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Expanding the Stoneridge Shopping Center while developing housing has been an ongoing goal for the Pleasanton City Council, which is why the members voiced their concerns during last week’s meeting where they found out that virtually no progress has been made on either front.
The delays, according to city staff and the property owners of the mall, can’t be boiled down to one problem — some blame internal conflicts between property owners while others said the developer and main property manager, Simon Property Group, need to show more effort.
But, there is still a desire to at least try and move the project forward. That’s why the council unanimously waived the first reading of an ordinance to approve a sixth amendment to the development agreement between the city and the mall owners, which outlines a timeline where either some progress will be made, or the city will have to figure out a way to redevelop the mall site and pay for it rather than have the property owners pay.
“There’s a huge opportunity here, we’re sitting on a really large site … and the fact that we are having to pull teeth to get people to come to it and to plan it is really quite painful,” City Manager Gerry Beaudin said during the June 4 meeting. “I do believe this gives us the opportunity to get us moving in the right direction.”
“I don’t know if there’s going to be enough of a draw for everyone or if folks can figure out how to work together, but this is a good shot at it and taking a year to figure that out and hopefully get some progress made on the planning side is a good investment of our time,” Beaudin added. “Our alternative as the city is to pay for it ourselves, and we just don’t have the resources to do that right now.”
According to community development director Ellen Clark, the city originally approved what’s known as a development agreement for the expansion of the shopping center by 178,000 square feet in 1992.
Development agreements are contracts authorized by state law that provide property owners with more certainty about entitlements and obligations that apply to their property. It provides legally binding promises that developers can build projects while also promising that the city doesn’t have to provide infrastructure or pay fees for those projects.
Since the original development agreement for commercial expansion in 1992, there have been five subsequent amendments to the agreement with the last one having been approved by the current council in December. The agreement, since the fifth amendment, had approved a 362,790-square-foot shopping center expansion.
But when the council approved that expansion extension amendment late last year, it also emphasized the importance of the mall’s long-term vitality, which ties into the property owners’ plans to reimagine what the mall will look like and how to incorporate housing surrounding it.
The city even spent its own money, as Beaudin pointed out, to get started on a Stoneridge Mall Framework, which laid out how many housing units would be allocated to the shopping center area as part of the city’s new Housing Element cycle.
Despite that, many of the councilmembers asked the same questions last week: Why hasn’t anything been done since December, and will they ever see any progress done toward the project?
“There have been delays on getting this going — progress has not been happening,” Councilmember Valerie Arkin said. “The mall is struggling … that affects the property owners as well.”
She and others on the council asked staff and the property owners why there hasn’t been any progress on design or planning work, which was met with a wide range of answers.
Clark said that the developer had faced legal threats from a labor group and saw changes in key personnel who mainly dealt with the Stoneridge Mall, which detracted Simon Property Group from achieving any progress.
She also said there was a lack of ability to come to a consensus for how to move forward with the expansion, which is why the owners need to meet more and begin these discussions again in earnest, which is what the city hopes to achieve through this sixth amendment extension they just approved.
However, one main point that was repeatedly brought up was the reciprocal easement agreement (REA) between all the mall property owners, which speaks to the nuts and bolts of shared resources located at the overall shopping center property.
The issue, according to staff, is that the REA needs to be updated and include housing priorities, which it currently does not. Beaudin said throughout the meeting that the REA has to do with which property owners pay what and that those owners need to work it out between themselves and update that contract so they can begin to move forward in the planning process.
But more importantly, he said the city shouldn’t get involved — and it can’t, either way — with getting the property owners to come to a consensus of updating the REA.
That’s why the city’s sixth amendment extension has various criteria that, if not met, means the city must move forward without the financial help of the property owners.
The key terms of the proposal is that Simon Property Group will extend the term to six months and pay a nonrefundable $50,000 contribution to the city to advance the master planning for the future of the mall.
During these next six months, Simon will be working on getting matching funding from the other mall owners to support future planning efforts.
If the property owner can get the other mall owners to put in $150,000, then the development agreement will be extended for another 18 months — if Simon comes up with the $150,000 then the agreement will be extended another 24 months.
Beaudin and staff noted that even $200,000 is not enough money for the design work needed — he estimated around $1 million is needed — but the developer from Simon said it would hopefully help to get the project started.
“It is just seed money,” Cecily Barclay, a developer who has been working on this expansion since 2016, said during the meeting.
But as Barclay said, if they can’t get the money and the property group decides to not spend any more money, they will have to figure out a different way to move forward even though she said that is not what her bosses want to do.
She said the latest extension was the best way for the city and the developers to work together and bring all the other property owners on the same page and get some progress done on this expansion.
“This is not a perfect solution — it’s certainly not a perfect situation — but we do advocate and ask that we move forward in the way that this development agreement provides,” Barclay said.
She also noted that if Simon doesn’t get funding from the other owners within the next six months and puts in the $150,000 on top of the original $50,000, then it will still try to get the other owners involved financially during the next two years.
Some of the owners, however, spoke out during the meeting and said they did want to work together and get the planning done. They just had some issues with the development agreement and with Simon.
“We want to be at the table,” Jerry Hunt, who is part of the ownership group at JCPenney, told the council. “So what is the development agreement? It does nothing for the other owners of the mall, it does nothing for the city other than maybe an instrument of enforcement of progress.”
Hunt said he and other property owners went to the meeting to show they want to get back to discussions and move forward with the planning, but he added that the city needs to have clear milestones and objectives so that it can decide if it wants to keep going after six months.
As part of the discussion, the council asked Beaudin to commit to bringing the expansion amendment for an update one year from now.
