Rebuttal to Merlone Geier Partners' Budget Report

The letter below was sent to the City after the Petaluma Neighborhood Association’s members evaluated the accuracy of Merlone Geir Partners consultant’s Budget Impact Study.
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Dear Planning Commissioners, Council Members & City Manager,

On February 10th, 2010 you received a letter from Greg Geertsen of Merlone Geier Partners attached to an “economic study” that was presented to the Petaluma Area Chamber of Commerce. This purported study is entitled, Budgetary Impacts of New Retail Projects (Deer Creek Village and East Washington Place Shopping Centers).

Geertsen’s letter, along with the aforementioned document drafted by Navigant Consulting, conveyed erroneous information in an attempt to draw support for two poorly designed large retail projects in Petaluma.

The Petaluma Neighborhood Association and its research team have read and conducted a full analysis of the Navigant study and have determined the document to be inconclusive and specious in its findings. In more instances then we can count, the report incongruously draws parallels between random bits of information. This is a deceitful attempt to justify and push through approvals of two proposals that do not comply with Petaluma’s General Plan. The fact that this report was commissioned and presented by the proponent of one of the two projects, and is offered as an “objective” report of some benefit to the city, is preposterous on the face of it.

Would the city be better off with Deer Creek Plaza and East Washington Place?

There is no evidence provided by the Navigant report that the City of Petaluma would be better off financially or commercially with either of these two projects in place.

By using the period 2003-07, which predates the global recession, as a benchmark for its findings, there is absolutely no relevance to the claims made by Mr. Geertsen that either of these two retail projects, if approved at an earlier time, would curtail the city’s financial crisis or aid in the city’s ability to rebound from the economic downturn. His theories are purely speculative.

Conversely, we may even draw a contrary determination when the circumstances and the financial burdens of both projects are analyzed more thoughtfully. Petaluma’s financial crisis would not be lessened by the approval of either of these two projects, and in fact could easily be further impacted when the added burdens on our infrastructure are counted over time, as it is local taxpayers who ultimately pay for them.

The city’s financial problems were brought on by a number of serious economic issues that the Navigant report never bothered to address. Like most every other city in California today, the downturn of the economy culminated in a situation which caused our city’s expenditures to outpace its revenues. These macro-economic factors so far outweigh the purported benefits claimed by this report that they pale into insignificance when compared to these larger factors.

What is the True Intent of Navigant’s Report?

In the executive summary of the report and in several other locations, it states that the nature of their analysis is “independent and objective”. A further investigation into the business practices of the Navigant Consulting firm instead reveals a clear bias motivating their methodology.

According to their website, Navigant specializes in “Construction Consulting Services.” They are so-called experts in the field of “Schedule and Delay/Acceleration Analysis.” They have little experience in the field of retail economics or municipal fiscal policies. The report they prepared clearly reflects their lack of knowledge of the subject and demonstrates how nonobjective they truly are with regards to both of these two retail projects being proposed in our city. This is a classic example of the piper calling the tune, where Merlone Geier Partners went out and hired a consultant to report back with the results they wanted, and should only be given the consideration that such a commercial effort deserves.

How are other cities faring with Target and Lowe’s?

The Navigant study attempts to justify the building of both Petaluma big-box projects by drawing comparisons which are focused on Lowe’s and Target stores that were opened in 17 Northern California cities from 2003 to 2007. Again, for their comparative analysis, the preparers of this report utilized data through the end of 2007 only. As a result of gathering only pre-recession data, excluding pertinent information in the following years, and ignoring the larger economic context, the report falls short of providing a true economic analysis of any budgetary burdens big-box projects such as these have had on the cities included in their report. Given this extremely skewed starting point, their conclusions of benefits are equally suspect.

