SunnyvaleRTC

February 1, 2005

SUBJECT: $1.5 Million Capital Project: Downtown Public Improvement

REPORT IN BRIEF

This report is a review of options for use of a $1,562,000 capital project: Downtown Public Improvements (referred to as $1.5 million in this report). Staff recommends grouping fourteen potential downtown improvements into three priority levels and further recommends that City Council direct staff to use the $1.5 million to complete the Priority 1 improvements (listed below) and to continue to seek outside funding for prioritized projects:

Wayfinding program
Murphy Avenue Enhancements-Planning
Murphy Avenue Enhancements-Phase 1
Block 2 Completion
Block 18 Completion
Reserve for other downtown projects, including matching funds, seed money for PBID (if requested).

BACKGROUND

On October 19, 2004 the City Council held a study session to review the history of the downtown improvement project, possible downtown improvement projects and the likely cost of these projects. Several funding sources for downtown improvements also were presented. The overall purpose of the study session was to give the City Council sufficient background information so that the Council can prioritize improvements and decisions on the use of the Downtown Improvement Project funds.

History of Project Funding

In 2000 the Redevelopment Agency sold property in the downtown to Mozart Development. The land sale proceeds were just over $10 million (per the Disposition and Development Agreement, outlined in RA 00-03). The land sale proceeds were allocated to several different purposes, one of which was approximately $1.5 million to “Revitalization and Improvement in Redevelopment Area.” A portion of this $1.5 million was later used to supplement the budget for the Multi-modal Garage Construction (RTC 01-199). At the hearing on the Multi-modal garage funding in May 2001, Council asked staff to develop a new project to support public improvements in the downtown. During the budget hearings for FY 01-02 (June 19, 2001 – RTC 01-219) the City Council/Redevelopment Agency adopted a new project titled “Downtown Public Improvements” (Project 823490) funded with Redevelopment Funds.

Town Center Mall

In October 2003, the City Council approved the Downtown Specific Plan which outlines a number of public improvements including those required of developers. In August 2004 the Council approved the Forum’s plans for redevelopment of the Town Center Mall area and required improvements around the perimeter and interior of the property (decorative sidewalks, acorn lights, tree grates, etc) and landmark features at certain locations signs at intersections adjacent to the site. In addition, the developer is required to work with the Murphy Avenue property and business owners, and other stakeholders, to assure that the extension of Murphy Avenue and historic Murphy Avenue are complementary.

The Town Center Mall development is working through several legal issues before the improvements can occur. The expected time frame to begin construction is currently Fall 2005.

EXISTING POLICY

Downtown Public Improvements (Project 823490)

For each City Special or Capital Project, a project sheet is created outlining the purpose, need, issues and budget projections. This original project sheet refers to the 1993 Downtown Specific Plan which “addresses the need to distinguish and enhance the Downtown.” The project is described as being needed for enhanced public facilities such as:

Special Sidewalk Paving
Lighting Fixtures
Benches
Landscaping
Landmarks & Gateways
etc.

The project states that the project will determine design features, construction schedule and means to incorporate appropriate features into development projects. The issue that was identified was the timing of improvements so as to ensure continued viability of businesses and minimize disruption of planned development.

Downtown Specific Plan (2003)

Goals/Policies

Establish the Downtown as the cultural, retail, financial and entertainments center of the community, complemented by employment, housing and transit opportunities

B.4. Continue to encourage landscape, streetscape and façade improvements for all streets throughout the downtown.

Promote a balanced street system that serves all users well regardless of their mode of travel.

C.5. Encourage transit areas and multimodal connections such as the train station on Evelyn with the bus transfer facility of Frances and other downtown transit locations

C.6. Provide adequate access to parking in the downtown

Protect and enhance existing neighborhoods

D.2. Provide gateway markers at the entrances to lower-density residential neighborhoods in order to protect neighborhoods from cut-through traffic and commercial parking. Gateways should convey “resident-only” access.

