea has been around for many years, but they could never quite get there, and she felt accusations that they were rushing it through were without merit.
Overton asked the developers if they were willing to come down on the $7 million maximum, suggesting $5.5 million.
Fred Katz, a KK Raphel Properties partner, said the property required “extraordinary public improvements” and that they had actually asked for more money to get the property to a developable condition.
“The long answer to your question, I guess, is no,” he told Overton.
Neiman said the property improvements will make the project feasible and improve other properties as well. “This was a tough agreement to negotiate.”
Leonard moved each of the five items for approval. Votes were as follows:
Certification of the draft mitigated negative declaration/initial study in accordance with the California Environmental Quality Act: 3-2, with Simons and Overton voting no.
Authorization for the redevelopment agency executive director (Neiman) to execute the draft disposition and development agreement: 4-1, with Simons voting no.
Authorization for Neiman to execute the land exchange with the adjoining property owner to the south: 4-1, with Simons voting no.
Authorizing the city administrator to execute the draft disposition and development agreement: 4-1, with Simons voting no.
Authorizing the abandonment of part of the right-of-way for Airport Road: 5-0.
At the meeting's end, when called on for the city administrator's report, Neiman said he had nothing.
“I'm glad it's over and I'm tired,” he said.
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