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Vallejo Scores a Housing Coup

Cognitive science has taught us that a human being cannot keep more than seven things in its mind at any given time. That figure, of course, does not apply to local governments in California, which appear unable to focus on more than one thing at a time. Perhaps we should set up a charitable organization for cities suffering from the condition known as Single-Purpose Agenda Syndrome (SPAS). I can see television ads right now featuring a bureaucrat, in short sleeves and pocket protector, looking balefully into the camera, as the voice-over says, "A city's mind is a terrible thing to waste." One city that will not be featured in the Single-Purpose Agenda Syndrome ad campaign, however, is Vallejo. The Solano County city has been able to juggle three agendas military base reuse, promotion of home ownership and neighborhood preservation without dropping any of them. The case in point is Roosevelt Terrace, a complex of 600 two-bedroom apartments formerly used by Navy personnel stationed at Mare Island. (The city is the base reuse authority for the former Navy installation, which closed in 1995.) By converting the military housing into market-rate condominiums, the city did a bunch of things at once, in addition to reusing a Navy base: It created home ownership possibilities in a mature city with limited opportunities for new housing; it lowered the density of the complex, making it more compatible to a middle-class neighborhood; and the city even cut itself a share of the profits. Most of the truisms about military housing do not apply to Roosevelt Terrace. We tend to think of military housing as isolated on bases; Roosevelt Terrace, like much of the other housing for Mare Island, is located in a middle-class neighborhood. (Much of the neighborhood, in fact, originated as military housing, most of which has been demolished and replaced with conventional subdivisions.) We also tend to think of military housing as flimsy stuff that is usually too dilapidated to save. The Vallejo project, however, is made out of poured-in-place concrete, eight inches thick. For that reason, the developer, De Silva Group of Dublin, chose to rehabilitate the units rather than demolish them. Despite the almost glacial pace of Pentagon decisions, Vallejo has acted rather quickly and efficiently to convert Mare Island. Although the EIR/EIS was completed more than three years ago, the Navy decided to convey the base to Vallejo only in late 1999, and only in November did the city and the Navy come to an agreement about the schedule for remediating the contaminated sites on the former Navy installation. Notwithstanding, the city has gone forward on Mare Island and has leased a total of 2.5 million square feet of industrial space to 50 tenants, including the U.S. Forest Service. Roosevelt Terrace provides another example of the city's aggressive strategy for reusing the old Navy base. "The city's approach on Mare Island has been to put available properties on the market as quickly as possible, so we went for a negotiated transaction shortly after the base was closed," said Alvaro da Silva, the city's director of community development. (Nearly everyone in this story is named Silva, and none of them are related.) The homebuilder and the city agreed on a deal three years ago but had to wait until the Navy conveyed title to the city, which only happened in May. At that time, the city went into a fast-track mode to approve the various entitlements for the project. The city conveyed title to the property to the developer in October, when construction began on the project now to be known as Villages at Terrace Park. (Well, at least it's not in French.) The deal features incentives for the developer on the front end and a reward for the city on the back end. The city sold the 19-acre, 50-building development for a very modest $1.57 million. In turn, the city receives a share of net profits on a sliding scale: For the first $3 million in profit, the city will take a 20% share; for the second $3 million, the city's portion increases to 33%; thereafter, the city takes 50%. "In the final analysis, the city gets about 40% of the profits," said Peter Silva, project manager for De Silva Group. He was philosophical about the city's big cut, and said the payments to the city are analogous to the share that a developer would pay to the land-owning partner in a real estate development deal. The actual profitability is unknown because the developer would not disclose its costs and has not finalized the prices. Under current per-square-foot market rates, prices would start at about $85,000 and go up to about $180,000. In comparison, prices for single-family homes in Vallejo are now in the high $200,000-range. The development plan calls for the demolition of seven buildings and the construction of a new, centralized sports facility and common area. The buildings, formerly made up entirely of two-bedroom units, will now become a mix of 314 condominiums of two-, three- and four-bedrooms with all new finishes and appliances. And although the Roosevelt Terrace is reasonably well maintained, the units are architecturally uninspiring, insofar as they resemble a row of shoeboxes. To dress up the homes, the developer has hired PDF building design of Suisun City to provide new porticos, or projecting front doors, and to alter the roof lines so the projects seem less monolithic. The entire complex is being fenced in and gated. As with many of the deals I examine, the development of Villages at Terrace Park represents a constellation of special circumstances not easily replicated elsewhere: An unusual developer who was willing to wait years for the project (albeit one with tremendous upside); a city that was given a promising property; and, of course, the overheated housing market of the Bay Area. Still, Vallejo was able to match its assets with the needs of its community. Real planning, as opposed to single-issue planning, is the ability both to pursue and to coordinate different goals at the same time. Vallejo was able to keep its eye on the ball, or on several balls, all at once. As for other cities with Single-Purpose Agenda Syndrome, I'm taking up a collection for them. As the voice-over on the public-service announcement says, "Only you can help."
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