What happens to BookSmart property not yet known

Published in the Feb. 19 – March 4, 2014 issue of Morgan Hill Life

By Robert Airoldi
Last month, the Morgan Hill City Council entered into a Memorandum of Understanding with Glenrock Builders to construct a 275-space, multi-level parking garage on a portion of the Sunsweet property located on East Third Street near Depot Street, according to Assistant City Manager Leslie Little. The decision effectively shifts the city’s attention away from the BookSmart site, located a block north on Second Street, as the preferred location for the garage.

While the garage project has shifted, the city’s Successor Agency to the now defunct Redevelopment Agency, and subsequently the agency’s oversight board, still need to determine what to do with the BookSmart property.

The city has already paid $1.75 million to purchase the property and has an option of $2 million that expires April 2016. It has yet to be determined whether the Successor Agency and the city will exercise that option and purchase the site, try to assign the option to a private developer or let the option expire. The MOU expires April 30, 2014.

Now, the agreement with local developer and owner of the property Rocke Garcia means the city will negotiate an agreement to purchase about 32,000 square feet of the Sunsweet property based on an upcoming appraisal.

In the meantime, what happens with the BookSmart property remains undetermined. If the property is acquired through the option agreement, whether by the Successor Agency or assignment of the option to a private developer, the involvement of a government entity will require relocation assistance to tenants impacted.

Should the Successor Agency decline to purchase the site and terminate or let the option expire, and a subsequent developer were to arrive in the future, relocation assistance is not required. The legal requirement to provide relocation assistance to dislocated tenants is triggered only by governmental involvement or partnership in the development of the site.

Before the state forced hundreds of redevelopment agencies to dissolve, the city and the Valley Transportation Authority, which has a 59 percent controlling interest in the property, had plans to develop all or a part of the Caltrain parking lot into market rate housing to support downtown businesses and rail ridership.

What will happen to the Caltrain lot is still unknown. The oversight board may want to explore selling or leasing all or part of it.

“This will be a learning experience for us, not knowing how the dissolution impacts this particular situation,” Little said.