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August, 2003

Developers Knock Out Marin City Community Programs

By Carol Sterritt


Marin City has a new unique distinction. It would be hard to find another community in which over 89 million dollars has been spent in a decade to "revitalize" a neighborhood, and in which such an effort failed so completely.

Recently, the Marin City Community Land Corporation, the owner of record of the Gateway Shopping Center, went ahead and sold its interest to a new organization, "SmartGrowth." Once again, citizens in Marin City are left wondering about the future.

They have good reason to wonder. Way back in 1985, Big Business interests, under the "guise" of community redevelopment, eagerly set their sights on Marin City. Although claiming "altruism," a close examination shows that altruistic ideals were poorly served. In any case, altruism should not have been that much of a consideration. Marin City had a great deal to offer. Paramount among its offerings was its fabulous location, just seven minutes north of San Francisco, and only a stone's throw from a freeway that goes all the way north to the Alaskan hinterlands. Unlike the rest of the County, you'd find very little anti-development passion in this area. Also unlike some tonier areas, if you wanted to put in a fast food place or two, opposition in Marin City would not keep you out.

Big business was, of course, intelligent in the way that it proceeded. It was clever enough to seek out the partnership of a local entity, the Marin City Community Development Corporation (CDC.) Local residents had put this organization together back in the 1980's for the purpose of creating local affordable housing. Its second mission was to attract industry that might offer local jobs. Headed at that time by Al Fleming, the CDC was already looking into the idea of purchasing a large block of land and perhaps put a hotel or other business structure onto the land. High on their list of land properties to acquire, was the Tamalpais High School site.

However, an entity such as CDC, community-controlled and a small time non-profit, had little chance of coming up with the 10 million dollars that was the school site's asking price. Even arranging for financing would be difficult. But in tandem with a larger interest, it had a going chance.

Likewise, such a clearly for profit, big business concern such as The Martin Group had little chance of winning over resident opposition to big business interests. Not unless it tied into a partnership with the likes of the CDC. So a partnership was born. As the two diverse groups met, a third entity was invited for the ride. That would be the Bridge Housing Corporation, a local development group that has put together projects such as the homes at Hamilton in Novato, also living units in North Beach, and many senior housing centers.

As this partnership began its work together, it created a vision. The partnership would oversee the development of and construction of affordable housing units and a shopping center. Locally, residents were probably more enthused about the housing. Although there had been a burst of home building in the 1970's, the prices of those properties were not in line with what residents could afford. The promise was made that these newly planned units, should they materialize, would have at least some of the housing stock reserved for low income families.

Most local Marin City opposition was centered against the idea of developing the Tamalpais Union High School District site as a shopping center. For many decades, the large field had served the community as a flea market. What is especially surprising is that this modest enterprise netted at least $ 500,000 dollars a year that was distributed directly to the Marin City Community Services District. There, the money was used to subsidize the local senior center, and youth recreation activities. It was a healthy amount of chump change, and the activities that it promoted were valued by this community.

However, as the momentum for developing the shopping center increased, opposition fell away. This was partly because of huge promises that were made. According to local activist Royce McLenore, "Al Fleming ran a core group of members for election to the CDC and to the Community Services District. For at least a six year period, everything that the CDC wanted, the Community Services District was sure to rubberstamp." So although the community was supposed to have a say in the project, it seems that this element was simply bought out.

Also, nowhere in the tons of paperwork and contracts that this project created were any promises backed up with a written and contractual agreement to guarantee the local residents that what was being lost to the community, i.e., the income from the flea market, would in perpetuity be guaranteed by those interests that were now about to shut the flea market down. (This would prove to be a major omission.) Instead the community received a contract in which it was spelled out that it would receive some $ 200,000 a year, but only until the year 1999. After that, it could only look to "possible" payments from rental income, various "tax" mechanisms, and a portion of the profit from the shopping center. Once the 1999 deadline was met, the community began to see the error of entering into any agreement with its own CDC, or The Bridge, or The Martin Group. To date, payments other than the initial $200,000 payments (now defunct) have not materialized.

Further bad news: once the construction of the homes and the retail stores ended, many local jobs ended as well. Although the community was told that at least 50% of the employees at the retail center would be hired from a pool of local job applicants, that has not happened. The current job figure is about 33%. It was also hoped that there would be a way in so locals could develop their own storefronts but the fact is that the rental cost of a store lease is prohibitive. It has been suggested by some studying this venture that the CDC should have been more willing or able to provide locals with the type of lease payment assistance to make this goal possible.

