Good-bye, blight

Only time will tell if city leaders have gotten more than they bargained for by embarking on a plan to revitalize the site of a prominent eyesore south of downtown.

Following the regular Chico City Council meeting Tuesday evening (April 6), the panel reconvened as the Redevelopment Agency and gave city staff the go-ahead to purchase one of four parcels included in a plan to transform the northeast corner of Park Avenue and East 11th Street into a mixed-use project comprising 5,000 square feet of commercial space and 50 to 60 affordable-housing units. The properties border Little Chico Creek, which would be cleaned up to greenway standards.

In a 6-1 vote, council members agreed to pay $270,000 for the home at 168 E. 11th St. The property is located behind the old Taylor’s Drive-In, a dilapidated 1950s-era diner that’s been boarded up for decades. That building is another piece of the puzzle in the ambitious project on land adjacent to Little Chico Creek.

A majority of the council may have approved of the idea to revamp the site, but several people had serious reservations with the cost of the project.

“Look very closely at what you’re paying for this property,” said Michael Reilley, “because once you own it, you own its problems as well.”

Larry Wahl echoed the local insurance agent’s take on the site.

Wahl said that the entire project is “fraught with problems” and reiterated a number of concerns that surfaced during a public-comment portion of the meeting. He explained that he is skeptical that a design could provide enough parking for both the residents and businesses on just 1.5 acres. Another issue is that the site is home to abandoned and leaking underground gas-pump storage tanks that require environmental cleanup.

“Just because we’re an RDA, we shouldn’t overpay for a piece of property,” said Wahl, who cast the dissenting vote.

The veteran councilman and lone conservative was referring to the $910,000 price tag for the remaining three parcels, and his objections were repeated to some degree by Councilman Scott Gruendl.

City staff noted that the sale of the other three properties, which include another home on 11th Street and are owned by one person, is contingent on receipt of a grant to remove the contaminants. Cleanup is estimated to cost between $100,000 and $200,000, bringing the cost of purchasing and preparing all of the sites for development to an estimated $1.5 million. A goal is to have the land cleared by September and shortly thereafter to take proposals for development. The project area’s size and proximity to amenities, including a bus line and school (Chico Country Day School is across the street), make it eligible for housing-development tax credits.

Councilwoman Mary Flynn pointed out that the city doesn’t have nearly enough in the way of affordable housing. Mayor Ann Schwab chimed in, too, defending a project she noted will increase the property values in the surrounding area. “This project is classic redevelopment,” she said.

In other news, earlier in the evening the council approved a preliminary move to drop Blue Shield as the city’s health-care provider, because the company’s upcoming rate increases (40.6 percent) would mean a $900,000 hit to the general fund. City employees will vote on whether to join to the California State Association of Counties, a joint-powers authority composed of more than 200 other public agencies that equally share the costs of providing health care. That switch would result in premiums that cost $425,000 less than Blue Shield’s.

The 7-0 vote followed news from Finance Director Jennifer Hennessey that the cash-strapped city is now facing a $4.5 million projected deficit in the coming fiscal year. That figure jumped from the previous $3.6 million estimate when health-insurance increases came in higher than expected.

In another budget-related measure, the council approved an early-retirement program that would provide employees with an additional two years of service credit. The city targeted 34 positions for the program, for a cost savings of about $3.8 million annually. However, early reports are that only about half of those being offered the incentive are interested in the voluntary program. Hennessey warned that the actual savings, then, would not be nearly as significant.

In other words, the city has a long way to go to balance the budget.