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Paved in gold: Preliminary estimated costs for Walmart traffic improvements in Atascadero have more than doubled

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Atascadero’s long-trod path to building a Walmart Supercenter in the city has taken an unexpected—and potentially very expensive—turn.

Since the project was approved two years ago, the estimated cost required for traffic improvements necessary to make way for the project has more than doubled.

The city approved the project in 2012 after a few hot years of controversy. That approval included the Walmart site on the southeast corner of the Del Rio Road and El Camino Real intersection and the Annex development that’s mostly on the northeast corner of the intersection, with a small piece on the northwest corner. The conditions for approving what’s been dubbed the Walmart/Annex Project included substantial improvements to mitigate the increased traffic at the intersection and the overpass at the Del Rio Road and Highway 101 interchange. The estimated cost for improvements was somewhere between $4 and $5 million, and the project was approved with a working number at approximately $4.5 million.

The applicants were obligated to pay their “fair share” of the interchange improvement costs. Walmart agreed to pitch in approximately $2.27 million, and the Annex—now owned by Madonna Enterprises—$2.62 million, with Atascadero responsible for some work on the overpass.

While the project was entangled in a lawsuit—in which traffic impact mitigations played a large role—the city directed its consultant The Wallace Group to move forward with drafting plans to submit to Caltrans.

After drafting a more specific improvement plan and applying new regulatory requirements and market costs for construction, The Wallace Group recently gave Atascadero a new preliminary estimated cost of $12 million. Though the real cost won’t be decided until Caltrans approves the project and details any other necessary construction, the estimate has been a bit tough to swallow for city officials.

City Manager Rachelle Rickard brought the issue to the council at its Sept. 23 meeting for discussion and to keep the public in the loop.

“As you know, as we’ve discussed, this is very, very early in the process,” Rickard said at the meeting. “It’s a receive and file, and it’s just to get information out.

“Everything in the report is still subject to change,” she said.

The city may now be forced to get creative with its budget and front millions to pay for the improvements.

While Walmart and the Annex both agreed to pay their “fair share,” a clause says that in the event of a cost overrun, they would each pay only up to an additional $200,000. So even though the preliminary estimates for the interchange improvement have more than doubled, the applicants are only obligated to pay less than 10 percent more than originally planned. That may leave Atascadero on the hook for the difference.

The situation brought a big I-told-you-so moment from members of Save Atascadero, the group formerly known as Oppose Walmart that filed suit against the project.

“Where is the accountability?” asked Lee Perkins. “Each and every one of the citizens in Atascadero will be shouldering some of these costs.”

The city is looking for grant opportunities from the San Luis Obispo Council of Governments (SLOCOG), an agency that oversees and funds infrastructural projects in the county. Because the project could mean a reduction in vehicle miles traveled and the associated reduction in greenhouse gas emissions—based on the working expectation that Atascadero residents won’t be driving to and from Templeton and Paso Robles to shop—the project could benefit from available funding. Mayor Tom O’Malley, who sits on SLOCOG’s board, said that the pitch has thus far been well received at the agency.

Still, all the moving parts and uncertainty over whether or not funding will actually come through the pipeline has some locals feeling uncomfortable.

“When running our city’s affairs, we need to be more careful. We can’t afford this,” said Len Colamarino, a candidate for City Council and a current planning commissioner who cast the lone vote against the project in 2012. “I hear the same kind of wishful thinking that caused this situation.”

The city plans to move forward with putting together the proposals for Caltrans. In the meantime, leaders are hopeful that SLOCOG will come through with grant funding to ameliorate potential costs to the city.

“SLOCOG is a lifesaver,” said Councilmember Roberta Fonzi. “They are throwing us a lifesaver, and it may or may not reach us in time.”

-- Melody DeMeritt - former city council member, Morro Bay

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