Mayor unveils new push for Downtown San Jose Redevelopment

Editorial: Mayor unveils new push for downtown San Jose redevelopment

By Denis C. Theriault

Mercury News

Posted: 12/02/2008 08:15:41 PM PST

Already acting on last week’s pledge to invest in San Jose’s core, Mayor Chuck Reed is pushing a sweeping development plan for the northwestern edge of downtown. And the centerpiece would be a newly sweetened deal for an urban market in San Pedro Square sought by former Mayor Tom McEnery.

The proposal, which the council will weigh next week, arrived the same day more disappointing news emerged about the pace of construction in San Jose. Planning applications, building permits and revenue from building fees all have plummeted significantly in the past year.

But Councilman Sam Liccardo, who is backing Reed’s effort along with Vice Mayor David Cortese and Councilwoman Nancy Pyle, said the difficult economy only underscores the need to move forward swiftly and decisively.

“It emphasizes the importance of taking advantage of scarce opportunities,” said Liccardo, whose district includes the proposed development. “It’s ambitious, but the good news is we have developers and property owners who are ready and willing to collaborate with one another.”

Called the Peralta Action Plan, in honor of the historic adobe that sits in its heart, the plan encompass several blocks from First Street to Highway 87 and from Bassett Street to south of Santa Clara Street. The goal is to leverage a series of projects already in the works or proposed in that area, from high-rise condominiums to office buildings, new courthouses and potential BART portals.

The plan calls for bringing together developers, property owners and community members to coordinate all that growth in dispiriting economic conditions. It also seeks to tap federal urban renewal dollars and to craft a master plan for parking. But mostly, it urges fast-tracking projects that can launch soon.

That focus on urgency is the primary reason the San Pedro Square urban market — sought for land controlled by the McEnery family, landlord Frank Cucuzza and Martin Menne, a nephew of developer Barry Swenson — is at the top of the list.

The city voted in June to contribute $6 million, including a $2.5 million grant for historic preservation work, to the project, pitched as an open-air version of Seattle’s Pike Place or San Francisco’s Ferry Building.

But with the worsening economy, the partners, already spending millions of their own money, said they couldn’t get additional credit through the regular channels. So the city now proposes floating them another $2.5 million as a low-interest loan; city officials previously had planned to spend that sum on street improvements in the area.

Part of the proposal also calls for the conversion of the west side of the Market Street Garage, which faces San Pedro, into retail storefronts. The historic Fallon House and Peralta Adobe also would be woven into the project to bring more visitors.

Already, though, some critics have been grumbling that the money should be spent elsewhere and that McEnery and his partners are trading on his political connections. Councilwoman Nora Campos and Councilman Forrest Williams insisted this summer that an economic analysis accompany the spending request.

And recently, as the city’s deficit has mushroomed, Campos questioned whether the money would be better invested in hiring more police officers.

“There are a lot of questions that have not been answered” about the Peralta plan, she said Tuesday, implying it was meant largely to boost the chances of winning council approval for McEnery’s request.

McEnery, whose nephew John has been assembling the market proposal for three years, dismissed those complaints. He said the project will stand up to scrutiny not because of his family name and political past, but because it will help goose along a slew of other vital projects.

“The dominoes will start to stand up,” Tom McEnery said, “and you’ll see thousands of housing units created. But more importantly, you’ll see a sense of wow and excitement, and people feeling good about a project. That’s rather desperately needed right now.”

Reed, who made economic development the lead priority of his recent proposal for city redevelopment spending, said timing is a priority, especially as projects elsewhere in the city and downtown are slowing or stopping altogether.

The mayor said developers have been champing to open up a part of town where vacant lots and industrial spaces sit side by side with restaurants and upscale bars. “We have to take advantage of every opportunity we get, because things have really slowed down,” he said.