No Deal for Madison Marquette

September 12, 2012
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Not in City’s Best Interest to Rush Sale; MM’s Exclusive Right to Develop Land Near Bay St Mall Expires Sept. 30

In a closed session last week, the Emeryville City Council decided not to sell the four acres north of Bay Street Mall to developer Madison Marquette (MM), concluding it was “not in the city’s best interest” to make the sale. After years of delay, MM was rushing to finalize a deal before its exclusive right to develop the land expired on Sept. 30.

Mayor Jennifer West said in an email that a “long range property management plan” will be developed as part of the process of dissolving redevelopment in the city. She said the City Council (as successor agency to the redevelopment agency) will decide probably sometime next year what it wants to do with the property. West said the Council’s decision does not preclude MM from purchasing the land at a later date. The Council did not decide whether to allow other developers to bid for the land, known as Bay Street Site B.

The Council’s decision officially ends MM’s exclusive hold on the land. Under a deal made between the city and MM back in 2005, MM had an “exclusive right to negotiate (ERN)” with the city to develop the land. MM is the developer of the Bay Street Mall, and has consistently argued that the less busy north end of the mall needs “anchor” retail and other development to attract more shoppers.

Council Member Ruth Atkin said MM’s plans for the property included a hotel (on vacant land which is part of the original Bay Street, known as Site A), and, on the new property, a six-story building(s) with retail on the first floor, parking on the second, and apartments (200 units) on the remaining four floors.

“MM acknowledged our concern about including family housing and said that 2- and 3-bedroom units would comprise about 12 percent of the housing,” said Atkin. “But they weren’t specific. Their plans were all very conceptual. They had figured out the parking, but nothing else.”

Over the past eight years, the City Council voted to extend MM’s ERN six times despite strong objections from residents who believed MM should provide community benefits in exchange for the ERN and generous subsidies from the city totaling well over $50 million. Some of the community benefits requested include a park or open space, affordable housing for families, and a local labor agreement. But MM has consistently ignored residents’ pleas and refused numerous requests by residents to meet with them.

The City’s Redevelopment Agency (comprised of the five City Council members), has spent years piecing together what is now Site B, including a railroad spur, and has spent tens of millions in taxpayer money to rid the site of toxic waste from heavy industry that had once occupied the site. It is now considered some of the most valuable real estate in the East Bay, and sits smack in the center of the city.
“I consider this land very precious, as it is in the heart of the city and is prime real estate,” said Mayor West. “What is the best use for it  – in terms of providing funds to the city over years to come, and giving the residents a place they value?
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