Developer withdraws from Scotts Valley Town Center vision
SCOTTS VALLEY >> Vacant Santa Cruz-owned land in the heart of Scotts Valley’s Skypark is no easy sell.
In the latest stumble for Scotts Valley’s more than two-decade-old vision to develop a new “heart” for the city’s downtown, developer Foothill Partners Inc. will back out of its involvement in developing the Scotts Valley Town Center.
“I just got an email from Foothill Partners that they’re intending to withdraw from our exclusive negotiation agreement,” Scotts Valley City Manager Jenny Haruyama said Monday.
Though many issues have contributed to developers’ difficulties in completing its 58-acre vision for the former Santa Cruz-owned Sky Park Airport, one major hurdle includes obtaining some three parcels, about 8 acres worth, from the city of Santa Cruz.
This spring, a Santa Cruz-commissioned appraisal of the vacant land put the properties’ combined value at about $8.3 million, said city Economic Development Director Bonnie Lipscomb. Since then, Santa Cruz and Scotts Valley negotiators, on behalf of the developer, have exchanged several iterations of a purchase sale agreement, Lipscomb said. The El Dorado-based developer, led by Doug Wiele, had been in a Town Center exclusive negotiating agreement with Scotts Valley since September.
A changing retail market made it difficult for the developer to obtain commitments from desirable retailers, Haruyama said.
For one, the market is shifting toward online sales. Secondly, bigger retailers tend to overlook Scotts Valley due to its small population, not realizing the potential San Lorenzo Valley customer base.
Scotts Valley Mayor Randy Johnson, who serves on the City Council’s Skypark subcommittee, said developing the Town Center has been a hole in his resume over his tenure, an project whose future he would like to bring to resolve by the end of his current term.
“What happens is, everything pretty much gets down to cost of land and the cost of developing. So the higher the land cost, the greater the risk. I think in some ways, that’s where we are right now,” Johnson said. “When we get back to the risk situation, developers and businessmen in general are risk averse.”
As Scotts Valley continues to update its general plan document, the city may be at a “critical juncture” that would allow city leaders to step back and look at its Town Center-specific plan afresh, Haruyama said.
“The plan is almost a decade old, so there might be a need to take a look at that plan and refresh it and see if there’s some changes, because what is palatable in the market may not coincide with what the plan reflects,” Haruyama said.
Asked whether the city might need to consider an updated plan for the site, Johnson said developers always will need to weigh the realities of land costs.
“The city of Scotts Valley is not going to fork over any money to develop this, because we don’t have any,” Johnson said. “We’re going to let the market decide whether it’s a viable thing — most things happen organically. We’re hopeful that there is a fair price, a fair profit and also something fair for the citizens of Scotts Valley.”
The Town Center project, as described in the city’s 2008 plan, envisions a walkable new Scotts Valley town green surrounded by two- and three-story buildings with 180,000 square feet of retail on the lower levels and about 250 residential units housing or office space above. Of the 58 total acres bounded by Mt. Hermon Road, Skypark Drive and Blue Bonnet Lane, the plan includes 15 acres of vacant centrally-located land.
Source: Santa Cruz Sentinel, July 24, 2017
Author: Jessica A. York
Photo Credit: Lucjan Szewczyk — Santa Cruz Sentinel
Read More: http://www.santacruzsentinel.com/business/20170724/developer-withdraws-from-scotts-valley-town-center-vision