Improve the street character.

E.1. Create a sense of arrival and address through the improvement of major arterials to the downtown in accordance with the proposed streetscape designs.

E.2. Improve the quality of key vehicular and pedestrian linkages that function as important feeders into the downtown, such as Sunnyvale, Washington and Iowa Avenues.

Heritage Preservation Sub-Element

Action Statement 6.3A.6c: Revise and republish the Murphy Avenue Design Guidelines every ten years, or as needed.

Policy 6.3B.1 Preserve existing landmarks and cultural resources and their environmental settings

Action Statement 6.3B.1a: Continue to monitor and review development on Murphy Avenue, to preserve its heritage resources and encourage the maintenance of an environment that attracts both visitors and local residents, thereby encouraging Murphy Avenue’s ongoing commercial vitality.

DISCUSSION

Possible Downtown Projects

The following list includes projects presented to the City Council at the study session and those items suggested by the Council for inclusion on the list. Each of these projects is described in more detail in Attachment A, including: project overview, recommended priority, status of funding (if applicable), capital cost, and operating cost. Since the study session staff has broken some of the projects into phases and updated the estimated costs. Note that all costs are preliminary and are based on general ideas rather than conceptual plans.

1. Way-finding Signage Program

2. Murphy Avenue Enhancements

3. Block 2 Completion

4. Block 18 Completion

5. Property Business Owners Improvement District (PBID).

6. Four Gateways/Landmarks

7. Eight Neighborhood Entry Features

8. Tivoli Lights on Murphy Avenue

9. Façade Improvements

10. Frances Street Parking Lot

11. Plaza- Phase II

12. Public Parking

13. Wireless service

14. Outdoor Cinema

Funded Projects. The Frances Street Transit Station project was on the list in October, but does not appear to need additional funds.

Streetscape Standards

This report refers to the Streetscape Standards for Downtown. These are the features within the sidewalk area that are unique to the downtown and include the following elements. Some areas of the downtown (e.g. sidewalks, tree grates and lighting fixtures around Mozart buildings, Plaza del Sol and the Multi-modal transit center) have already been built to these standards. In addition Plaza del Sol includes many of specialty amenities such as benches, bollards and bike racks. Examples of the streetscape elements are in Attachment C.

Sidewalks with gray pavers
Black Acorn style Lamp posts
Black Metal Benches
Black Metal Bollards
Black Metal Trash receptacles
Black Metal Bicycle Racks
Wrought iron Tree Grates

Funding Sources

In addition to the subject $1.5 million Redevelopment Fund project (“Downtown Public Improvements”) other sources of funding may be available for downtown improvements. Staff recently submitted Transportation for Livable Communities (TLC) capital grant applications for Plaza Phase II and the Way-finding Program. Neither of these projects received funding this cycle. A planning grant for the Neighborhood markers was also not approved this cycle; however, a $75,000 TLC planning grant was approved for Murphy Avenue Streetscape enhancements (for a comprehensive outreach, planning, and conceptual design effort).

Staff has, and will continue to look for funding opportunities to use in the downtown. Possible revenue sources include:

Grants and Other Funding Sources:

Transportation Fund for Clean Air (TFCA)
Federal Transit Administration (FTA)
Transportation for Livable Communities (TLC) Planning
TLC Capital

Developer Requirements: the majority of the streetscape features will be completed through developer requirements to upgrade to the new downtown standard. Other features, such as neighborhood gateway markers may be required as mitigation or general contribution to the upgrade in downtown, provided there is a nexus.

