City to sell cornerstone downtown space

Plot earmarked for nonprofit offices, condos

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Locals won’t see a movie in the park on the 400 block of downtown anymore, but they might get a bite to eat.

Council members Monday approved selling the open space next to The Vault and Briggs Building parking garage, but the developer must still refine design plans.

In May 2016, the city council approved going forward in exclusive talks with a developer and the Community Foundation for San Benito County to sell the city’s property in the 400 block of San Benito Street for a multi-use development.

Mayor Ignacio Velazquez didn’t participate in the vote due to a financial conflict of interest as owner of The Vault.

He recused himself from Monday night’s vote, leaving Vice Mayor Karson Klauer with the gavel.

The vote came after lengthy debate, while Housing Program Manager Mary Paxton gave a presentation to council members regarding the 400 block proposal. Additionally, one of the primary donors for the nonprofit building spoke publicly after staying anonymous to this point.

Last fall, the Del Curto Brothers Group and the Community Foundation for San Benito County approached the City of Hollister about developing the 400 block property. The city owns the plot after the dissolution of the former Redevelopment Agency, which purchased the property following damage to structures on the lot during the 1989 Loma Prieta earthquake.

The move to sell the property comes after the California Legislature passed the Dissolution Act in 2011 to eliminate redevelopment agencies in the state. The city’s successor agency, which replaced the redevelopment agency, must eventually unload all remaining redevelopment agency assets.

The proposed purchase price for the 400 block property is $390,000. That number comes from a 2015 appraisal, according to Paxton’s presentation. The city previously appraised the project at $220,000 in 2013.

“The city was also required by the (state) department of finance, before we could transfer the 400 block to the city, to enter into a compensation agreement with all the taxing entities that were involved in the redevelopment agency,” Paxton said.

Paxton listed the involved taxing entities, which include San Benito County, Gavilan Community College, Hazel Hawkins Hospital, Hollister School District, San Benito High School District, San Benito County Water District and the San Benito County Office of Education.

“We proposed that we not pay property taxes or the assessed value of the land while we held it for redevelopment, that we’d continue to use it, to allow the public to use it,” Paxton said. “The taxing entities agreed to that. So when we sell the property, the proceeds will be distributed to all the taxing entities and the city should receive close to $43,000.”

According to the 400 block proposal, total estimated project costs are about $4.5 million.

Conceptual plans to develop the property include a philanthropic center, or new headquarters, for the Community Foundation of San Benito County. Private donors Randy and Rebecca Wolf have committed $900,000 to the project.

Rebecca Wolf spoke during public comment.

“I think it’d be great for the community,” Wolf said. “I think the Del Curto brothers, they’ve done a couple projects in town that’ve been very successful. I think to revitalize downtown, you have to have people living there so that they can go to the restaurants and be included in downtown.”

Originally, the 400 block proposal included four mixed-use buildings with commercial on the ground floors and 16 condominiums on the upper floors. During Monday’s meeting, council members were presented with a different layout and design concept featuring two buildings instead of four.

Paxton explained the changes.

“In this Development Disposition Agreement, there’s some things that have changed from a year ago,” Paxton said. “One is, it’s now a tri-party agreement and it’s also a phased project. The Community Foundation would go first and the Del Curtos would be on the slower path.”

The philanthropic center would be a two-story building around 9,000 square feet, Paxton said. The Del Curtos’ building would be three stories with 8,000 to 11,000 square feet of ground floor commercial space and 14 to 22 condos split between a second and third floor. The size could change through the upcoming site and architectural review process.

The proposal’s site and architectural review is to be submitted within 75 days of the agreement, according to an amended exhibit from the proposal. The Phase 1 building permit would be issued within 230 days, around seven and a half months, of the agreement. Construction of Phase 1 is expected to be completed within 15 months of receiving the building permit, meaning the philanthropic center could be built by April 2019.

Phase 2 building permits are expected to be issued within 470 days, or 15 months, of the agreement. This means construction of Phase 2 would be completed within 18 months of receiving the building permit. This pushes possible completion of the Del Curtos’ building into March 2019.

Some officials expressed concern about the initial specifications.

Councilman Jim Gillio said the first rendering was more appealing. Councilman Ray Friend also commented on the new design.

“I don’t think building a warehouse downtown is a good idea and that’s what it looks like,” Friend said of the Del Curtos’ building. “Just so the developer hears, it’s going to go through planning and design review. This is not going to cut it.”

Darin Del Curto spoke to council members on the design issues during public comment.

“I know there is some concern about the change of the layout and the design of the project for the retail and for the condominiums,” Del Curto said. “It turned out that the seismic requirements and fire suppression and different aspects of the project made it financially not feasible for us to move forward with that particular design.”

He explained the Del Curto Brothers Group planned to build one- and two-bedroom condos for sale between $299,000 and $329,000. He hoped his group could work together with the city.

“We’re willing to massage it a bit,” Del Curto said.

The proposal now moves to site and architectural review by the city’s planning commission.

According to the proposal’s timeline, construction is expected to start in 2018.

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