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Photographs by Stephen Laufer

There's a Hole in My Bucket: Louis Rittenhouse's lot is one of two unsightly holes still empty downtown.

Revisioning Santa Cruz

In the first two parts of our series on Santa Cruz's history of development battles, we went from sleepy retirement town to hotbed of progressive politics to post-earthquake shakedowns that leveled that familiar conservative/progressive battleground. Now Part 3: As our economically stressed city gears up to write a new General Plan, we look at how Vision Santa Cruz managed to make consensus-planning work after the earthquake.

By Mike Connor

With the city of Santa Cruz facing an increasing financial crisis as we head deeper into 2005, the current political climate of Santa Cruz is in sharp contrast to our locale's legendary fair weather--accusations and recriminations abound, shifting the fault for our woes this way and that. Of course, debates around economic development have been historically acrimonious ever since the progressives wrested political control from business interests. For while the progressives succeeded in blocking what many still consider the worst ideas for development ever proposed here--a freeway running through town, a convention center at Lighthouse Field, etc.--their critics contend that they've also blocked many revenue-inducing projects and have failed to realize any of their own, shortcomings that have in turn frustrated local business owners and city-funded nonprofits in search of an economic boost.

"It's very difficult to get a consensus on anything," says Seaside Company owner and former Vision Santa Cruz member Charles Canfield. "I don't think we're as far apart as it seems sometimes, but once a couple people start yelling around, everybody puts on a suit of armor and says, 'Let's go to the trenches.'"

But once upon a time, when an earthquake leveled the town in 1989, the rubble, as it were, filled in these familiar trenches. Look down Pacific Avenue today--15 years after the Loma Prieta earthquake--and you'll see, with the exception of two unsightly holes, a bustling testament to the consensus planning of Vision Santa Cruz, which was the public/private partnership formed to lead the rebuilding process of downtown Santa Cruz. Then, look east to see its fallout.

A leisurely stroll down Pacific Avenue's redheaded stepchild, a.k.a. Front Street, affords scenic views of the ass ends of parking lots, punctuated here and there by boxy brick banks and puny little cinder-block blobs polka-dotting the streetscape. Somewhere behind the buildings on the east side of the street flows an historic and mighty river, which you might see--if, perchance, an errant swarm of bees attacked from the west, forcing you to turn your leisurely stroll into a mad scramble up and over the steep, scraggly, weed-encrusted wall of earth that is the Front Street section of the San Lorenzo River levee.

For in spite of dramatic improvements to the river levee, including seeding it with all manner of native plants, the downtown continues to keep its back turned on the San Lorenzo--and it seems to snub Front Street just for hanging out along the river's bank.

The sad truth is that in the wake of the quake, many dreams for downtown were quickly cast aside. Some ideas seemed prohibitively expensive, like the "Hanging Gardens of Babylon" quest, or the idea to convert Pacific Avenue into a Venetian canal. Others that quietly died were modest, and in some cases strongly recommended by consultants hired by VSC, like the park planned for the small lot where Cathcart hits Front Street--now the site of a maternity store. The former Zanotto's parking lot was supposed to be decked with housing overlooking the San Lorenzo. There were plans to build a performing arts center in San Lorenzo Park, or at the site of the then-dilapidated Del Mar Theatre, which was offered to the city for about one third the going rate of a box of Whoppers--or $1, to be exact.

Now, rubber-necking at the past is tons of fun in and of itself, but looking at the successes and failures of Vision Santa Cruz is also instructive, since these were the first toddling steps of a public/private partnership that continues to shape how our city grows.

Tunnel Vision

While not quite as peaceful as some participant's idealized memories suggest, VSC managed to develop consensus on the "First Principles" that would inform the final Downtown Recovery Plan--and this despite the diverse political interests of its board, which consisted of both public and private sector representatives, including socialist-feminists, business owners, city staff and a few citizens at large. VSC's intent was to bring all downtown stakeholders into the decision-making process. Not surprisingly, there were clashes from the get-go.

"It was just incredibly contentious," says then Mayor Mardi Wormhoudt. "It was very difficult, but I think everybody knew they had to stay at the table. I mean everybody had a stake in being there, and to that extent, I think it's really a model--it's contentious, it's frustrating, it's exasperating, certain people just piss you off, it's really hard. But it's the only process I know that works in a place like Santa Cruz County, where so many people have such strong feelings about how things should be."

"The old joke," says Mike Schmidt, a VSC member who later ran against Wormhoudt in the 2002 race for District 3 county supe, "was that Mardi Wormhoudt--you could see her fingernail marks on the mayor's desk as she went kicking and screaming into the process."

Architect and former Councilmember Mark Primack, who also ran against Wormhoudt 13 years after the earthquake, wasn't--and still isn't--similarly amused.

"Santa Cruz is a town that loves to rewrite history," says Primack, "so let me tell you what actually happened, knowing that you talked to Mardi."

Primack was passed over as a representative of the city, despite his status as chair of the zoning board--a decision he attributes to Wormhoudt's political influence.