Park Dedication In-lieu Fees: Residential developments in the city are required to pay a park dedication in-lieu fee for each new housing unit. The only potential project listed in this report that could use park fees would be Phase II of Plaza del Sol; in fact, a large percentage (about 68%) of the Plaza del Sol Phase I construction budget was funded with park dedication fees. As the Plaza is a community resource and not a neighborhood resource, fees that were collected from throughout the city contributed to the plaza budget. Park dedication fees can only be used for acquisition or improvement of park property; they cannot be used for operations. The current balance, including fees paid, rentals and interest is approximately $2.2 million of which about $668,000 has been designated for park related projects leaving a balance of about $1.5 million. Based on current residential development activity, staff estimates revenue could be as much of about $3-4 million in park dedication in-lieu fees over the next 2 years. These funds are to be used in developing and upgrading park facilities throughout the city and are not for exclusive use in the downtown. Prioritization for use of park dedication in-lieu fees will be addressed in the Open Space and Recreation Sub-Element, currently being updated.

CDBG: The City receives CDBG entitlements to assist low income households. Some cities will use their CDBG funds to assist in commercial area façade upgrades when the beneficiaries of the improvements (e.g. construction workers or future employees) meet the income qualifications. A street façade grant program is possible with CDBG funds if appropriate programs are developed and approved by the Department of Housing and Urban Development (HUD).

Other City/Redevelopment Funds: If Council directs other general funds or redevelopment funds can be used for public improvements in the downtown. Currently, few funds, other than the subject $1.5 million, are available.

City Council Study Session

At the October 19, 2004 study session the City Council expressed strong interest in a few of the listed improvements. Streetscape enhancements including completion of Block 2 and upgrades to Murphy Avenue were mentioned frequently. Council added “Murphy Avenue Tree Lights” and “Seed money for PBID” to the list of possible improvements.

As there are more projects than funds available some method to prioritize items is needed. At the study session, staff presented a number of objectives that Council could use to assist in prioritizing the improvements. A revised set of objectives is listed below, along with suggested examples of projects meeting that objective. The complete matrix of objectives and projects is Attachment E.

Streetscape/Urban Design: Contributes to upgrading or completing streetscape elements in key areas.

e.g. Murphy Avenue, Block 2 and 18 completion

Neighborhood Identification: Assists in distinguishing neighborhoods

e.g. Neighborhood Markers, Gateways, Landmarks

Business Success: Contributes to the success of downtown businesses

e.g. PBID, Block 2 completion, Wayfinding System

Community-wide Benefit: General community wide benefit

e.g. Plaza del Sol-Phase II

Cost/Leverage of other funds

e.g. Murphy Avenue Enhancements (TLC grant), PBID seed money

Long term fiscal costs vs. benefits: Project would potentially require significant operating funds or could add to city tax base

e.g. Costs: Plaza del Sol-Phase II, Public Parking

e.g. Benefits: a project intended to benefit businesses and contribute to their success such as PBID or Murphy Avenue Streetscape

FISCAL IMPACT

The capital project (Downtown Public Improvements) has $1,562,000 available. Total cost for all identified improvements range from $6.2 to $8.0 million. Costs per improvement range from: $25,000 to $2,500,000.

Operating costs per improvement range from: minimal additional cost to $70,000 per year.

For grant funding there is typically a city match required. This match can run from 10-50%. Even on an expensive project with a high match requirement this leverage of funds is extremely helpful in stretching the city’s dollars.

Intangible fiscal benefits can be anticipated from some of the projects. Improvements that bring attention to and/or increase the attractiveness of the downtown are expected to increase the number of patrons, thus benefiting businesses and the city tax base. The prior investment of about $1.5 million on Murphy Avenue is thought to have provided the catalyst that resulted in reinvestment of the properties the mark the success of this historic commercial district.

Conclusion

The wish list for downtown projects is very long but funding is limited. It appears an important step to prioritize projects so that funding can be pursued and so that as funding is available new projects can be taken on. Many of the downtown improvements will be handled through developer requirements, particularly upgrades to the infrastructure and streetscape. City owned properties and the sites that are not likely to redevelop in the next 10-15 years are candidates for streetscape enhancements.