What has materialized are the 340 new homes, townhouses, and rental units, the relocation and remodeling of a local church, the building of the library, expansion of a sports playing field, and a few other amenities. The shopping center offers the community, and the County as a whole, seventeen stores: a Cleaners, a Longs Drug Store, a Best Buy, a Blockbuster Video, Burger King, Cigarettes Cheaper, Coffee Smith, Faces of Marin, Gateway Beauty Salon and Hair Design, Nails # 1, Outback Steakhouse, Pac Bell, Radio Shack, Rickshaw Chinese Food, Ross, and Taco Bell.

Missing from this list is one of the promised items: a grocery store. Initially, there was a grocery, but its poor produce and meat selections alienated the consumers to the point that the huge store was almost always nearly empty. (Best Buy now occupies its space.) Also in terms of the shopping center, what was missing right from the start was some sort of "magnet." A theater, a bowling alley, something that gets the juices flowing and the wallets out. But for whatever reason, neither bowling alley or movie theater were placed into the design mix as the shopping center developed.

Since there is no magnet, several stores have moved out. Togos, a sandwich store, and Red Boy, a pizza parlor, simply could not make a go of it with the little foot traffic that occurs.

However, the new homes, townhomes and rental units have allowed 340 families to live in a setting close to the city of San Francisco, in a neighborhood where the crime rate, due to the new developments, has fallen considerably. But there is a caveat here. I personally watched the construction of those homes and townhomes. They were built during the rainy season, and much of the lumber and plywood that went into those buildings was warped, and wet. None of it looked like anything I saw my former construction bosses approve for their building projects. It was all substandard material. Although the real estate market in the Bay Area is such that some people who purchased units at the time of the grand opening did see an almost immediate 100% profit for their investment, I would suggest that those planning on living a lifetime in their unit may face major repairs probably starting within the next five years.

Of great interest and concern to anyone looking into this project would be all the various financial manipulations that occurred to bring the project to a start. The CDC and The Bridge did a major consolidation of interests. This consolidation brought about an offspring entity to the endeavor: the Marin City Community Land Corporation (MCCLC.) This creation was a jointly owned trust. Here the various manipulations are such that I betcha that accountants from Enron would find their heads spinning. The Martin Group (remember them. They were the clearly Big Business interest mentioned earlier in the deal) went ahead and borrowed enough money to purchase the land for the shopping center and then to donate it to the MCCLC. Then the MCCLC, now as a landowner, went and leased the land back to Martin so as to help Martin avoid penalties on the appraisal. There were other created entities, but explaining it won't change the overall picture. Among these were The Bridge's offshoots BMH Inc. and The Martin Group's offshoots called GAP (no relation to the clothing store) and GRP.

Doing these confabulations of business entity creating allowed The Bridge and The Martin Group to assume loans far above the financing credit limit available to them. Payments made by The Martin Group as Lessee to the MCCLC as lessor are supposed to help the community. Now supposedly, half of the MCCLC's share of net income is used to allow for affordability levels within the project and then the other half of its net income supposedly is used for job training programs and other community services.

Oh, yeah, community services. So I called the Community Services District in Marin City and spoke to one of its workers, a man named Michael Vaughn. My question to him was this one simple query: "So you are not getting any revenues for the past several years from the profits, rents, or "taxes" of the Gateway Shopping Center or the new homes?" His answer was equally simple: "No other money has come to us since the $ 200,000 revenues expired in 1999." He was aware that once upon a time, before CDC, before The Martin Group, and before The Bridge, the Community Service District could count on 75% of its income coming by way of the flea market. He had not heard of any job training programs that were being fostered by the CDC, or The Martin Group, or The Bridge. But he did know that community programs that were doing well during the flea market days were going down.

I imagine that there is a polite way of saying that sometimes the big fish snooker the little fish. In this case, I cannot imagine why the little fish were snookered. Why wasn't the community offered a decent grocery store? Were there various interests such as Safeway's or Mollie Stone's that called on them to make that not happen? Why wasn't a theater put in? Again, were various powerful theater chains in the County able to nix that deal and squash competition before it could start? Why is the Marin Community Foundation so often caught up in deals like this one? And will anything ever turn the plight of Marin City into the ideals that its citizens seek, and that its children dream?

 

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