Council votes 5-0 for new city hall & MOB; lawsuit threatened

Updated Mar. 27, 2:26 p.m. —
Citrus Heights council members voted unanimously Thursday night to approve a long-debated $53 million proposal to tear down and relocate the City’s existing hall and replace it with a three-story medical office building (MOB) — rejecting a proposal and lawsuit threat by a resident group proposing a less-imposing two-story design.

“Mr. Hill, I’m sorry that you feel the way you feel,” Councilman Jeff Slowey told Norman Hill, who heads the resident group Preserve Our Civic Center. “But threats, they don’t bother me in the least bit. If you wanna go to court I say bring it on — but bring your checkbook.”

Hill, a retired environmental attorney, has promised litigation in the past and reiterated his “compromise” offer Thursday night, which seeks to lessen the environmental and visibility impacts of the proposed medical building by increasing the setback away from Greenback, and lowering the height. He said by adopting his proposal, the City could avoid litigation and still get a new hall and two-story medical building.

“I recommend that you take a hard look at this proposal, or we will meet again to discuss it at a settlement conference in a CEQA lawsuit,” Hill told council members prior to the vote, referencing requirements in the California Environmental Quality Act he says the City hasn’t met.

City staff and council members believe the City has followed CEQA requirements, with environmental consultant Katherine Waugh addressing findings covered in a several-hundred page Environmental Impact Report on the project. Waugh told council members the report found “no significant effects” to the environment on either of the building projects – as long as a list of mitigation measures are followed.

Hill’s proposal was given significant discussion during the three-and-a-half-hour hearing Thursday night, but City staff said it wouldn’t work for parking, due to the larger footprint being required to maintain the building’s square footage with a two-story design. Legally, the City requires one parking spot per 225 square feet, and staff said that doesn’t allow for enough parking with Hill’s proposal.

Hill said the City could gain extra parking needed by utilizing its new Green Parking Lot and modifying the police department parking area, although Police Chief Christopher Boyd told the council such an arrangement would not be “workable” or safe for his department’s need for secured parking.

[See renderings of the new city hall here: GALLERY: Artistic Images of Proposed New City Hall]

Although about half-a-dozen residents spoke out against the project during the hearing, Councilman Steve Miller said public comment has “flipped” from being 9-out-of-10 opposed to the project, after the City switched its focus away from a smaller hall location on Antelope Road last year.

Lead opponent Tim Schaefer commented in past meetings that the new 10.9-acre Stock Property is “a super-positive development” for the hall proposal, and others have commented favorably that the new location would keep City services in close proximity off Fountain Square Drive. The Stock Property is located just a half-block away from the existing hall, and staff say it’s large enough to allow for a utility yard and future expansion.

[From last year: New City Hall Site Option Draws Support, While Medical Building Criticized]

Concerns about increased traffic, a shrinking $26 million City reserve, and construction noise have continued to be raised by opponents, while supporters have billed the project as good for jobs and a cost-efficient way to replace an aging hall without incurring debt. The project was supported Thursday night by representatives from the Citrus Heights Chamber of Commerce and the Sunrise Marketplace business improvement district.

“I think the time is right, the price is right,” said Councilman Miller prior to casting his vote in favor of the proposal, adding that it’s still an “emotional” decision for him. “I imagine if we bring this place down I’ll shed a few tears, but this is an opportunity for growth for our city and renewal.”

Miller acknowledged the new three-story medical building would make for a “stark” transition from Greenback Lane’s residential zone into its commercial zone, but said “I think this is just too good of a deal to pass up.”

That deal was described by Monica Alejandrez, assistant to the city manager, as “an extremely rare opportunity” for the City, resulting in a “direct investment” of $53 million into Citrus Heights. She said the hall is estimated to cost “no more than $22 million,” with Dignity Health’s new medical building costing about $31 million.

Under the terms of the deal approved Thursday, Alejandrez said the net impact of the new hall to the City’s general fund will only be about $8.9 million after 15 years, largely due to $6.9 million in lease payments coming from the medical building, as well as projected energy savings from a new, more efficient facility.

[Read the lease terms here: http://www.citrusheights.net/844/Project-Documents-and-Reports]

That $6.9 million lease payment from Dignity Health, as well as the promise of 170 new medical-related jobs, has been a significant consideration factor since the deal began being discussed in 2013.

“When you can get more than a fourth of [the new hall] paid for, I think that’s a good deal,” said Councilman Slowey during the meeting. He added that the new hall wouldn’t be under consideration at this point without the Dignity Health lease offer being made on the City’s property. Staff said the assessed value of the existing hall has dropped from a high of over $5 million, to a most recent low point of under $2 million in 2014.

[For background on this story, see: “Planning Commission votes 5-1 for new hall & MOB; lawsuit threatened]

Council members acknowledged both pros and cons to the project, but Mayor Sue Frost said she “doesn’t see how the negatives even stack up” in comparison.

“I think the positives way outweigh the negatives for our City to bring Dignity [Health] to Citrus Heights,” said Frost, although acknowledging that feedback from residents has helped improve the project’s design and location.

“I do want to thank all of our residents who have engaged in the public process,” said Frost, referencing comments received since discussion began about the project more than a year ago. “Without you it wouldn’t have the face that it has, and it wouldn’t be as good as it is.”

The new hall will be constructed by Capital Partners Development Co. and is estimated to take 12 to 14 months to complete, according to Rod Johnson, who initially proposed to develop the Stock Property for the City.

Following Thursday’s vote, Frost said leases will be executed and City staff will begin searching for a temporary location, with demolition and construction work beginning as early as this summer.

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