However, our research team wanted to test their premise that these kinds of projects are beneficial to the cities where they are built. We analyzed the cities Navigant listed and put together a chart on the following page that lists all 17 cities and the current state of their municipal budgets, as well as actions that they have been force to take to adjust to recent conditions. The information provided clearly shows that the majority of these Northern California cities are in just as much a financial crisis as Petaluma, in some cities the situation is even more severe. Cities such as Fremont, Stockton, Hayward, and Manteca have allowed over expansion that has led to excessive burdens on city services and infrastructure. These communities paid little regard to sustainable planning practices and continued to approve large big-box projects such as Target and Lowe’s, which led in part to a substantial drain of their city resources. The impacts of such practices have crippled their ability to stabilize their budgets.

Subject Cities’ Deficits & Fiscal Impacts
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Antioch: -$3 Million City Hall, laid off 24 employees in
2009, implemented furloughs and
trimmed expenses by $11 million

Cotati: -$700,000, Cotati voters to approve a 5-year
general transactions and use tax of
one half cent.

Dublin: -$1.5 Million, unavail.

Fremont: -$5.7 Million, City workers furloughs and layoffs

Gilroy: -$2.7 Million, Police Union led effort to recall
Mayor- Eliminated 71 F/T positionsclosed
city museum

Jackson: -$900,000, City employees asked to take concessions.

Lincoln: -$2 Million, Laid off 25 city workers, including 5
police officers. Created citizens advisory
task force to analyze longterm solution

Stockton: -$31 Million, Layoffs, service reductions citywide.

Lodi: -$1.46 Million, unavail.

Yuba City: -$2 Million, Will lay off 16 employees and eliminate
40 positions total.

Albany: -$216,514, Unavail.

Hayward: -$14 Million, Seeking cost cutting measures,
deficit estimated to reach $19 Million
by the end of the year.

Napa: -$3,269, unavail.

Morgan Hill: -$1.7 Million, Eliminated 16 positions

Manteca: -$4.3 Million, Hiring Freeze, furloughs, and outsourcing.

Contradictory Findings

In the “major findings” section of Mr. Geertsen’s cover letter, he sites a rapid drop of Petaluma’s General Fund revenues “of 34.6% since 2007” but then goes on to cite taxable retail sales levels from between 2003-2007. Mr. Geertsen then proceeds to juxtapose the pre-recessionary taxable retail sales data to Petaluma’s current post-recession budgetary data. By drawing upon data from two incongruent time periods, one from before the recession, the other from just after the economic downturn, he has created a blatant contradiction that is difficult to take seriously. Rational conclusions cannot be drawn from such methods.

Furthermore, the estimate of $1.7 million in annual revenue for both projects is a highly optimistic overestimate of revenue generation, which is based upon inconclusive data from the flawed Fiscal and Economic Impact Assessment reports done for the city. Both FEIAs used primarily pre-recession data to establish a base line for their findings, made general unsubstantiated assumptions about employment income levels, types of jobs created, and impacts on existing businesses and therefore the sales taxes lost, just to name a few shortcomings. The current decline in Consumer Price Indexes along with cumulative retail redundancies were not factored into to the retail sales tax (RST) estimates for either project. They were found completely inadequate by the City Council in providing usable information.

The FEIA prepared for Regency Center’s East Washington Place neglected to factor in the shortfall of revenues through secondary market consumers. Retailers rely heavily on the revenues generated by secondary markets of any given trade area, that is, those who travel from outside a town or city to take advantage of available shopping destinations. A Target store located in Petaluma with existing Target stores in Novato, Rohnert Park, and Napa, would therefore not reap the benefit of drawing from a secondary market, because one does not exist.

Most of the estimated revenue data provided in the FEIA for the East Washington Place proposal was taken from Target stores in cities that had the benefit of a secondary market draw where portion of consumer-spending comes from outside. With Lowe’s stores in Cotati and San Rafael, there will be a limited secondary market here as well.

As Petaluma will not have a true secondary market for either project, the retail sales tax revenue figures that the study cites is grossly exaggerated and needs further examination before his conclusions can be accepted as real.

Is Petaluma Over-Retailed?

