Tuesday, July 20, 2004

Constructing Cordelia -- Developments make it the county's 'boom area'

May 1, 2004

Constructing Cordelia -- Developments make it the county's 'boom area'

By Matthew Bunk

-- When the city first decided to harness the commercial potential of the Cordelia area, only a few homes were strewn across the rural countryside. Looking at the area now, after several years of exclusive attention from city planners, it's difficult to imagine a sleepy, undeveloped valley.

Elaborate office buildings are splayed across the countryside and retailers now clamor for prime spots along the freeway. Situated at one of California's most cursed traffic bottlenecks, the intersection of interstates 80 and 680, the core of Cordelia and lower Green Valley has become a pit stop for commuters.

For that reason, and because it has a generous amount of prime residential acreage, the area has developed into a thriving hub.

The commercial structure didn't immediately burst into existence. Instead, it grew deliberately at first and in stages. Mostly it followed residential development, today with a base population significant enough to attract and sustain retail business.

Frenzied construction reached a peak in 2003 as developers put up more than 180,000 square feet of office space. Most major projects were built within the last decade.

Fairfield started to push growth more than 20 years ago by annexing 2,637 acres in lower Green Valley. In July 1983, the city formed a redevelopment district that allowed it to collect incremental taxes and buy land through a redevelopment agency for later commercial use.

The city agency at one time was the largest landowner in the area. It held more than 250 acres of land, which it purchased in separate deals for about $17 million. After selling chunks to developers for two large business parks, the city still owns 78 acres in the Green Valley Corporate and Green Valley Office parks.

Recently, the city agency sold a 1.6-acre parcel to a developer who said it will be used for an Applebee's restaurant, Bank of America, Pet Club and a 10,000-square-foot retail center. The parcel is next to Costco, which also sold some of its undeveloped property in the three-party land deal.

The city agency got $200,000 for its parcel, a strip of land the city planned to use to widen I-80 but later decided against. The redevelopment property generally has been sold at or below market value to developers who conform to the city's tenant and structural requirements. In many cases, the city mandates a time frame for construction.

Although the city doesn't develop land itself, it generally controls what can be built in redevelopment districts, said Joe Lucchio, city economic development project manager.

"The city had a vision for what should go out there," said Lucchio, who has worked on the Cordelia Project Area for almost 10 years. "The whole purpose of redevelopment is to get what you want."

Retailers lured by growth

More retail space will become available when developers get further along in their master plans, which in some cases call for dozens more office buildings and retail centers. But right now, lower Green Valley doesn't have any newly constructed retail facilities waiting to be filled, said Deb Karpo, retail broker for Colliers International.

The next large retail project will be on land bordering I-80 on the north, Karpo said. The property, owned by Harvey Shein, had been a part of a 24-acre parcel occupied by a truck stop. The truck stop was destroyed last year, and the city purchased seven acres for roadway improvements.

The remaining 17 acres has been planned as a mixed-use project, with both retail and high-density residential development.

"The property is very visible," Karpo said. "There's a lot of different options for the land out there, and it's got some great frontage."

Future retail opportunities in the area will be limited only by the amount of land designated for that type of use and the city's insistence on controlling what type of businesses are welcome, Karpo said.

Even so, space has filled fast, she added.

"There are a lot of moving parts right now," she said. "It's hard to announce anything, because everything changes so quickly and some of it isn't nailed down yet."

Office development feels Bay Area slowdown

Developers who lease office complexes have slowed plans to build more office facilities until supply dwindles, meantime concentrating on red-hot retail projects.

It seems a glut of office space in other Bay Area communities has cut off demand for offices here, even in the city's fastest-growing area.

"The leasing market for offices has been slow," said Tim Schroeder, vice president of Quadrangle Development. "The Bay Area economy has impacted us. Vacancies in Concord, Walnut Creek and Pleasanton affect our market here."

Rather than start construction immediately on a third office building on its land in the Green Valley Corporate Park, Quadrangle has decided to put it off until next year, Schroeder said. The company still has empty space in its first multi-tenant office building, although a recent lease agreement will bring their vacancy to less than 3 percent.

