Mission City Council votes unanimously to impose $12 million assessment against Gateway project

The Mission Gateway property sits empty two years after the city approved a development agreement.

When the time came Wednesday night, the Mission City Council took only a few seconds to pass an ordinance that will impose a $600,000 per year assessment on the often delayed Gateway development.

Despite the pleas from the attorney for Gateway developer Tom Valenti to delay the vote, the council was unanimous in approving the payments without discussion. During a public hearing earlier in the meeting, attorney Korb Maxwell, representing Valenti, said, “we have significant concerns about these assessments and what it does to the … project.” Valenti was not present at the meeting.

“Why do we have to do this today,” Maxwell asked. “We think this is an improper use of the developer’s time and the city’s time.” Maxwell also told the council that the message of “public and council” regarding Valenti’s last proposal to have a stripped down development was received “loud and clear.” Public reaction to that plan was overwhelmingly negative.

Maxwell said a new plan is being developed that will be multi-story and multi-use and could be presented in 30 to 60 days. Maxwell said the project’s “lender is in the audience.” An assessment could “cause significant problems” with the project, he contended.

The assessment of $600,000 per year for 20 years is designed to repay the city for its $12 million investment in stormwater improvements on the 16.2 acre Gateway property that made it developable. Bond counsel Gary Anderson said the resolution that created the mechanism for reimbursement of the city’s investment dates back to 2007. “So they knew about it,” confirmed councilor Amy Miller. Anderson said it was part of all the development agreements. “So if the property is in a flood plain, the only way it could be developed was to be out of the flood plain,” councilor Dave Shepard said.

Councilor Debbie Kring at one point asked Maxwell about his comments: “I didn’t hear a threat there did I?” Maxwell responded, “No, but we all have to do what we have to do.” Kring said Valenti has left several messages for her at home, but she is not returning them. Another plan that looks like the last one, won’t go through, she said, “not on my part.”

It was just over two years ago that the council approved a development agreement with Gateway that included $30 million of public financing for the project. That agreement included $6 million in upfront payments to the city for the stormwater work and $6 million at the end of the financing period. It also called for construction to be substantially complete by December 2015.

The several residents who spoke at the hearing were negative about the lack of progress at the Gateway and the downgraded proposals. Beth Garcia said she see lots of other development in Mission that is positive. “I don’t understand how all of this can be going on and (Gateway) can’t get this together.”

After a number of procedural steps, the assessment will go on the Gateway property tax bill in December unless it is paid if full in the near future.  Any new proposal from Valenti would likely take weeks or months to review, the council was told, which could push the assessment back by a year if it is delayed to vet those proposals.  In response to questions, City Administrator Laura Smith said the last installment of property taxes on the Gateway property had not been paid yet.