Back in 1999, when Jim and Tom Copeland first proposed to SLO city leaders the concept of the Chinatown project, they began by asking and answering one simple question.
The question: “What’s in it for the city and its residents?”
Their first written answer: “We propose to: Purchase at appraised market value the city property needed to fulfill the vision.”
Those words were written in a slick informational packet entitled “Unpaving Paradise,” that was presented to city leaders to give them an overview of the plan to build both the Chinatown project and the now-completed Court Street development at the same time.
In the years since, the Chinatown part of the project has gone through myriad revisions and delays. The initial promise, however, still haunts those who feel the city is giving the developer too good a deal for nearly 1.5 acres of city land, which includes more than 140 parking spots and a city building.
On July 1, the SLO City Council, on a 3-2 vote, approved a plan to sell the land to the Copelands for $1.1 million, plus another $2.6 million to replace lost parking. A city-commissioned appraisal by an independent company, however, determined the “fair market value” of the property is $8.8 million.
Staff, based on advice by city economic adviser Allan Kotin, recommended the lower price under a “reuse valuation,” which took into account requirements the city would likely place on the any project that would limit its ultimate value to a buyer.
A Copeland representative did not return calls from the New Times for comment.
“It’s probably not relevant in a legal sense,” local attorney and deal opponent Jim Duenow said of the initial promise to pay appraised market value, “but it’s relevant in the political sense.”
Duenow was at the council meeting and publicly offered $4 million for the land. He said he’d either try to build low-income housing on it or simply sell it back to the Copelands for more.
“If this deal went down in Chicago, giving a developer a deal like this, there’d be a firestorm,” he said. “The news would be all over them. Here, nothing.”
Mayor Dave Romero, who joined Allen Settle and Paul Brown in approving the price, said Duenow’s offer was never seriously considered.
“We aren’t interested in just selling the land,” he said. “We’re interested in a project that will put the land to a higher use.”
He emphasized that city staff believe the Chinatown project could generate more than $1 million per year in various taxes for the city. But Duenow and others who opposed the price at the meeting countered that, between the low sales price and the likely costs of building replacement parking in a ramp. The city could be as much as $10 million in the hole before it starts to collect any sales taxes. (The city has acknowledged the in-lieu fees Copelands are being charged will cover only about half the projected costs.) The project may not be done until 2014.
Moreover, Romero said there’s not necessarily any difference between the promises the Copelands first made to pay “appraised market value,” and the deal to which the city agreed.
“We still came up with an appraisal,” he said. “The real question is in determining a fair market value, because it depends on the appraisal you use.”
In a newspaper commentary, written just after the project was unveiled in 1999, Romero summed up the deal, involving the city parking lots and other properties, saying, “The proposal calls for the city to sell these properties to Copeland (at fair market value) …”
He added that one of the “major issues” to be addressed was “How do appraisers set a fair market value on Morro Street, on the existing city offices, on the existing city parking lots?”
His article was based on the entire swap proposed that allowed Copelands to build the Court Street project and the city to build the building that houses a new parking ramp and public works offices, on Palm Street.
The initial plan varies sharply from recent versions. In the original pitch, Chinatown appeared as a pedestrian-friendly collection of two-and-three story storefronts. In the latest version, the collection of retail, hotel, residential, and office spaces appears tightly massed and reaches a height of 50 feet.
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