Office space will fill first in the Bay Area, then demand will increase in outlying areas, Lucchio said.

"So it's not going to develop here as quickly," he said.

Quadrangle still plans to begin construction of a Marriott-based Extended Stay hotel and a restaurant later this year, Schroeder said. Both buildings have been included in the Green Valley Corporate Park master plan, which calls for more than 20 buildings on 132-acres of land.

Venture Corporation said it will build four buildings for office condos later this year at the Green Valley Corporate Park.

Construction will begin this summer, and the properties are expected to hit the market before winter, said Robert Eves, president of Venture.

"The site plan is complete," he said. "Construction will take six months. We'll just put 'em up."

Selling office space, rather than leasing, gives Venture an edge in the market, Eves said.

Garaventa Properties, owner of the 122-acre Fairfield Corporate Commons, may build another facility later this year, although no plans have been submitted to the city, Lucchio said. Garaventa already has one office building in the Commons, but the next one reportedly will be a retail center.

Homes first, commerce follows

The original smattering of homes in old Cordelia and the early residential developments at Cordelia Villages were miles away from the nearest shopping centers in Vallejo and Fairfield. Residents at the time often complained about commuting for groceries, said Bob Rossi, a spokesman for Seeno Homes, a longtime homebuilder in Cordelia Villages.

"Twenty years ago homeowners were wondering why there were no supermarkets," Rossi said. "But nobody builds a store that size and then hangs a 'For Rent' sign on the door. Until enough people live in the area, a supermarket won't just move in."

Price Club, now Costco, opened in the early 1990s as the first major retailer in the greater Cordelia area. Ethan Allen followed in 1997 as the area's first clothier, and later projects included Safeway, TJ Maxx and several retail stores in Green Valley Crossing.

Napa Tahoe Specialty Development oversaw the 167,000-square-foot Green Valley Crossing project, which reached near capacity within two years. Napa Tahoe also was the purchaser in the recent land deal with the city agency and Costco.

Napa Tahoe immediately sold two of the four parcels, one to Applebee's and the other to Pet Club. It plans to lease one piece to Bank of America and keep one for the retail center, a company official said.

"I'm bullish about (lower Green Valley)," said Richard Heller of Napa Tahoe.

The 4,000 homes in the area should provide a consistent base of shoppers, retailers said. Millions of weekly commuters and the projected creation of up to 4,000 new office jobs provide retailers with plenty of targets, Karpo said.

"Retail has been more stable than the office market," Karpo said.

Dwindled interest in office space hasn't shaken the city's confidence in its painstakingly developed Cordelia Area Project, which has become a pet project of planners. It also has retained favor among brokers as a showcase when trying to sell or lease property.

"It's the boom area of Solano County," said Steve Spencer of Premier Commercial. "It's been touted for years, and all the streets and infrastructure are set for massive growth."

Some residents who bought homes before offices sprouted say they want construction to stop.

"Enough is enough," said Ruth Clawson, a lower Green Valley homeowner for 10 years. "We bought here partly because of the rural nature of the area. We knew then that it would be developed, but this is going to be higher density than we originally were told."

Traffic makes it difficult to get from one side of the interstate to the other, said Monica Brown, a teacher at Green Valley Middle School who has owned a home in Cordelia since 1991.

"Adding office space and retail in Green Valley doesn't help me if I can't get to the other side of the interstate," Brown said. "The practical part of me says it's good because it brings higher paying jobs, but that drives up home prices to the point that our children won't be able to afford to buy a home here.

"The other part of me wants to preserve open space."

When the city first took over the Cordelia redevelopment, the land was considered "blight," a somewhat unfair description for green, rolling hillsides and farmland. Even Lucchio doesn't like to call it that.

"There actually isn't much that anyone could have considered blight in Cordelia," Lucchio said. "What the redevelopment agency did could be called parcel assemblage to make the property usable."

Reach Matthew Bunk at 425-4646 Ext. 267 or mbunk@dailyrepublic.net.

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