"It was more important," asserts Primack, "for Mardi to align people on the city side that could be a consolidated voting block that could hopefully block whatever the business community wanted to do."

Political observers today might recognize familiar players making such an accusations as "politics as usual" in Santa Cruz--local gadfly Bruce Bratton is already crying foul that the General Plan Advisory Committee is stacked with development proponents. But UCSC planning professor, and then VSC member Jim Pepper remembers the early days of the public/private adventure from a slightly different angle.

"I think at the outset," says Pepper, "most of us who were neophytes in the wild and crazy world of Santa Cruz politics, we kind of deferred to people who had already been battle tested. There was a kind of galvanizing of longstanding differences between what I might call progressive and conservative elements--people who thought this would be a good time to roll things back 40 years. What we were swimming against was a history of political estrangement between so called old-time business interests in Santa Cruz and what basically was a more liberal, progressive, and in many instances, younger city commission. Those sentiments ran deep, and I would say it was a couple months before a group of us realized that the polarization from decades of local politics were going to have to be broken."

Mayor Mike Rotkin says that most of the controversy revolved around cars downtown.

"Merchants wanted cars on Pacific Avenue," says Rotkin. "They thought if people couldn't drive by and see their store, they would never see the shop. And they went out and had examples of pedestrian malls that were failing all over the place and saying, you know, it's gonna be a disaster. And then on the other side the people who wanted to get rid of the traffic would go, 'You know, Europe--look, there's no cars in the center of downtown Copenhagen.' So it was like this pitched battle of people with very different visions of what downtown was gonna be."

"I did a lot of mediating," says Pepper, "I was one of a handful of people who sought to build some kind of consensus."

Former Councilmember Don Lane, who was appointed mayor in 1991, points to another consensus-building force: the earthquake itself.

"I remember before the earthquake when I was running for the City Council, there was the sense that this community knows what it doesn't want to do," says Lane. "The earthquake was the great exception to that."

Pacific Cookie Company owner Larry Pearson says the formation of VSC yielded lasting sociological benefits.

"One of the really nice benefits of it was that we got to know each other," says Pearson, "and we got to know that people who had different political beliefs--let's put it that way--had at base the community at heart."

Working with the Oakland-based ROMA Design Group, VSC eventually assembled task forces to address the various aspects of rebuilding downtown. While the city, with the help of FEMA, was busy replacing the outdated infrastructure beneath the street, VSC was addressing how wide the street would be and in which direction it would run. VSC set building heights and specified acceptable uses, accepting the prevailing logic that a mixture of storefront retail and upper-level housing would make for a lively and populated downtown. It identified opportunity sites for parking lots and plazas. It expedited the approval process by generating a general Environmental Impact Report for the entire downtown area. Still, actual construction proceeded slowly.

Says Pepper, "I think the problem was that we were trying to reach a balance point between public investment and private investment, and I think that probably captures the nature of the disagreement more than anything else."

Equity Happens

Old free-and-clear buildings were the backbone of the funky vibe downtown, if only because their owners could afford to rent them out cheaply to funky shops. In early 1990, an economic study by the consulting firm Cline and Clawson indicated that downtown rents would nearly double in any new or heavily repaired buildings. Bye, bye, funky shops.

"When they started looking at the kind of rents they would have to charge to make things pencil out," says Pepper, "it began to really shift the economics of Pacific Avenue in terms of rent structure."

"A lot of discussion in Vision Santa Cruz was about the types of businesses that we wanted in town," says Larry Pearson, "and we settled on the kind of the mix that we have, and that is some national businesses, some regional businesses and primarily local businesses. But you can't legislate that."

Vision Santa Cruz was an all-star team filled with political and private movers and shakers, but it wasn't actually building any buildings; it was still an advisory committee to the city that could only lay out the bait--a promise to build a lively, business-friendly downtown--and hope developers and the kinds of businesses they wanted to see downtown took it.

Back in November '89, City Manager Dick Wilson recommended that the city bring in a specialist in the hunt for private capital to head up the city's Redevelopment Agency.

"For as long as I've lived here," said Wilson, "the city has been 90 percent built-out, and redevelopment has been a part-time activity. When you lose the better part of your downtown, redevelopment activities suddenly loom large. You need someone who's a veteran in the business of rebuilding, someone experienced in working with applicants so that projects can be approved. It's very different from the typical land-use regulation process. No one here had that kind of experience."

Wilson recruited Ceil Cirillo from Southern California to revamp and direct the RDA. VSC was still making the rules for the new downtown, but soon the RDA was the one playing the game. Most VSC members say Cirillo and the RDA played a pivotal role in the recovery process.

"We worked with lenders during that period and we tried to do some recruitment during that process," says Cirillo, "we worked hard to get the movie theater project [Cinema 9] going--when that theater project was finally completed, it was what resulted in family coming back to the downtown."

The RDA pursued an alley improvement project to make streets safer at night, and with access to a $1.5 million loan from the Red Cross, the Agency kicked in money for housing at the St. George Hotel site and El Centro.

Harvey Nickelson, then president of Coast Commercial Bank, says his bank was in a unique position to help property owners and developers secure loans needed to rebuild.

