Caltrans threatens to stop shopping center project until promise
of road money reappeared
Officials from the City of Gilroy are breathing a sigh of relief
this morning.
After wining and dining two major developers and giving them
millions in incentives to come to Gilroy to build 1 million square
feet of commercial space, the deal that would bring an additional
$2.7 million annually in tax revenue nearly came tumbling down.
Caltrans threatens to stop shopping center project until promise of road money reappeared
Officials from the City of Gilroy are breathing a sigh of relief this morning.
After wining and dining two major developers and giving them millions in incentives to come to Gilroy to build 1 million square feet of commercial space, the deal that would bring an additional $2.7 million annually in tax revenue nearly came tumbling down.
The reason is that Caltrans, the agency that holds the trump card on the project’s ultimate approval, was not willing to issue the necessary encroachment permits for use of the surrounding roadways until the agency was certain that improvements to the area roads were moving forward.
“Basically, they said ‘hey Regency (Centers) and Newman (Group), if the VTA is not going to do the work, then you are. Otherwise, we can’t let you open,'” said Gilroy City Administrator Jay Baksa.
Then Caltrans backed off and okayed the project on Thursday.
“It’s still white-knuckle time but I feel more optimistic now than I did a week ago. I think we should have the deal sealed up, but it could be a couple of weeks for the paper work to go through.”
The proposed development is located just east of the junction of U.S. 101 and Highway 152.
The reason for the heightened concern is that the city has been banking on the projected sales-tax revenue that the projects would generate to help fund the city’s new police and fire stations and even repair the downtown.
Concern over the projects’ survival first came to the forefront in September when the County Board of Supervisors voted to delay funding for a 101 off ramp that would ease traffic approaching the shopping center. That’s when Caltrans balked.
“That would have impacted everything in this city,” said Baksa. “But now the project is as official as you can get without a formal action from Caltrans.”
Ironically, Baksa credited Santa Clara County Supervisor Don Gage, who voted with his peers in September to reallocate the funding for the project and distribute it for use in other transportation projects to the northern part of the county, for getting things back on track. Now Gage has lobbied supervisors to refund the project.
“If Don Gage says it’s going to happen, I’m optimistic that it will,” said Baksa. “What this all might mean is that there will be delays in the project, but it will get done.”
Initial plans called for the work on Highway 152 to be completed by the end of 2003-at approximately the same time that the two shopping centers were slated to open.
“We’re not talking about a little project here,” said Baksa. “You’ve got to realize that this is more traffic than The Outlets generate.”
The first phase of the commercial projects include the building of a Costco and Lowe’s store. That phase, however, has moved forward without a hitch as it was determined that mitigations to 152 were not required in order to accommodate the traffic generated from the two retail stores.
In recent weeks, Gage has been working to ensure that the deal would get done.
“I didn’t ever think this project was in jeopardy,” said Gage. “But everyone else did think so.”
Mitigations to Highway 152 include its widening from two to four lanes from U.S. 101 all the way east to Silacci Way. Mitigations also include signal lights at Camino Arroyo as well as the placement of ramps in both directions on U.S. 101 and 152 that link the two roadways.
VTA Measure B money, property assessment bonds and city traffic impact fees are funding the mitigations on Highway 152 and U.S. 101.
