To hear some tell it, the proposed Deer Creek Village center in Petaluma would seem to have it all: specialty stores, sales tax revenue and an agreement from local hardware supplier Friedman’s Home Improvement to sign on as an anchor tenant.
Below the surface, however, the Deer Creek project has more holes than a galvanized-steel pipe strap.
In January, the Petaluma Planning Commission rejected the environmental impact report for Deer Creek. Members cited studies showing that adding another shopping center to the east side mall strip at McDowell Boulevard and Rainier Avenue would congeal traffic on roads already clogged by thousands of cars and trucks daily. On Feb. 27, the Petaluma City Council is scheduled to accept or reject the planning commission’s veto of the project. (See full EIR and project plan here.)
Councilmembers Mike Healy and Chris Albertson each say that the burden of gridlock will be offset by the benefit of having a home-improvement store at the massive development. The Lowe’s home-improvement chain recently pulled out of a leasing deal with Deer Creek developer Merlone Geier Partners, although Friedman’s, which operates stores with lumberyards in nearby Santa Rosa and Sonoma, has reportedly signed a lease.
But Friedman’s or no Friedman’s, the retail tenants of the 36-acre lot will create mostly part-time sales jobs with low wages. In addition to traffic jams, an increase in bike, pedestrian and car accidents is also projected. Importantly, the shopping center is projected by city economic studies to create blight by killing retail jobs at other locations; shuttering boutique stores; harming existing hardware and home-improvement stores; and duplicating pharmaceutical stores, office complexes and health clubs serving the outlying area around Deer Creek.
Local businessman Jason Davies is concerned about this type of oversaturation destroying existing businesses. “Why does Petaluma need another shopping center,” he asks, “when the ones we have, especially downtown, are having such a hard time? Are we robbing Peter to pay Paul?”
To assess the impact of Deer Creek, the Bohemian examined thousands of pages of public records and interviewed key players. The findings show that the city does not have the funds, now or in the foreseeable future, to mitigate its damage.
The Myth of Rainier
At the heart of the Deer Creek project is a Rainier-Avenue-to-Petaluma-Boulevard connector. The Deer Creek EIR states that this crosstown street will be operative in the near future, thereby relieving congestion. This falsehood in the report is one of the reasons for its rejection by the planning commission.
For one thing, the California Department of Transportation (Caltrans) is fiercely opposed to the city’s current low-cost engineering plan for the Rainier connector, for safety reasons. But more importantly, the city cannot afford any version of the Rainier connector. The connector was to be paid for with redevelopment funds, and Gov. Brown has abolished California’s network of local redevelopment agencies.
Last March, Caltrans district planning official Lee Taubeneck wrote in a letter to the city, obtained by the Bohemian from a former city employee, that “the Deer Creek EIR and the Petaluma General Plan 2025 EIR are inadequate and must be redrafted and recirculated. . . . With [the] demise of redevelopment agencies and what I also believe to be an unlawful traffic mitigation fee structure projected to fund the Rainer [project] . . . Petaluma cannot use [Rainier] as a feasible traffic mitigation in either document.”
Two months ago, in a separate letter to the city, Caltrans district branch chief Gary Arnold reiterated the agency’s position that the final Deer Creek EIR is not supported by accurate traffic-impact data. The agency also has environmental concerns about flooding.
City manager John Brown says the city has no record of the Taubeneck letter, but he confirmed receipt of Arnold’s letter. Taubeneck and Arnold were contacted for comment, but Caltrans employees are not allowed to talk to the press, Arnold said.
Hole to Nowhere
Last year, the council borrowed $15 million (with interest) in a private transaction with JPMorgan Chase bank, paid for by local property taxes. The unorthodox deal funnels $7 million to engineering design firm URS Corporation to design and construct a tunnel under Highway 101 that might someday be used as a part of a Rainier connector. The contract is for a tunnel, and only a tunnel. In short, the city is charging taxpayers for a hole to nowhere, connecting nothing but idle dreams.
Suzanne Smith, director of the Sonoma County Transportation Authority, explains that the Rainier “hole” cannot be constructed unless Petaluma comes up with $100 million to complete the entire crosstown connector, including a Caltrans-approved design for safely ramping Rainier onto Highway 101.
According to city, county and state officials contacted for this story, Petaluma is not likely to ever find the $100 million needed to construct the Rainier connector safely and properly. Strangely, this bleak reality has not kept Healy, Albertson or Councilmember Mike Harris from acting as if Rainier and Deer Creek are done deals. And at next week’s city council meeting, a fourth vote for Deer Creek could come from councilmember Gabe Kearney, who after his appointment to the council last year provided the lone vote in favor of the project as its representative on the planning commission.
It is a circular truism of city planning that building more shopping centers means the city can extract more traffic-jam-mitigation fees for building more roads to reduce the gridlock caused by building more shopping centers. But the city’s general plan assesses the cost of mitigating traffic caused by all new development through 2025 at $257 million. Currently, the city has a mere $1.7 million available for traffic mitigation.
To generate even $67 million in traffic-impact fees, which is not enough for Rainier, the city would have to permit the development of 4.5 million square feet in commercial, office and industrial development—a 40 percent increase over existing space of that type. It amounts to doubling the downtown area of 225 acres. Since redevelopment has been abolished, any increases in property taxes would go to the state, not the city. And retail sales tax from Deer Creek cannot be used for traffic mitigation, but only for the extra cost of fire, police and city utilities servicing Deer Creek.
Petaluma currently draws sales taxes from 15 other shopping centers and an auto mall, and, says Mayor David Glass, “Our sales tax basis is very healthy.” For his part, Glass questions the wisdom of building another traffic-heavy mall. And without a doubt, the funds for the Rainier connector to Deer Creek simply do not exist—the city doesn’t have the money.
It brings to mind the old Friedman Brothers motto: “If we don’t have it, you don’t need it.”