Presently, Petaluma has nine major shopping centers that are built to similar specifications to both proposed projects, Deer Creek Plaza and East Washington Place. These existing shopping centers are typical auto-centric projects with limited pedestrian/bike amenities and virtually no connectivity to the neighborhoods or the community surrounding them. Petaluma’s various shopping centers range from older 70’s- 80’s bunker styled buildings to the recently built Redwood Gateway Center (Kohl’s plaza). All are of the same conceptual design with very low-density layouts, large expanses of parking, and pedestrian-unfriendly spaces that hinder pedestrian activity and connectivity. Over the years, these poorly planned projects have resulted in street infrastructure that has been unable to keep pace with the traffic conditions they have generated. With retail vacancies in almost all of these nine existing centers, there is a clear indication that Petaluma’s existing retail outlets, for a multitude of reasons, are not living up to their revenue potential.

Conclusion

Clearly this report is a self-serving attempt to sway those who either don’t care to exercise critical thinking, be bothered by facts, or have a political ax to grind. Anecdotally, one doesn’t have to look too far to see what these kinds of development projects do to a city. Rohnert Park and Santa Rosa both have long treated them favorably, and today are in worse economic shape than Petaluma. Furthermore, this kind of pay-for-results consulting should be treated warily, with such biased results destroying any credibility such consultants may have at one time had. Crass self-serving commercialism such as this report embodies taints the public discourse, and reflects most clearly on its authors and patrons.

We trust that you will recognize the inconclusiveness of their report and advocate for sustainable planning practices, well designed, pedestrian oriented mixed-use projects that comply with Petaluma’s General Plan.

Regency – Their Words vs. Their Actions

Published in the Argus Courier Jan. 28th, 2010

Petaluma is at a crossroads, with the controversial Target big-box project being touted by some as the salvation of the city’s future, and others as an albatross not worthy of our community.

The project developer, Regency Centers, states on their website that “Regency?…works closely with local governments and community associations” and “adheres to the standards of the community and neighborhoods.”

Unfortunately, they’re not living up to their own high-minded principles. Regency has resisted all efforts by local residents and community groups to address serious shortcomings in the project, and instead choosing to try to coerce our City Council with their recent lawsuit (for alleged “stalls and delays”) into ramming this project through without full public review.

Beginning with forged “citizen” letters to this newspaper, then by withholding pertinent information about the project and now with their suit, they’re trying to distract attention from the significant unmitigated impacts of their poorly designed project, and bully Petaluma into accepting it.

This is not the corporate citizen they want you to believe they are. Rather than working closely with community associations, Regency acts like the public has no right to express concerns over a massive project situated in the geographic center of our city. Huge traffic, air, noise and other impacts deserve a full review by the Council and the concerned public for all to weigh the pros and cons for themselves. Will the sales taxes Regency claims the project will earn materialize? Will it make East Washington so congested that it’ll be easier to drive to Novato or Rohnert Park’s Target? Now is the time to give this a full review.

There’s been little attempt made by their design team to meet the unique standards of our community, which are clearly spelled out in our General Plan. Did their architects and designers even bother to read our General Plan? It clearly states what our vision is and what we as a community are trying to achieve. The most significant impacts determined by the proposal’s EIR cannot be ignored and are in direct conflict with many of the GP goals. These conflicting points include – but are not limited to – the project exceeding the level of development anticipated in the regional clean air plan, generating new air pollution that would affect long-term air quality, additional traffic (over 15,000 new car trips per day) that would result in unacceptable levels of service at many intersections and significant traffic impacts along Highway 101. Furthermore, the GP calls for mixed-use development here, something that is not achieved by the less than 4% non-retail uses Regency has reluctantly included.

Meanwhile, a faction of our very own community – special interests having only their own self centered motives behind their actions – have politicized any community input that isn’t adoring of Target. Our organization is not expressly concerned with the politics of the project. Rather we seek to determine the best possible outcome for our neighborhoods and the health of our community through the public review process. As a group we feel the presently seated council reflects the voters’ expectations as expressed in the last general election. As an individual, I want my council members to exercise due diligence in reviewing the biggest development project in Petaluma. They have served us well amidst troubling economic times and should be allowed to do their jobs.

