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High-speed rail plans in downtown Fresno cause little stir

David Jordan/Wikipedia

High-speed rail may someday be the salvation of Fresno’s beleaguered downtown. From the look of things so far, though, you wouldn’t know it.

Last month’s designation by the California High-Speed Rail Authority of a station site at Mariposa and G streets has been met with a yawn by the local real estate community.

Land records show few recent transactions. People who work on downtown development say there has been little buzz about the authority’s plans.

“It’s been so controversial; I think people aren’t really certain that it’s going to happen,” said Lupe Perez, a Fresno Redevelopment Agency project manager.

The authority plans to start building the system’s first phase late this year. But a state oversight panel recommended last week that the Legislature withhold $2.7 billion in bond funding, citing the project’s financial risks.

In the meantime, property owners near the station site – a group that includes one of the authority’s board members – can do little except wait.

“Nobody really wants to get too involved until they figure out whether high-speed rail is going to happen or not,” said John Hans, a real estate agent trying to sell the old Del Monte packing house at Tulare and G streets.

For the most part, the vacant lots and decaying buildings around the proposed station site are owned by small businesses and absentee landlords.

A short distance away on the Fulton Mall, investors have swapped 1920s-vintage office buildings like Monopoly pieces for the past two decades. Among those investors is Tom Richards, vice chairman of the authority’s board.

Richards voted last month to approve the station site selection even though companies he controls own five properties within a half-mile of the station site.

One Richards property is less than a quarter-mile away: The long-empty Bank of Italy tower on the Fulton Mall at Tulare Street.

Another company headed by Richards has a contract with the Redevelopment Agency to build three stories of shops and apartments on agency-owned land at Mono and F streets, about three blocks from the station site.

At one time, Richards also held a Redevelopment Agency contract to rehabilitate most of the Chinatown area around the station site. That contract expired in 2010, and its future is unclear. The agency’s continued existence is imperiled because the state Supreme Court last month upheld a 2011 law abolishing such agencies.

Richards maintains that he has steered clear of any conflicts of interest in his actions on the authority board.

“I think with regard to the selection of the station site I have no economic interests in anything in or around the Mariposa station area, so I really didn’t see it as a conflict,” Richards said.

Under the state Political Reform Act, public officials are presumed to have a conflict of interest if they own property within 500 feet of a project site. Beyond that, they are presumed not to have a conflict unless it is “reasonably foreseeable that the decision will have a material financial effect on the real property” that they own.

None of Richards’ properties is within 500 feet of the station site.

Whether his properties would be affected anyway may depend on high-speed rail’s potential for resuscitating downtown Fresno.

City officials strongly support high-speed rail and are not shy about forecasting downtown’s rebirth – if it is actually built.

“What we tell folks is your business plan can’t rely on it, because nobody knows for sure that it’s going to happen, but it’s certainly something to keep in mind,” said Craig Scharton, the city’s director of Downtown and Community Revitalization.

Tours of high-speed rail systems in Japan and Spain helped persuade Steve Geil, president and chief executive officer of the Economic Development Corporation Serving Fresno County, that property values near the station site could rise by 60 percent after service starts here.

“In five or six years, we’re going to have an entirely new downtown,” Geil said.

That timetable may be a tad optimistic even if there are no delays.

Although the current schedule calls for an initial segment to be completed by 2017, only Amtrak trains are expected to use the new tracks at first. Inaugural high-speed service isn’t expected to begin until 2022, and service from the Los Angeles basin to the Bay Area wouldn’t start until 2027.

This spring, the authority plans to approve a final environmental report confirming the station site selection. It is also asking the Legislature for $2.7 billion from a $9 billion bond issue approved by voters in 2008. Another $3.3 billion in federal stimulus funding has been committed, but may be withdrawn if the Legislature does not approve the bond money.

That uncertainty, combined with the project’s long lead time, may explain why Hans, a broker for Fortune Associates, has received few nibbles on the old packing house he has listed for $1.49 million. Its previous owners planned to convert the building into a retail center but gave it up in bankruptcy last year with more than $1.1 million still owed on it.

Hans said the shaky state of the high-speed rail plans may account for the lack of interest. It doesn’t help that the rail line may take out part, or even all, of the packing house, which lies just south of the station site. Plans call for the line to have four tracks at that point so nonstop trains can bypass trains stopped at the station.

“The plans that I see leave a 20-foot strip the length of the block,” Hans said. If those plans take effect, he said, then the property is worthless. On the other hand, if a larger piece remains “it will be great.”

Such is the state of things in downtown Fresno, where property owners and civic leaders await a future that may never come.

Like Scharton, they try to put the best face on it: “I think every step that we take toward high-speed rail is going to lead to more interest and activity downtown.”

The reporter can be reached at rclemings@fresnobee.com or 559-441-6371. This story resulted from a partnership among California news organizations following the state's high-speed rail program, including The Fresno Bee, The Sacramento Bee, California Watch, The Bakersfield Californian, The Orange County Register, the San Francisco Chronicle, The (Riverside) Press-Enterprise, U-T San Diego, KQED, the Merced Sun-Star, The Tribune of San Luis Obispo and The Modesto Bee.


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