– The county has approved funding for a key highway interchange
in east Gilroy, clearing the way for once-nervous city officials to
seal the deal
this week on a major regional shopping center whose immediate
future hinged on the transportation project.
County supervisors voted unanimously Tuesday to approve nearly
$3.1 million in funding for a new interchange project at U.S. 101
and state Highway 152, a move that paved the way for the Gilroy
City Council to follow with an official vote to grant formal legal
planning approvals for the Regency Centers’ Gilroy Crossing
shopping center Wednesday morning.
GILROY – The county has approved funding for a key highway interchange in east Gilroy, clearing the way for once-nervous city officials to formally “seal the deal” this week on a major regional shopping center whose immediate future hinged on the transportation project.
County supervisors voted unanimously Tuesday to approve nearly $3.1 million in funding for a new interchange project at U.S. 101 and state Highway 152, a move that paved the way for the Gilroy City Council to follow with an official vote to grant formal legal planning approvals for the Regency Centers’ Gilroy Crossing shopping center Wednesday morning.
City officials, who spent over a year landing the shopping center and working it through various regulatory processes, were relieved after Wednesday’s vote. When teamed with another regional project across 152 planned by the Newman development group, the Regency center is expected to bring up to $4 million annually in new sales tax revenues to the city later in the decade – money the city is already counting on to help pay for increasing employee costs and expanded public safety programs.
“It’s a relief,” Mayor Tom Springer said. “It’s been a long process, and there were a lot of issues to be worked out.”
Doubt had been cast on the availability of funding for the Valley Transportation Authority interchange project earlier this fall after county supervisors put the interchange money on hold, along with millions of dollars in other transportation projects funded by the 1996 voter-approved county Measure B half-cent sales tax program.
Under a new priority system adopted in that vote, decisions on whether to approve construction funding for the interchange – along with some other widening work on 152 and millions of dollars in other projects not yet in construction – were put on a list that county analysts said could receive only partial funding, due to declining sales tax revenues from the slowing economy.
But that move hit home locally when Caltrans, the state’s transportation agency, threatened to deny key permits needed for the Regency project unless the VTA ramp improvements were funded.
Caltrans tentatively lifted that condition last month when new revenue information – including news that bids for a major North County interchange project came in nearly $8 million under estimates – helped District 1 County Supervisor Don Gage secure commitments the county would be able to fund the interchange.
That allowed Gilroy’s City Council to conceptually approve several site and building designs needed for the 75-acre, 456,000-square foot Regency development in early December. But city officials were forced to wait a month to formally adopt them – and brave fears anything could go wrong – until Wednesday’s special meeting, after the VTA funding was official and actually locked into place.
Springer – who had raised concerns the funding would never materialize – credited Gage for his work in securing the vote.
“Don said ‘I’ll get the money back, and he did,’ ” he said.
Gage said Thursday there was “never a question” the money would be available.
“It’s like having a big checking account,” he said. “You put money into the projects that are ready to go and you get more money coming in.”
But he also credited Gilroy for providing a local match to pay for a portion of the project – something that supervisors thought was important. Regency and other east-side developers are ponying up over $5 million for the transportation improvements through a special arrangement set up by the city.
“It was a unique situation that no one else in the county has done,” he said. “Here’s a community that has a special project, and they put $5 million of their own in, and you have to respect that. From the board’s point of view, this was a good deal because we save $5 million.”
City officials said this week’s votes allow Regency to move forward to secure building permits for actual site work at the center and also work to complete lease agreements. Potential tenants include major retailers such as department-type stores Target and Kohl’s, a Barnes and Noble bookstore and specialty retailer Bed and Bath and Beyond.
Construction could begin next spring, with a phased opening starting potentially in the fall.