Regency’s frustrations could have been avoided if they had been willing to adhere to their own credo and honestly work with our community to meet our standards. They were asked to do better, they could’ve done better, and they’ve done better in other cities, but chose not to do so here. By their lawsuit, it is they who have delayed action on the project. Their unwillingness to work with us has come full circle and has produced nothing.

By Paul Francis

Breaking Petaluma…

Yet again Regency Centers has proven to the residents of Petaluma that there are no limits to how low they are willing to stoop to get their poorly designed project built. Early on in this process they submitted forged letters to the Argus Courier now, they are following up with their threats and a lawsuit filed against the city.

Retail development has changed drastically over the years. Regency Centers’ proposal has not met with those changes. Consequently, they have been unwilling to produce a good product here in Petaluma. Now, they are blaming the “planning process” and our “city council” for their ineptitude.

If Regency Centers seek approval and accolades for their project here in Petaluma they should design a project that complies with the mixed use zoning and with the General Plan. Instead they’ve chosen to obstruct the planning and development process and place the blame elsewhere.

Framework for Future Retail Development:

Every city has its own topography and ambiance and there are rules of thumb to keep in mind when reviving neighborhoods and approving projects here in Petaluma.

REIN IN THE AUTOMOBILE: For 50 years we completely obsessed with making room for cars. We need to show respect for people who are moving about on foot or by bicycle.

ACCENTUATE THE POSITIVE: Celebrate the things that give our city its special characteristics- views of hills or water, historic buildings. If it’s nice for the locals then visitors will love to come here also.

EMPHASIZE THE OUT-OF-DOORS: We do almost all of our work indoors; we need to move in our leisure time. People want to walk, run, bicycle- or sit and enjoy the setting, have a cappuccino.

DESIGN FOR ALL AGES: Various groups in the population have various needs. For instance, fold active playgrounds into a site plan and position them where parents can relax with a glass of wine while children let off steam.

(Excerpted from “Life Between Buildings” by Jan Gehl)

Letter to Petaluma's Transit Advisory Committee:

Dear Transit Advisory Committee Members,

It has been brought to my attention that during a recent Transit Advisory Committee meeting (TAC) you have been asked to make comments and vet your concerns regarding Regency Center’s East Washington Place retail development proposal at the Kenilworth site and its DEIR.

For the record the September 3rd 2009 TAC meeting in reference was not notified to the list of interested parties held by the Petaluma planning department and project planner. Nor, was any attempt made to notify the public at large about the fore mentioned meeting.

At this time, please accept the following comments with my points of concern regarding the EWP/EIR and the proposed development at the Kenilworth site.

Unfortunately, the proposed retail project’s EIR does not adequately address potential negative impacts on transit in our city. Nor does it provide reasonable alternatives to its project to adequately comply with Petaluma’s General Plan objectives for development in this area.

The project site is situated just five blocks from our new transit plaza and the Petaluma SMART rail station. Yet, there is no effort to implement Transit Oriented Design (TOD) elements into the site plan. Why not?

Our GP clearly stipulates (Chapter 5-Mobility):

“Ensure that land use decisions and public
improvements enhance the viability of the
Northwestern Pacific Railroad (SMART)
corridor for use as a multi-modal mobility
corridor.”

Under “Related Planning Efforts” CPSP (page 5-3GP):

” The Central Petaluma Specific Plan
directs growth into the City’s historic core. A key
element of the Plan provides that locating new growth in
the geographic heart of the City (adjacent to downtown
and a rail corridor with future transit potential and
served by the City’s key cross-town connectors) to allow
future development to occur with reduced reliance on
motor vehicles and an increased emphasis on pedestrian,
bicycle and transit circulation.”

