Will Elk Grove Declare The Elk Grove Promenade Blighted?

Elk Grove’s own TARP fund? At the end of the Wednesday, January 13 Elk Grove City Council meeting, a regular meeting of the Elk Grove Red...

Elk Grove’s own TARP fund?


At the end of the Wednesday, January 13 Elk Grove City Council meeting, a regular meeting of the Elk Grove Redevelopment Agency was convened.

During that meeting city manger Laura Gill was questioned about the purpose of the redevelopment agency. Gill said the agency was formed following requests from Elk Grove’s Old Town Foundation seeking assistance in redevelopment of their special planning area (SPA).

Among several reasons Gill cited for the formation was the agency could declare structures within the study area blighted and the city could take mitigations steps. According to state law, blight conditions exist when the identified structure or area “causes a reduction of, or lack of, proper utilization of the area to such an extent that it constitutes a serious physical and economic burden on the community that cannot reasonably be expected to be reversed or alleviated by private enterprise or governmental action, or both, without redevelopment.” (see complete legal description here.)

To facilitate their redevelopment efforts, the city has hired and allocated up to $264,000 for San Francisco-based Seifel Consulting to conduct the initial study.(see map). Included in the area are older neighborhoods in Elk Grove including the Old Town SPA and the Elk Grove Promenade shopping center

Construction of the Elk Grove Promenade stopped over a year and half ago and several months later the developer, Chicago-based General Growth Properties, declared Chapter 11 bankruptcy. Given the continuation of the Great Recession and the developing commercial real estate collapse, prospects for jump-starting construction, much less completing the Elk Grove Promenade anytime in the near future are dim.

Gill acknowledged the city could use the study’s findings and declare the Elk Grove Promenade blighted. “We don’t know at what point the construction will start,” she said.

So what does it mean if the city finds the Elk Grove Promenade to be blighted? According to Gill the city could provide assistance to help re-start construction. “We may need to provide assistance to get that project jumpstarted again,” Gill said.

Gill added that during last year’s budget public outreach meetings, she was repeatedly asked what the city could do to get the Promenade project moving. “This may be an option to help the mall in the long term,” she said.

In August 2008 when the city council approved a hotel project on East Stockton Boulevard and Highway 99 just south of Elk Grove Boulevard, the site was found to be blighted. Because of this designation, the city council also approved a $1.8 million 15-year subsidy for Bay Area developer Reynolds & Brown.

Reynolds & Brown also has another shopping development planned for Grantline Road and Highway 99; directly across from the stalled Elk Grove Promenade. Reynold & Brown has been a significant contributor to the campaigns of city council members past and present.

While it will be at least nine months before the study is completed, it will be interesting to see if the Elk Grove Promenade is declared blighted. You can’t help but wonder if city taxpayers will be obliged to clean up the financial mess created by General Growth Properties and the city council that approved this failed proejct with Elk Grove's own TARP?

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Insania said...

I would think that declaring it blighted would be a very tough sell, indeed.

I cannot see this as a physical menace...it's already uninhabitable, it has private security, and it causes less crime(shoplifting and car burglaries) today than it will when finished. Maybe the occasional diseased field rat runs through it, but hey, at least it still has a home for a while.

I cannot see this as an economic menace either, as there isn't any low density satellite commercial activity yet installed around it to menace. If it is deemed to be creating economic blight, it would only be in the context that adjacent commercial property developers stand to lose...

Nonetheless, as much as it's an iconic symbol of Elk Grovian fiscal and social ineptitude it probably will be deemed blighted, if only to force another taxpayer funded subsidy to complete it.

Instead of calling it TARP, how about let's call it the Elk Grove Economic Stabilization Act of 2010. Remove all references to "troubled assets." Perhaps offer a free toaster or something to all residents...or better yet, a coupon for a free toaster if you visit the new Bed, Bath & Beyond at the mall. And validate our parking, please...

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