The high stakes power play to find an end game for Gilroy’s unreinforced masonry building issue – a 30-year saga concerning the plight of downtown’s 18 buildings deemed structurally unfit to survive a major earthquake – took a giant step in the City’s favor Monday night in Council chambers.
Following two hours of tempestuous debate – at one point Councilman Peter Arellano wondered aloud if Council had something against minority owned buildings and businesses – Council voted 4-3 in favor of imposing real property liens on URM building owners and others who are delinquent on administrative citations.
In plain English, real property liens mean that URM owners cited for not completing structural retrofits will have to start paying the City fines that have been accumulating against their properties, as mandated by section 6.50 of the URM ordinance. It slaps URM owners with a $500 monthly fine for failing to submit a complete building permit application and engineering analysis report by June 15, 2012 and an additional $1,000 monthly fine for failing to complete the required mandatory retrofit requirements by June 15, 2013.
Among those on the hook, two URM owners owe the City $151,072 and $164,700, respectively.
The seven URM properties – some owned by a single person, others by families or limited corporations – along with another five properties and four parcels of land on the list of delinquent administrative citations, now have 10 days to engage City staff and organize a payment plan to suspend the lien. If they fail to do so, the lien will be recorded with the Office of the Santa Clara County Recorder.
Local developer Gary Walton questioned the threat of strong-arm tactics before the meeting. He was just as indignant during his three minutes at the public speaker’s lectern Monday night.
“It may be legal, but it’s not right,” Walton said. “You’re going to end up with a bunch of empty lots and you’ll have cut the heart out of this town.”
As members of the audience applauded Walton’s rhetoric, Mayor Don Gage hit back with a few truths of his own.
After almost three decades of trying to work with URM building owners through numerous outreach meetings designed to foster collaboration; establishing a URM Task Force; drafting voluntary and mandatory retrofit requirements; and threatening numerous fines that were never imposed – Mayor Don Gage said the City is at its wit’s end.
“This is the only way to get people to the table to start talking to us,” he intoned. “Just listen to what is going on here. We need to solve this problem because it undermines our enforcement programs.”
Giving City code enforcement officers the “teeth” to deal with URM owners who have ignored repeated requests to fix their buildings – while other downtown building owners pay the money and move forward with retrofits – is at the crux of the City’s new “no more Mr. Nice Guy” stance.
“People are crying because they can’t afford to do it, but they won’t come to the City and talk to us,” Gage said. “This is our last resort to get something done.”
URM fines: ‘The mafia doesn’t charge that kind of interest’
Two owners are in the hole for a lot more than others on the list. Sunil Patel of Fremont has landed a total bill of $151,072 for his two properties at 7517 and 7525 Monterey St., and Lynette M. Hill, the named trustee of 7491 Railroad St., is on the hook for $164,700, according to City documents.
The reason for Patel and Hill’s high fines is because both parties were issued citations for blight violations and abandoned constructions in addition to the URM seismic safety violations.
Councilman Bracco – who along with Arellano and Councilwoman Cat Tucker cast the dissenting votes – is astonished at the size of the fines and the 10 percent monthly late payment penalties the City added to delinquent citations.
“I won’t vote for this. I don’t believe it’s fair. You’re setting everybody up for a disaster,” he said. “The mafia doesn’t charge that kind of interest.”
Sunil Patel’s business partner Amit Patel was at Monday night’s meeting.
“Me and my partner purchased the two buildings in 2006 for $720,000,” he said. “That was most of our savings at the time.”
Patel explained how the Great Recession derailed their construction plans for the three-story, multi-use building that was envisioned.
“The rents dropped by half or more and none of the banks that we talked to would lend us money,” he explained. “We haven’t been collecting rent, we’ve had no tenant since 2008…I really don’t know what to do.”
Taking the URM seismic safety violations out of the equation for Patel and Hill would still leave them owing $139,672 and $153,300 respectively.
“We are ready to demolish this building now,” said Patel. “Do I fight the penalties or do I take the path of least resistance?”
That sort of thinking creeping into the downtown mindset worries Walton. Forcing the destruction of Gilroy’s downtown heritage is something future generations won’t thank today’s decision makers for, according to the local developer.
“No one ever says, ‘Man I’m glad we tore down all our historical buildings,’” he added.
Whether URM building owners like Patel opt to tear the edifices down remains to be seen, but Councilwoman Terri Aulman had almost the final word of the evening. In her view, public safety is of paramount importance and hanging decisions on Gilroy’s economic outlook is only postponing the inevitable.
“Earthquakes don’t wait for good times or bad times,” she said. “For those that don’t come to the table, too bad, so sad.”
The issue of Gilroy’s downtown URMs has dragged on since 1986 when a state law was enacted requiring cities in “seismic zone 4” – which runs the length of the California Coast – to inventory URM buildings, establish a loss reduction program and report progress to the California Seismic Safety Commission.
Gilroy introduced in 2011 its present URM ordinance, which includes securing URM walls to the roof and floors in multi-story buildings, repairing or removing façades and bracing parapets.
Local developer and downtown advocate Gary Walton says the City “went beyond state law and came up with something Draconian…this whole thing has been a bizarre nightmare.”
State law only “recommends” that local governments create ordinances for mandatory strengthening programs, seismic retrofit standards and reducing the number of occupants in a URM building, according to a 2003 report to State Legislature from the Seismic Safety Commission.