GOAL 2-G-4: Washington Corridor (page 2-9):

D. Ensure that development at the old
Kenilworth Jr. High school site and any future
redevelopment of the Fairgrounds property
maintains a public, pedestrian, and active face
along East Washington Street, and provides
civic and ceremonial spaces with links to the
Library and other uses.

Taking the above GP objectives into consideration shouldn’t we try to achieve the “Transit Oriented Design” potential for this site, given its close proximity to our transit hub? Shouldn’t we also consider including this site in the CPSP?

In March of 2009, Matthew Welbes the deputy administrator for the Federal Transit Administration said, “As we go forward in our country, we want to be sure that we make investments not only in transportation but, in the way we develop our land and we build our housing and our businesses so we can create choices for people, so that they can choose to travel by transit to get to school, to reach work, to visit the doctor or even to design communities so that there are trips that are not taken, so that in order to get that loaf of bread or to get a hair cut, a person can walk to some place near by. And so if we create urban forum that is less auto oriented, more supportive of transit and walking, we create places where in the future our investments will support lower emissions and fewer green house gases.”

This past summer, congress passed a $500 billion bill to fund Transportation and Infrastructure. The bill would also put big money toward transit, trains, bike paths and walkways.

The project site falls within Petaluma’s redevelopment district and is also directly adjacent to our designated community use area. This makes the surrounding city owned areas eligible for redevelopment funding. Should we not consider future investments to improve infrastructure and transit amenities in the vicinity?

Regency Center’s proposal being purely an auto-centric design; how does this fit in with future planning and transit in and around that area?

Consider the commitment that other bay area communities have made toward TOD’s, the objectives of our own GP, and the potential for future redevelopment funding/investments in our city.

As committee members with the community’s vested interest in mind, I respectfully request that your comments elaborate and reflect upon these concerns and shortfalls of the proposed project and find that the EIR has not fulfilled its requirements, to adequately address impacts on our city’s transit system or to fulfill future transit objectives within the scope of General Plan compliance.

East Washington Place EIR Analysis/General Plan Non-Compliance issues:

The following excerpts from our General Plan clearly stipulate what the objectives will be, not only for retail development at the Kenilworth site but, also the surrounding areas and the East Washington corridor. It provides a vision for how retail development should be integrated along the Washington Street corridor, referring to East Washington Street as “a entry gateway into Petaluma, and to create distinctive features at this point.”

The EWP/EIR fails to address the following land use objectives of our General Plan:

Chapter 1 of the General Plan reads as follows:

GOAL 1-G-1: Land Use (page 1-14)

Maintain a balanced land use program that meets
the long-term residential, employment, retail,
institutional, education, recreation, and open space
needs of the community.

Comment: Because there is no specific list of retail tenants aside from the possible anchor tenant, the project’s EIR does not comply with this GP objective to “meet the long term retail needs of our community”. The EIR is fictitious and inconclusive in this area.

A. Develop incentives in the Development Code
to encourage lot consolidation to enable
efficient multi-story buildings, and relocation of
driveways to side streets.

Comment: The project proposal makes no effort to achieve this objective. By proposing mostly inefficient large single story structures on a subdivided lot, it misses the point entirely.

1-P-6 Encourage mixed-use development, which
include opportunities for increased transit
access.

Comment: The project site is situated just five blocks from our new transit plaza and the Petaluma SMART rail station. Yet, there is no effort to implement Transit Oriented Design (TOD) elements into the site plan. Also see my TAC comments.

1-P-7 Encourage flexibility in building form and in the
nature of activities to allow for innovation and
the ability to change over time.

Comment: The proposed “building form” solely meets the minimum standards of the developer and is essentially a mono- use/mono-form design. The project EIR does not address the “flexibility of building form” therefore does not adequately provide alternatives for future innovation of the buildings.

1-P-27 Encourage innovative site and building design
to address parking solutions such as shared,
structured, and/or underground facilities.

Comment: The project proposal and the EIR both fail to address this objective in our GP. The project layout consists of a large 16.5acre patch of asphalt as the only option for providing parking at the site. The EIR does not adequately address this as a negative impact, provides no alternatives to meet the GP objective.

