Council may ease up building owners

City looks at reducing penalties for earthquake safety repairs

REPAIRED BUILDING This business on Monterey Street is one of the unreinforced masonry buildings that was successfully retrofitted to prevent earthquake damage.

The Gilroy City Council, stepping back from tough talk during the 2018 election, on July 1 asked city staff to find ways to reduce late-payment penalties for owners of unreinforced masonry buildings identified as unsafe in an earthquake.

Just three days later, the first of two of the biggest earthquakes in California in 20 years hit Ridgecrest in the Mojave Desert, renewing calls across the state for more aggressive steps by cities to reduce earthquake damage and save lives.

Since the Loma Prieta earthquake in 1989, a number of storefronts in Gilroy’s downtown have remained vacant. Many of them were designated as unsafe, unreinforced masonry buildings. The buildings were red-tagged, and tenants were forced to leave until repairs were completed.

During the 2018 election campaign, council candidates said they would be tough on property owners who had not updated their buildings to code or left the facades in dilapidated condition. Some candidates, including council members Carol Marques, Dion Bracco and Peter Leroe-Muñoz said they would consider using eminent domain to get the buildings under city ownership so repairs could be completed.

Since the election, the council has approved a series of policies that are intended to make the city more conducive to downtown business development.

In its consent agenda, in which items are approved by acclamation with no votes taken, on July 1 the council unanimously approved a Downtown Façade Improvement Pilot Program.

Later in the meeting, council members informally agreed to direct city staff to come back with plans for unreinforced masonry building owners to enter into performance agreements as a way to waive penalties that accumulated because of the 10 percent monthly interest on late fees or unpaid fees.

In the 30 years since the Loma Prieta earthquake, multiple city councils and administrators have tried to find the right way to get Monterey Street buildings up to code and filled with tenants. 

The hardline stance on city fees was adopted in 2011 in an effort to show owners that the city was serious when it came to getting the buildings up to code and the 10 percent interest incurred monthly was meant to incentivise owners to pay on time.

In the staff presentation to the council there were 17 unreinforced masonry buildings, eight of which had already been retrofitted. Six buildings had permits and are in the progress of work and three did not have permits issued.

Up to this point the city has collected $69,000 in fines.  A greater amount of fines has not been paid, from owners of buildings like 7760 Monterey St, 7541, 7443 Monterey St, 7440 Gourmet Alley, 7533, 7539 Monterey St, 7530 Gourmet Alley, 7529, 7531 Monterey St, 7511 Monterey St, 7451, 7451‐1/2, 7452 Monterey St and 7401 Monterey St, which each have outstanding fines over $100,000.

Four out of the eight completed retrofitted buildings have outstanding fines, three out of the six buildings that are currently being retrofitted have outstanding fines and two of the three buildings that have not yet begun retrofitting owe fines.

Council also discussed reimbursing building owners who paid interest on their fees, that number according to the staff report, was around $8,750.

Mayor Roland Velasco said at the meeting, “I want to see the property owners invest in their buildings. I’m not interested in the city making money off of these buildings.”

[subhead] Façade improvement:

In a related action, the council members unanimously approved a consent agenda item for a “facade improvement plan” for its downtown corridor.

The city’s newly approved façade improvement program will provide 1:1 matching grants up to $5,000 to businesses that qualify. As of now the program will run through July 2020.

City staff will begin to contact eligible businesses now that the program has been approved. The money will go toward improvements like awnings, paint, windows, and other minor improvements, according to the program outline.

“Should the cost of improvements exceed the maximum grant amount of $5,000 plus the grantee’s share of $5,000, the grantee shall be responsible for any excess costs,” said the program outline.

Applications for the program have to be submitted by the property owners and can’t include liquor stores, adult entertainment enterprises, massage establishments, pawn shops, cigarette stores, gambling establishments, or tattoo parlors.

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