Re: Malling Sacramento

[Tim Bousquet <chicoexaminer@xxxxxxxxx>]

Malling is a national phenom, of course, but
California has particular circumstances that have
accelerated it. When Prop 13 was passed, capping and
rolling back property tax rates to 1973 levels, the
fundamental funding mechanism for cities was pulled
out from under them. I'm not sure what the levels were
in the Sacramento area, but here in Chico something on
the order of 90% of local tax coffers came from
property taxes. There were separate taxes for each
program: a component for General government, a
compnonent for libraries, a component for the park in
Chico (a rather large expense), and so on. (Schools
have another portion of the property tax, which is
separate from local government funding.)

There was an old 1960s program, however, that led to a
way out of the funding problem: the so-called
"redevelopment agencies." These RDA's were originally
intended to rebuild (read: kick poor people out) the
urban ghettos and gutted commercial centers. An area
that was "blighted" was defined and an RDA set up,
governed by a Board of Directors that was appointed by
City and/or County elected reps. The RDA was empowered
to issue debt, by which they rebuilt infrastructure.
This in turn result in higher property tax returns, a
portion of which, the "tax increment," was returned to
the RDA to pay off the debt, instead of going to the
state (despite the local government's dependence on
property tax, the majority goes to the state). Certain
rules were place on the RDAs, which is how the whole
program got the political consensus needed to form in
the first place: at least 20% of the generated funds
had to go to low-income housing, and the RDA had to
make a finding that it was "eliminating blight"
through its programs.

Whatever the cynical uses of RDAs, and however much we
can criticize the philosophy of redevelopment, they
seem to have been used for their intended purpose
through the 1970s. But when Prop 13 passed, local
governments suddenly found that they were the best
mechanism for bringing in more funds. Chico was
actually one of the first places to hit on the
concept, thanks to a particularly coniving City
Manager named Fred Davis. About 1980 or so Davis
established an RDA to the south of town, which
consisted entirely of cattle fields. In a new twist,
the Chico City Council appointed itself as the Board
of Directors for the RDA. The area was then deemed
"blighted," and the RDA began issueing debt, by which
a freeway interchange was built, and sewer and road
systems were built. A mall builder was found, and the
area became the retail mecca for all of northern
California. There was a genius here: not only did
property tax receipts pay off the debt for the
infrastructure, but local sales tax receipts
skyrocketed, and now sales taxes pay for about 70% of
local governing costs.

In effect, the tax burden has been shifted from
property owners and onto mall patrons.

With Chico and a few other places as examples, cities
across California began jumping on the mall bandwagon.
In more rural areas, like the entire state north of
Sacramento, you can judge which towns made the
transition successfully-- towns with thriving malls
made it, towns without essentially died. There are
rotting corpses of old retail centers all over the
place around here, places with names like Orland,
WIllows, Oroville, Gridley, and so on, that simply
have no retail activity at all, save gas stations and
fast food outlets.

In short, you can blame malling in California in large
part on Prop 13. I'd bet bottom dollar that Elk Grove
is using an RDA to finance the public works needed by
the new mall.