The projects that have been identified in this report (that would not be paid for through developer contributions) could have a total cost of $8 million. Staff will continue to pursue grants for both planning/community outreach and capital improvements, but these are not guaranteed. The most likely projects to receive a capital grant are Murphy Avenue and Block 2 enhancements due to the TLC Planning Grant that has already been approved.

Another fiscal issue to keep in mind is the increase in operating costs for certain improvements. Public parking and Phase II of the plaza have significant operating costs identified; other projects may be individually small, but could cumulatively add up.

PUBLIC CONTACT

Public contact was made through the posting of the Council agenda on the City’s official notice bulletin board, posting the agenda and report on the City’s website, publication of the City Council Agenda in the San Jose Mercury News and the availability of this agenda and report in the Public Library.

Several members of the public attended the study session and the Downtown Association has been informed of the issue.

Planning Commission, Heritage Preservation Commission and Parks and Recreation Commission have expressed interest in the downtown area. No formal recommendation was obtained from any of these three commissions to identify projects or recommend priorities for this report. Specific projects could involve these Commissions, as appropriate, in reviewing concepts. For example, the Heritage Preservation Commission would have a role with the Murphy Avenue Enhancements through the pending study on Visual Streetscape Standards for Murphy Avenue. The Parks and Recreation Commission would review Phase II for Plaza del Sol.

ALTERNATIVES

1. Adopt the priorities as shown in Attachment B for the downtown improvements.

2. Select Priority 1 improvements (Attachment B) to be implemented with the Downtown Improvements capital project:

Priority 1 Improvements

Cost

Grants

City Costs

Wayfinding within Downtown

$300,000

$0

$300,000

Wayfinding to the Downtown

$100,000

$0

$100,000

Murphy Ave

Planning

$90,000

$75,000

$15,000

Enhancements Phase 1

$260,000

$0

$260,000

Block 2 Completion

$695,000

Reserve for other downtown projects, including matching funds, seed money for PBID (if requested).

$15,000

to

$192,000

$0

$192,000

TOTAL

$1,562,000

3. Direct staff to seek grants and other outside funding to complete projects on the prioritized list, and move those projects into Priority 1, if outside funding is obtained.

4. Adopt different priorities than Attachment B to determine the use of the capital project.

5. Direct staff to return with additional items or information to consider for the capital improvement project.

RECOMMENDATION

Alternatives 1, 2 and 3: adopt the priorities in Attachment B, direct staff to pursue Priority 1 projects with the $1.5 million capital project budget and to continue to seek outside funding for the downtown.

Priority 1: Projects with demonstrated community support and strong benefit to the downtown as a destination (and within the $1.5 million available funds)

Staff recommends that the $1.5 million Downtown Improvement Project be used to maximize the benefits to entire downtown. As such, the recommended Priority 1 is intended to include improvements that identify the downtown (e.g. the Wayfinding Program), improvements that complete the improvement efforts in the historic downtown (completion of Block 2). In addition, to assure that Historic Murphy Avenue continues to serve as a focal point of the downtown, staff recommends additional investments to keep the streetscape features attractive and functional. Staff is also recommending that Priority 1 improvements include a contingency of $192,000 for unidentified projects.

Priority 2: Projects important to the success of businesses and residents’ quality of life, but not as time critical as Priority 1.

Priority 2 projects are considered by staff the next layer of enhancement and protection in the downtown neighborhood. Based on possible timing of private investments, these projects would serve to further identify the downtown as a destination and identify and protect residential areas.

Priority 3: Projects with significant capital requirements, or projects with minimal perceived community interest.

These projects may be highly desirable but are either expensive (e.g. Phase II of the Plaza) or so conceptual that costs cannot be easily estimated.

Prepared by:

Trudi Ryan

Planning Officer

Reviewed by:

Robert Paternoster

Director Community Development

Approved by:

Amy Chan

City Manager

Attachments