CA livermore

Mercury News


The stagnant housing market took a toll on downtown Livermore this week, as a developer scrapped ambitious plans for a large-scale mixed use project at the former Lucky's shopping center.

Despite a lack of funding to continue with the project, Anderson Pacific found a willing buyer for the 5.4-acre lot just behind downtown: the city of Livermore.

Anderson Pacific bought the land in 2005, mostly using an $8 million loan from the city. Since then, the developer came up with an award-winning design for a 281-unit model with a community center in addition to retail and office space.

When the housing market crashed — killing the developer's ability to raise money for construction — it looked like the developer would default on the city loan when it came due this week.

Instead, the city agreed Monday to buy Anderson Pacific's remaining interest in the site for $2.1 million.

Anderson Pacific representatives declined to comment on the sale.

Former Councilman John Stein said he would have rather seen the property go into foreclosure.

"They could have just taken over the property and saved $2.1 million," Stein said. "And if they own it, how are they going to find a buyer? The developer couldn't find one, so chances are the city won't, either."

Project manager Eric Uranga said that because there were other parties with vested interests, it was unclear whether the city would be the winning bidder in a
Advertisement
foreclosure.

"The existing project was a good one, and (Anderson Pacific) put a lot of time and effort into making an incredibly nice project," he said. "The city would encourage a project like that to happen at the site, and with someone else there would be no guarantee of what would become of it."

Rob White, Livermore's economic director, said that the city has applied for millions of dollars in state grants related to the site. The grant applications will be decided on next month, and to remain eligible, the city must control the property.

Uranga said several builders who recently contracted the city might be interested in the project.

Under a new builder, the city could explore changing the number of housing units in the project, with units being phased in as needed — 40 to 50 at a time, for example. He said they hope to still make about a third of the units affordable for low and moderate-income tenants.

Uranga added that because of equity remaining in the project and the fact that the developer has already completed costly design and entitlement work, the site is worth more than it was when the process started. He also said the value of the land itself has appreciated since Anderson Pacific bought it for $9 million.

Stein was skeptical.

"That's an amazing thing," Stein said. "It's probably the only place in all of California where the land value has gone up."

The site will remain as is for now, at least until two remaining businesses — the Railroad Cafe and In Between Stitches — find new spots.

"That's very important," said Uranga. "The city is not in the business of hurting downtown stores."

After that, he said the existing buildings could be razed, either by the city or a new developer.

That's something that Rachael Snedecor of Livermore Downtown Inc. said she would like to see.

"The site is definitely past due to move forward," she said. "The cost of empty stores impacts the whole neighborhood. It's just not conducive to having vibrancy downtown."