The EWP/EIR fails to address the following Community Design, Character, and sustainable building objectives of our General Plan:

Chapter 2 of the General Plan reads as follows:

Strong entries are another important element of community design, as
their character creates the image Petaluma presents upon
arrival.

Comment: The term “strong entries” is certainly open to interpretation. But, I think we can all agree that the backside of a large bunker style structure would do nothing to achieve this particular GP objective and would not enhance the character of Petaluma.

2-P-5 Strengthen the visual and aesthetic character of
major arterial corridors.

2-P-22 Encourage development with active ground level
uses, plazas and open spaces, while allowing
residential and commercial uses at upper floors.

2-P-23 Facilitate development patterns that provide
an urban edge along East Washington Street,
providing visual continuity and cohesiveness,
and increased safety.

2-P-23(D) Ensure that development at the old
Kenilworth Jr. High school site and any future
redevelopment of the Fairgrounds property
maintains a public, pedestrian, and active face
along East Washington Street, and provides
civic and ceremonial spaces with links to the
Library and other uses.

Comment: Sections 2-P-5, 2-P-22, 2-P-23, 2-P-23(D) of our GP provides us with a framework of how development should proceed at the Kenilworth site and the surrounding area. The EWP/EIR also quotes these policies from our GP. Why then, does the project proposal seemingly ignore these policies? Why does the project’s EIR reference these policies and yet it makes no attempt to address these critical viewpoints, nor the negative impacts relevant to a project design that is non-compliant?<

The Most Important Thing YOU Can Do for Petaluma!!

A City Council meeting is tentatively set for February 8th, 2010 – please attend one of the most important meetings concerning the future of our community here in Petaluma. The Petaluma City Council will be considering the EIR and site design of Regency’s giant 400K sq. ft. shopping center at the Kenilworth site. The PCC will be reviewing this project’s EIR along with vetting concerns from the community.

This is NOT a discussion about Target. Or, where to shop. This is about proper planning and the future of our great community here in Petaluma.

Please attend and give our council the support they need to reject this EIR!

Please consider that the project, as it presently stands, does not comply with the objectives specifically laid out by our General Plan. See Chapter 2 Community Design, Character, and Green Building for a further perspective. (Link: http://cityofpetaluma.net/cdd/pdf/gp/ch2.pdf)

Some other EIR inadequacies to consider:

1) The impact analysis is incomplete relative to aesthetics, air quality, water resources, transportation, public services, utilities, and land use.

2)The DEIR uses an inconsistent definition of cumulative buildout scenario, which cripples the ability to accurately ID the cumulative impacts, as well as provide and objective comparison of
alternatives.

3) The EIR does not provide substantial evidence to support a number of its assumptions and conclusions, including citing documents not included in the DEIR, incomplete citations to City documents, and relying on documents that are now discredited, superseded or that are too old to
provide accurate information.

4) The EIR relies on documents that are not in the public record, which disqualifies them from use under CEQA.

5)The EIR fails to provide any project level impact analysis in several categories, instead simply offering up a cumulative analysis only.

6) The EIR relies on improper project segmentation, by severing the analysis from key surrounding uses and actions, such as installation of a new groundwater well, limiting pedestrian and vehicle flow from the project to only the Project site (excluding the Library and park-and-ride facility as required by the General Plan), the relocation of Little League facilities, etc.

7)The EIR has inconsistent assumptions regarding traffic flow between the Transportation section and the Population/Housing/Blight section, as well as the timing of infrastructure improvements. This then compromises the conclusions of the Air Quality analysis.

8) The EIR uses a changing and incorrect baseline for the Project Setting. CEQA requires the setting to be based upon the circumstances at the time of release of the Notice of Preparation for the EIR. In several cases, the EIR relies on older information.

link to city agenda:http://cityofpetaluma.net/cclerk/pdf/planning/plan-agenda2009nov24.pdf