After a long discussion and three separate votes, Hollister City Council voted 4-0, with Mayor Ignacio Velazquez recusing himself, to pass a resolution to accept the certification by the city clerk of the petition to stop the development of the 400 Block. It took three tries to get the vote because of disagreements on the nature of instructions to city staff to bring back a resolution to the next meeting to either repeal the original resolution that approved the development or place the referendum on a future ballot.
Councilwoman Mickie Luna commented that the financial impact of conducting the signature verification was $3,168.79. She then said if the petition should be put on a ballot the cost of doing so would range from $25,000 to more than $200,000, depending on which ballot it was placed. She asked if there were a mid-range figure the city could consider.
Christine Black, assistant city clerk, told her the cost would depend on the council’s choice of three options. She said if the petition were placed on the next regular municipal election, Nov. 6, 2018, which the staff recommended, the estimated cost would be $25,000 to $30,000. It would have to be submitted to the county registrar’s office by Aug. 10, 2018. They could choose a consolidated special election in conjunction with the statewide primary on June 5, 2018. The estimated cost would be $35,000 to $40,000, with a deadline for submitting it of March 9, 2018. The third choice would be an overtime special election on April 10, 2018, with an estimated cost of exceeding $200,000, with a deadline of Jan. 12, 2018.
Luna asked Bill Avera, city manager, if the money would come out of the General Fund. He told her it would. She asked if the cost of an election would impact ongoing city projects. He said money would have to either come from projects already approved or the city would have to tap its $5 million in reserves. She then asked Soren Diaz, city attorney, to explain for the public’s benefit the pending issue of a ruling from the state’s attorney general on whether the petition qualifies as a referendum that can be placed on the ballot.
Diaz said only a referendum that challenges a legislative act, rather than an administrative act, can be placed on a ballot. He said the city anticipates a formal opinion within 30 days. Black told Luna the reason the staff was recommending the November election was because it is the most cost-effective approach, and that there would already be elections for council members, mayor and city treasurer.
Councilman Raymond Friend said the referendum was illegal and was being spearheaded by someone—meaning the mayor—who has to recuse himself because he has a conflict of interest and “it was built on lies, so I’m not supporting any of this.” Councilman Jim Gillio, who referred to himself as a dollars-and-cents person who believes in the rules and representing the people, said he wanted to hear the statements from the audience, but first went into a lengthy explanation of the legal quandary the city was in concerning the 400 Block.
He explained what the block would mean to the city if the proposed development (that the mayor has been attempting to stop) went forward. He said, if developed, the block would provide several revenue streams, the first being property taxes. He said, hypothetically, if the project were valued at $10 million, over 20 years potential property taxes would range from $7 million to $15 million. Referring to the 400 block, he explained that after the Resource Development Agencies throughout the state were closed down, all lands and properties they controlled were rolled into what is called Successor Agencies, which are required by state law to sell. He said there would be real, financial consequences to the city and residents if those properties, including the 400 Block, were not sold.
Gillio told the audience there are eight agencies within the county that jointly own the 400 Block. Property taxes have not been paid to those agencies for more than 20 years in anticipation of receiving shares of the sale price when it is eventually liquidated. When sold, the school district would receive $1.2 million, he noted, and the remaining agencies would split $1.68 million. If the land is not sold and developed, the debt would remain and the state has mandated that the land must be sold, whether it is developed or not.
If those who signed the petition against developing the lot win an election, the city will still be on the hook to pay nearly $360,000, which Friend told the audience will have to come out of roads or other projects. This appeared to be a revelation to at least one person in the audience who had signed the petition and said if she had known this beforehand she may not have done so.
“We’re going to end up in court on this if we decide not to give those agencies those property tax dollars,” Gillio said and went on to further explain the loss of sales taxes if the proposed development is blocked by the vote. He also addressed the issue of vacant buildings downtown that opponents of the 400 Block development suggest that the Community Foundation should occupy rather than build a philanthropic center on the site. “If you look at those buildings that are vacant, they’re unreinforced masonry buildings that maybe the property owners haven’t brought up to code. If you look at all the buildings that are up to code they’re occupied.”
Gillio addressed the petition the mayor circulated, saying he believed those who signed it did so on an emotional basis.
“I feel horrible for these people who were probably misled and didn’t know the facts when they were signing this petition,” he said, but recognized those who signed it had an expectation of being able to vote on the issue. He said despite the cost it should go to an election.
When Karson Klauer, acting as vice mayor, invited the public to speak he reminded them that all the council was voting on was whether or not to accept the city clerk’s certification of the petition signatures, and not on what to do with the 400 Block.
It proved, however, to be an impossible task for those who spoke to stay clear of the controversial subject. Most who spoke were in favor of the development and addressed the economic benefits to the community. Those few who spoke against it did so mainly from the perspective that the present is different from the past, and peoples’ desires for open space were more important than new business developments.
Michael Kelly stated that leaving the site as open space was of little benefit when there were already other plazas in town and numerous parks that are underused. Juli Vieira, president and CEO of the San Benito County Chamber of Commerce, reminded the council that during discussion on an earlier agenda item they had said “Hollister is open for business,” and that the proposed development is a business activity. She also addressed a rumor on Facebook that stated, “the chamber was bought off because we get funding from the Community Foundation, which is part of the project.” She said the foundation has not funded the Chamber of Commerce since 2014.
