Documents Show Elk Grove Exploring Developing 20-acres of City Owned Civic Center Land as a Shopping Center With Pappas

October 16, 2017 | The City of Elk Grove has taken steps toward developing 20-acres of city-owned land in the civic center as a pos...

October 16, 2017 |

The City of Elk Grove has taken steps toward developing 20-acres of city-owned land in the civic center as a possible so-called lifestyle shopping center. The information of this potential development was revealed as part of information request made to the City of Elk Grove.

The information was discovered as a part of a document request examining the city's relation with Birmingham, Alabama-based Retail Strategies (RS). Elk Grove has retained the services of the retail recruiter to help attract high-end retailers to the city.

Among the documents regarding the possible use of the parcel as a shopping center was an email exchange between Elk Grove economic development director Darrel Doan and an employee of RS. The other was an email from Doan to all five city council members, city manager Laura Gill, assistant city manager Jason Behrmann, and city attorney Jonathan Hobbs.

In the June 25, 2017, email memo from Doan to the council and city staff, he conveyed his idea to seek bids on using the 20-acre parcel as "a lifestyle shopping, dining, and entrainment [sic] center."

The entire email said:

As you may know, staff has been evaluating the possibility of issuing an RFP for the City‐owned 20‐acre parcel north of the Civic Center property, for development of a lifestyle shopping, dining, and entrainment center.  This effort would further several of the Council’s economic development and lifestyle Goals that were recently established at the Council Retreat.  The project, if successful, would provide great ameniti es for our residents and act as a regional visitor draw for Elk Grove.

The link below will take you to a draft of the RFP.  Please feel free to review the document and offer any and all feedback you may have.  I would be glad to meet with you individually to discuss this effort and review the document.

Please note, this document has not been released publicly and is still in draft  form.  For that reason, I would ask that you please not disseminate it any further than those people included on this e‐mail and that we not yet discuss this effort in a public setting.

Thanks, Darrell
The email document released appears to have the address for the RFP - request for proposal - Doan noted redacted. Heeding Doan's advise, none of the city council members are known to have spoken about this possible land use during city council meetings.

While the June 25 email appears to be the first mention of the idea to use the civic center parcel as a shopping center, Doan did communicate with RS's Ashton Antonetti, regarding an RFP on May 10, 2017.

Plans for the 76-acre Civic Center have changed numerous times since their inception as part of 2004's Laguna Ridge master plan. In one permeation, the 20-acre parcel, which is located between Elk Grove Boulevard and Civic Center Drive and east of Big Horn Boulevard had plans for a small retail/commercial structure, a hotel, parking, and a performing arts center.

According to design guidelines from October 2011, they included "reservation of easternmost 5 acres for the development of Full Service Hotel, Conference Center, Full Service Dining Restaurant, sufficient adjacent land area for large tents to house occasional larger events and exhibits."

The Pappas Connection 
Doan's email to Antonetti said the following:

Ashton thank you so much.  This will help us.  We met with Pappas today.  As expected, polically we have to give them first crack at being our developer/partner but I think there will be a way to bring in another group (Sywest) that can help get it right.  We are going to perfect the RFP/RFQ for a week or so and then ask Pappas to develop their proposal for our consideration.  Stay tuned…

The Pappas Doan is referring to could be Pappas Investments, a real estate development company with extensive interests in Elk Grove. Among other notable properties owned by Pappas in Elk Grove include the offices that house the California Correctional Healthcare Services.

Given its extensive holdings in Elk Grove, Pappas has on occasion been a lightning rod for controversy. To attract the CCHS to relocate in the city, the Elk Grove City Council gave Pappas Investments a $1.4 million incentive.

More recently, the Elk Grove City Council also approved an $8 million sales tax incentive for Pappas' proposed Costco store on the corner of Elk Grove Boulevard and Bruceville Road. Although Pappas received the incentive almost six months ago, construction has not yet started.

As the email suggests, Doan understands after dealing with his superiors on city staff and the Elk Grove City Council, "politically we have to give them [Pappas] first crack at being our developer/partner..."

The Pappas company and family members have been nothing if not generous patrons of the Elk Grove City Council. Along with several past city council members, current members including Mayor Steve Ly, Vice Mayor Steve Detrick, and Council Members Pat Hume and Darren Suen have received either director cash or generous in-kind contributions, and on some occasions, both from Pappas.

While Doan seems to understand the political considerations, he went on in his email to suggest after the Pappas group was contacted to develop their proposal, another team could be brought into the discussion "that can help get it right."

That group is San Rafael, California-based Sywest. According to their website, their "core competency is the focused and deliberate ability to create long-term value through either ground-up development or repositioning of existing underperforming assets."

Among the properties in Sywest's portfolio is the Elk Grove Shopping Center located at 9341 Big Horn Blvd.

Also included in the correspondence was Elk Grove City Planner Christopher Jordan discussing how the RFP should be composed. Emails from Antonetti, some of which she uses the last name Arrington, informs Jordan that " Specifically worth including would be a psychographic or tapestry segmentation map (assuming they are favorable to lifestyle focused retailers)."

One day after the correspondence with City Council, Doan emailed Antonetti with the name and link of another person who they had discussed who could be a member of the Pappas team. That person, James Kessler, works for Stonehedge Property Group. 

On July 13, Doan also emailed Antonetti and asked her to drop Jordan from the email list. "I don't want to many cooks in the kitchen just yet" he wrote. 

Although the documents released via the public records act request stopped in mid-August, aside from emails between Doan and Antonetti discussing minor points, there was no further mention of developing the Civic Center parcel as a shopping center or the proposed RFP. Ironically as the Elk Grove City Council stated one of the primary reasons for supporting the proposed $400 million casino was that is would be a catalyst to complete the unfinished Outlet Collection at Elk Grove, development of a high-end, lifestyle shopping center in the Civic Center would hurt prospects for recruiting retailers to the languishing outlet shopping center.

Along those lines, Doan tried to arranged a WebEx conference in early August between Elk Grove, Retail Strategies, and Michelle Waak, senior vice president of leasing for the Howard Hughes Company. After arranging the meeting, it was canceled on August 14. 

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1 comment

D.J. Blutarsky said...

Hey Doan, there's a big green E-tran bus headed your way that needs an oil change. Could you get under there and check the transmission while you're at it? Thanks!

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