tim
--- Seth Sandronsky <ssandron@xxxxxxxxxxx> wrote:
> June 28, 2001
> PEN-L,
>
> Yesterday in Elk Grove (a suburb south of
> Sacramento), the City Council
> voted to allow developers to construct a mega-mall
> in Elk Grove.  Following
> a Sacramento Bee news article is an Elk Grove
> farmer's personal testimony
> from the current issue of Because People Matter,
> Sacramento's progressive
> newspaper ($15 for a one-year subscription [six
> issues]: BPM, 403 21st
> Street, Sacramento, CA 95814).
>
> Elk Grove OKs massive mall: The city reverses the
> county's rejection of the
> 295-acre complex.
> By Mary Lynne Vellinga
> Bee Staff Writer
> (Published June 28, 2001)
>
> In their most significant development decision to
> date, Elk Grove City
> Council members Wednesday unanimously approved
> building a $500 million
> shopping mall on the city's rural southern edge.
>
> With their 5-0 vote in favor of the Lent Ranch
> Marketplace, the council
> repudiated Sacramento County's earlier rejection of
> the mall, which occurred
> before Elk Grove incorporated in March 2000. The
> Sacramento County Policy
> Planning Commission had concluded that the 295-acre
> retail complex was too
> massive for its sensitive location on the urban
> services boundary, a line
> adopted by the county in 1993 to contain growth.
>
> City Council members said the mall, to be located
> along Highway 99 at the
> Grant Line Road exit, would allow Elk Grove
> residents to shop in their own
> community and pull in badly needed sales tax
> dollars.
>
> "We're strengthening the fabric of our community by
> approving this project,"
> said City Councilman Michael Leary.
>
> Once the mall is built, Elk Grove "will be a
> regional player," said
> Councilman Dan Briggs.
>
> "Finally, we've gotten something here," Briggs said.
> "Sure downtown
> (Sacramento) doesn't appreciate it. ... The county
> never appreciated us
> ever."
>
> Elk Grove Mayor Jim Cooper supported the project but
> was less effusive.
> "It's time to move on; hopefully, we made the right
> decision," he said.
>
> Opponents continued to argue that a regional
> shopping mall should not be
> built on farm fields well beyond the current edge of
> suburban growth and
> just across the freeway from two giant propane
> storage tanks. They warned
> that the mall would worsen air pollution, snarl
> traffic and lead to more
> development south of Kammerer Road, the county's
> growth boundary. They also
> contended that Elk Grove does not have sufficient
> population to support such
> a large retail development.
>
> The Environmental Council of Sacramento and the
> Sierra Club have threatened
> to sue.
>
> "This is the opposite of smart growth," said Doug
> Jaffe, vice president of
> the Environmental Council of Sacramento.
>
> The council received last-minute letters of protest
> from Legal Services of
> Northern California, which contended the developers
> needed to provide more
> affordable housing for low-wage mall workers, and
> from the California
> Department of Conservation, which said not enough
> was being done to save
> farmland that will be paved over by the mall.
>
> City staff advised the council that the project --
> which includes a 280-unit
> apartment complex -- complies with the county's
> requirement that a certain
> amount of land be set aside for multi-family
> housing. But Cooper nonetheless
> pressed for more affordable housing on the site.
> Developer Martin Feletto
> responded by saying the entire apartment complex
> would be made affordable to
> low-income residents, and that additional land in
> the complex could possibly
> be used for housing.
>
> "We're going to be in court one day litigating this
> if we don't take on our
> responsibilities," Cooper said.
>
> In a separate letter, Kenneth Trott, environmental
> coordinator of the
> California Department of Conservation, said the
> proposed development fee of
> $950 per acre to replace farmland lost to the mall
> was far too low. He
> pointed out that The Nature Conservancy is paying
> about $2,000 an acre for
> farmland outside the urban services boundary and
> thus presumably not in the
> path of growth. A consultant to Elk Grove said the
> fee is the same as the
> one imposed by the county in the new growth area of
> East Franklin, also in
> Elk Grove.
>
> If built as planned, the 1.3 million-square-foot
> Lent Ranch Marketplace will
> be larger than Arden Fair mall. Lent Ranch will be
> surrounded by an
> additional
>
> 2 million square feet of stores, entertainment
> facilities and apartments.
>
> The Robinsons-May department store chain, Macy's,
> Dillard's and Gottschalks
> have signed letters of intent to occupy the mall,
> which is being built by
> General Growth Properties, a national mall
> developer. The surrounding retail
> is being developed by M&H Realty Partners of San
> Francisco.
>
> The center is expected to be an important source of
> sales tax for the young
> city, which under the terms of its incorporation
> must turn over 90 percent
> of its property taxes to Sacramento County for the
> next five years. Elk
> Grove must continue to pay a declining share of its
> property taxes to the
> county for the next 25 years.
>
> "Clearly when 90 percent of your property tax is
> going to another agency,
> the general fund becomes more heavily reliant on
> sales taxes," Elk Grove
> City Manager David Jinkens said.
>
> The Lent Ranch retail complex is projected to
> contribute $6.6 million
> annually to city coffers.
>
> Feletto said construction likely will start by early
> 2003. So far, he said,
> the slowing economy had not affected the project.
> "There's always a risk
> that the economy might force a retailer or someone
> to defer their plans, but
> so far we've not seen that."
>
>
------------------------------------------------------------------------
> The Bee's Mary Lynne Vellinga can be reached at
> (916) 321-1094 or
> mlvellinga@xxxxxxxxxxx
>
>
> Pastoral Perspective
> By Tom Mahon
>
> It was raining softly, the sky a medium shade of
> grey. My two brothers and I
> rode on the old Farmall tractor and wagon to feed
> the cows and calves
> waiting impatiently in the back field. We donít
> usually waste our precious
> labor with three men doing a two-man job, but this
> day it was right to ride
> together and savor the reassuring bonds of
> brotherhood; we were facing the
> storm together.
>
> When we got to the gates, Bob noticed that we
> weren?t alone. A flock of
>
=== message truncated ===


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