“We have no skin in the game where that is concerned,” she said. “What we are concerned about is business in our downtown area and revitalizing downtown. This building (philanthropic center) already has people interested in it and nonprofits that provide services for this community.”
Bob Tiffany and Kay Felice come from families that have lived and worked in the city and county for generations. Tiffany said downtown has been waiting 28 years for redevelopment of the site since the 1998 earthquake that destroyed 28 businesses there. He told the audience that the Community Foundation granted more than $1.5 million to nonprofits and people in need in 2016. He said if the philanthropic center is built, it will encourage more giving in the community.
“In any other city this project would be fully embraced,” he said. “I hope in the future our community will support this project.”
Felice said everyone, no matter their position, wants what’s best for downtown. She said Gillio’s presentation of the facts was one view and then told of being at a ball game recently at which two young girls were trying to circulate the Velazquez’ petition. She said she asked the girls what the 400 Block was about and they only said it was bad for downtown.
“They were putting this petition in front of the parents and weren’t getting any information from it,” she said. “This is false information and no way to base a decision. There may be 1,600 verified signatures, but how many of those 1,600 people knew what they were voting on?”
Victoria Montoya said she had signed the petition partly because she envisioned a plaza like she was familiar with in southern states, and she had been told the project would only be condominiums. She said if there were to be a development, it should also include restaurants, stores and open space. Later, Gillio told her that is exactly what the development includes.
Ellen Laitinen believes the development will benefit the community, but feels if there had been more information from the city, people would have voted differently. She said she was concerned about the way the site is being presented on Facebook.
“People are saying we can have this wonderful event center and it’s going to be a staging area, but what I don’t hear is a solid plan in place; I don’t hear who’s going to pay for it,” she said. Then she encouraged the council to wait until the city hears back from the attorney general, and perhaps they can avoid an election.
Marty Richman wondered if the city opted for the November election and then the attorney general found that the referendum was illegal could the city pull back from the election. If not, he said the city should follow the law and include it on the ballot. He concurred with Gillio that even if opponents of the project win, the city would still owe hundreds of thousands of dollars, plus the cost of the election. Diaz answered Richman’s question, stating that if the city were to learn after deciding to place the referendum on the ballot that it was illegal and if it had not yet submitted it to the registrar’s office, it could be pulled. He also said that even if it were already on the ballot and the attorney general made the determination it was not valid, the city could file a post-election challenge seeking the judicial validity of the measure.
Elia Salinas said even though she has consistently been against the project, she respects the council’s opinion, but suggested they wait until they hear back from the attorney general because she is also against the city being embroiled in lawsuits that spend taxpayers’ money to defend. Roland Resendiz has been a vocal opponent of the project from the beginning. He said much has changed since 1989 when the buildings came down, including social media where people are more comfortable voicing their opinions rather than speaking publicly at council meetings.
“That’s important for you to keep in mind; for you to pay attention and start representing your constituents,” he said. “I’ve heard a lot about the money and cost of a special election, but I feel what has not been emphasized enough is that you have a choice. You can listen to the people who signed that petition and you can rescind your decision. There’s a lot of distrust on a national and local level between governments and constituents and I see that a lot on social media. There’s a disconnect on people speaking with you guys and you should pay attention and start representing your constituents.”
When the council had their final say, Luna recounted her experiences on the day of the earthquake when she was trapped in city hall for several hours and then went outside to see the devastation. She told the audience they did not know how important the 28 businesses were to Hollister and reiterated the 400 Block was never a park and never meant to be a park. She criticized many of the Facebook comments as just comments about other people’s comments rather than about the city, and wondered how many of the comments were from people not from Hollister.
“Excuse me, somebody from Laguna Hills is saving the block,” she said.
Friend said the 400 Block has sat empty for 28 years and if the council rescinds its decision it will sit another 28 years because the council will not be willing to spend any more money to turn it into a park. He said it will sit and continue to cost the city more than $3,000 a year to mow and water the lawn.
“If that property is not sold we will still pay those taxes,” he said. “We made a deal with the state, and the person (Velazquez) that made this referendum signed that deal. We can either sit on our hands and not do anything with it and it’s still going to cost us $240,000 (Gillio later said it was actually $360,000), and when it comes out of the General Fund there are alleyways and streets that are not going to get paved.”
Councilman Klauer said it was exciting to know that there was a piece of property that so many people have expressed interest in and thanked those who signed the petition for getting involved in the political process.
“As elected officials we’re told that we don’t listen to the people,” he said. “This is a grand opportunity to actually deal with the process, and the beauty and savagery of the process, and figure it out as a community. Everybody is going to have an opportunity to get involved.”
After the three votes it took to approve the resolution, Klauer asked attorney Diaz if they had a consensus on how to move forward. Diaz explained to the council and the audience that the council would be given an option at its next meeting to consider either repealing the ordinance or submitting it to voters. In addition to the technical aspects of moving forward with an election, Gillio also wanted the staff to research and present to the council for consideration any financial liabilities the city might face from the Community Foundation and Del Curto Brothers if the project were cancelled.