When Will The San Ramon City Center Become a Reality?

Patch asked Louis Dagen, a San Ramon resident who recently sat on a city committee about the status of the San Ramon City Center project, to tell our readers what his committee found out in their research.

This is what he reported to us:

By Louis Dagen

A downtown, a gathering place — a City Center. San Ramon has planned this over the past 30 years, yet all we have are empty fields and dusty signs.

This past spring, Mayor Bill Clarkson appointed an ad hoc committee of four local residents (Jason Gong, Greg Lonie, Michael Smart and me) to meet with city staff and stakeholders in the project; gather and synthesize information from these meetings and other sources; and report our findings to City Council and the community at large.

To avoid bias, the four of us are volunteers, live in San Ramon and do no business with either the city or Sunset Development, the owner of Bishop Ranch and future developer of City Center.

We decided to report our findings by answering three questions we most frequently hear:

1. Why isn't City Center being built and why isn't the city building it?

The easy answer is that it's the lousy economy. It's clear the economic justification for a project this size (approximately 2.2 million square feet) has lessened during the recession.

But there's a bigger picture that we'd like everyone to remember: We only get one shot to do this right.

This will be an $850 million complex sitting on 40 acres in the middle of town. The committee spent a lot of time with Alex Mehran, the owner of Sunset Development, asking about his timelines, economic triggers, vision for the future, etc. We believe he is being cautious, in a good way. He is waiting for the right economic conditions to justify his investment in the project. From his perspective, he has to juggle retailer commitments, residential demand, financing and the like.

Also, to build the western half of the Plaza District in City Center, he'll have to demolish Bishop Ranch 2, with its 200,000 square feet of rented office space.

Therefore, because this project is such a big risk for Sunset, Mr. Mehran won't start to build it until he thinks significant demand will exist upon completion. The Committee noted that Sunset, not the city, has paid all the project development costs and also plans to improve the Iron Horse Trail congruent to Bishop Ranch over the next year. We concluded that Mr. Mehran wants to see the City Center built but is waiting until an improving economy justifies the risks.

Why can't the city take on Sunset's role? Simply put, the city doesn't have the manpower, money or resources. And as a practical matter, the city is not in the business of using tax dollars to build risky development projects that compete with local businesses.

2. When will City Center be built?

Short answer: We don't know. However, we can make some educated guesses.

Our committee reviewed the KPMG Retail Survey, which says that retailers see consumer demand increases in late 2014 or early 2015. We noted the low (3 to 5 percent) commercial vacancy rates in San Ramon. We also spoke with Federal Realty, the developers of Santana Row in San Jose.

We concluded there are no specific triggers (like a predetermined unemployment number, gross domestic product, etc.) that would start construction. But our best guesses are:

Office District: Because there's so little vacant commercial space in San Ramon, we need one of more big new tenants.

Plaza District: We need firm retailer commitments. If the KPMG survey is correct, that's two to three years away.

Civic District: We need healthier city finances. Our guess is that once the City Center is up and running, the property and sales tax revenues will generate enough funds to construct a new City Hall, library and transit center.

3. How can the city (and residents) help support City Center?

We made a list of nine suggestions to the City Council. For you as a Patch reader, the best thing to do is continue to shop locally as much as possible. Your support of local businesses helps our economy and the sales taxes on your purchases help keep the city on a strong financial footing.

We as a Committee believe the City Center is not a matter of "if" but "when." Sunset is committed to build it once the timing is right. And San Ramon is attractive for four reasons: our people, our parks, our safet, and our schools. As long as these fundamentals don't change, then someday soon we'll have our downtown —our gathering place — our City Center.

Tell us what you think of the project and its status in our comments section.

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