More Downtown Permits

City Council moves 70 building permits slated for other areas;
Fee waiver extension discussed
Gilroy – Developers have snapped up all but three of the remaining permits for downtown construction, but city leaders eager to stoke interest in redevelopment have shifted dozens of new home-construction permits to the area.

The seven-member city council also is discussing a one-year extension of a policy that frees developers from having to pay any fees to build downtown.

On Monday, council members shifted 70 building permits earmarked for market-rate homes elsewhere in the city to the downtown area. Late last year, council approved 100 additional permits to meet booming demand.

“It’s the same principle behind the incentives for when we were bringing in retail and the big box stores,” Councilman Russ Valiquette said. “We knew we had to get a certain amount (of developers) in and we knew we needed to do something to get them here. We know we need to put some fire under people to start rebuilding downtown.”

Valiquette said he was leaning in favor of a one-year extension on impact fees. Normally, the city charges developers thousands of dollars in fees for each project, based on the rationale that development increases burdens on city roads and services.

The fee waivers, set to resume in January, began two years at the suggestion of a task force crafting development guidelines for the downtown. Based on the task force recommendation, council members also loosened regulations mandating a certain amount of parking for downtown projects. Together, the policies inspired a torrent of housing and commercial project applications, with several dozen already approved and dozens more in the planning stages.

David Sheedy, a partner behind a mixed housing-commercial project on the corner of Lewis and Monterey streets, was among the first developers to take advantage of the fee waivers. He supported an extension of the policy.

“I think that’s an excellent idea to keep the momentum going in the downtown,” he said. “The risk of investing downtown was pretty high if you had to pay the complete fee waivers. This softened the impact on the owners so they could try and improve their properties.”

The Sheedy development represents the typical scale of proposals for the downtown core. But it is not just smaller projects that may take advantage of additional building permits and extended fee waivers.

One project by local developer James Suner involves 60 units just south of the Platinum Theaters off Monterey Road. Another proposal by former council member Tony Sudol involves converting the old Indian Motorcycle plant off 10th Street into 120 residential units and commercial space.

The city no longer has enough permits in either the affordable or market-rate categories of its building-permit competition to accommodate either project. But Mayor Al Pinheiro made clear the latest permit allocations are intended for buildings in the downtown core, between Fourth and Sixth streets. In particular, he hopes to use the additional permits and the promise of renewed fee waivers to convince nearly a dozen property owners that the time has come to knock down or upgrade buildings out of compliance with earthquake codes.

He and most other councilmen oppose the idea of lifting all restrictions on the pace of downtown development. Pinheiro did not rule out, however, the possibility of approving more permits on a case by case basis.

“I can see the need,” Pinheiro said, “but let’s not think that all of a sudden there’s a blank check for things on the fringe taking away from the core – that’s the focus of revitalization right now.”

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