"Right around that era, from '89 to '91 was probably one of biggest downturns in real estate quality in California. Security Pacific, Wells Fargo, the Bank of California--all were under governmental restraint in making real estate loans, so it was almost impossible unless you were a large organization, they had a total restriction on commercial real estate lending. And on top of that, because of some of the issues in Santa Cruz, it was a place where a lot of people thought you wouldn't want to put capital."

"That was really tough nut to crack," says Pepper, "trying to get people to rebuild, trying to get their old tenants to come back--imagine you've been in Phoenix Pavilion for a year and your rent was going to increase by 25 percent when you rebuilt. When property owners could see they wouldn't get old tenants back because rates were going up, it led to a kind of stalemate when not much happened at first, and that made things stickier, that made things sluggish in getting going again."

"I was a local bank, I had a state bank charter, I wasn't restricted, and I didn't have any bad loans on the books," says Nickelson. "We knew Santa Cruz and we knew it'd recover, so we got involved, very aggressively."

Asked if Coast Commercial got the expected returns on its downtown investments, Nickelson, who has since sold his bank and taken to traveling a lot, says, "Everything turned out exactly fine; it all came together."

A New Downtown

The overall success of the collaborative effort to rebuild downtown is undeniable. Look around downtown and you'll see--with the exception of Louis Rittenhouse's empty lot at Pacific and Church and Ron Lau's empty lot at the North end of Pacific--a downtown more economically successful than it ever was before the earthquake, even if nobody got everything they wanted.

"Years later," says Primack, "people say, 'we ought to have had a plaza downtown, we ought to have had this or that,' and I say, well it was all in my plan. But the important thing is that people individually get involved and get invested personally in what's happening. That's much better than a kind of unilateral, one person's plan, even if it was--and not that mine was--but even if it was the work of a genius, it doesn't matter. What's important is that the community kind of grow in your downtown."

Not that all the community's interests were ultimately manifested on Pacific Avenue. The plaza idea was pushed over onto Front Street, where it's been all but forgotten. An elaborate plan to improve the Front Street Corridor--which includes two riverfront parks and an amphitheater--is still on the city's back burner, but RDA assistant director Joe Hall says that the project will require massive private investment, which just takes time.

Meanwhile, the RDA is still pursuing goals outlined in the Merged Earthquake Recovery and Reconstruction Project, one of which is to "implement public/private projects which demonstrate public/private commitments to economic development and infrastructure improvements in Beach and South of Laurel Area." More specifically, the RDA's stated goal is to "develop and implement public/private partnership to assist in development of a full service hotel."

But while the agency did its job, its effort was ultimately stymied by opponents who felt the chosen site was inappropriate for a conference center/hotel. Before the Western Hotel Properties backed out of the Coast Hotel deal, following a poll that indicated the community was spilt on the issue, people like Pearson had high hopes that the project would enjoy the same support as did VSC's Downtown Recovery Plan.

"I'm hoping the Coast Hotel will be another one of those efforts," said Pearson, "to correct an old, historical wrong, if you will--to have it's own little earthquake."

As the city gears up to write a new general plan, Pearson thinks the lessons learned during the earthquake are still informing our representatives' decisions.

"I can't speak for this directly, only secondarily," says Pearson, "but the earthquake made, say a person like Mike Rotkin and Bruce Van Allen, who were two of the socialist-feminists on the council at the time, and were also on Vision Santa Cruz. It gave them a better idea of how a community fits together, that there's an economic necessity that there has to be funds available to do things, and if one of those things that you want to do is to provide low-cost, subsidized housing for low-income residents, that there has to be some pot of money to do that. The city has to be economically successful, and I think you see that today--Mike Rotkin as mayor and a supporter of the idea of the Coast Hotel, he's very, very conscious of the need of the city to make money to provide services that the community demands, he understands that better today than I think before the earthquake."

The most recent budget deficit figure coming out of the city has grown to almost $4 million, thanks to a successful lawsuit against in-lieu franchise fees for public utility services that was brought by the Howard Jarvis Taxpayer's Association--the same folks behind Proposition 13. $4 million is a scary number, but not as scary as the harsh post-quake economic reality--Ceil Cirillo estimated that reconstruction cost somewhere in the neighborhood of $100 million. Faced with a natural disaster, Santa Cruzans agreed to a new tax that helped the city rebuild. But will it agree to another one, now?

A budget task force led by Tony Madrigal, Ed Porter and Cynthia Mathews will likely campaign for a new utility tax to cover some of the lost in-lieu revenue--a short-term fix addressing a specific loss. But the new General Plan will address long-term structural means of fixing the city's budget woes--for the first time ever, the GP will include an economic component. The question is, will Cruzans put their heads together and come up with something that works? If not, the alternatives might be grim.

"I don't know," says Louis Rittenhouse, "what does a city do when it files for bankruptcy? I wonder if State National Guard comes in and takes over garbage collection? Would Schwarzenegger be running the city? I like that--that could go someplace."

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From the April 27-May 4, 2005 issue of Metro Santa Cruz.

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