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Main and First project: The best option?


Photo By: Town Crier Photo illustration using City of Los Altos document
Photo Town Crier Photo Illustration Using City Of Los Altos Document The superimposed rendering shows a proposed three-story building that could be built at the empty lot at Main and First streets in downtown Los Altos. The site is currently empty.

While city officials wait for developer Jeffrey A. Morris to submit final plans for an office-retail building at Main and First streets, questions remain as to whether the city’s process produced the optimal result.

The 0.78-acre site, former site of a KFC franchise, has remained undeveloped since the city purchased the land for parking in 1995. A hotel planned and approved for the site never materialized after the developers withdrew.

The city granted an option to purchase in 2010 to Morris, the son of Mervyn’s founder Mervin Morris.

“Morris is continuing to make plan adjustments to finalize his application,” said Assistant City Manager James Walgren.

Three large stone monoliths remain on the land, a reminder of the city’s aborted effort to erect the 18,000-pound granite chunks as part of the landscaping improvements for the First Street streetscape project.

While currently only in discussion, two plans remain in play – one that calls for a two-story structure with one level of private, underground parking, and another that involves a three-story plan.

According to those close to the discussions, the city would grant Morris a variance on the two-story zoning limit in exchange for the city contributing a second floor of underground parking available to the public. The city would share in the cost of the second level of underground parking. Walgren said he expected Morris to submit the alternative two-story design plan this week.

Meanwhile, longtime downtown property owner Kim Cranston claims that the city acted too hastily in agreeing to the developer’s terms. It could have received a better deal, Cranston contends, had city officials not “misled” councilmembers during the process.

City Councilman Ron Packard, who was mayor last year and active in the discussions, countered that the council was not deceived. He said Morris was the only viable developer during a bad economic time in which two requests for proposals (RFPs) over eight years yielded virtually no interest. Because Morris approached the city informally, Packard said the developer was not subject to the RFP process.

Walgren added: “The city could sell it as surplus property without an RFP or bidding. Even so, his proposal had to meet general zoning requirements, as was required in the RFP, such as an architecturally high-quality project with ground-floor retail and/or restaurants, as well as compliance with the city’s design review criteria.”

While city staff has not acted illegally, Cranston claims the city prevented at least two developers from submitting concrete proposals because they were left with the impression that the city wasn’t open to any bidders besides Morris.

He points to a February 2010 memo drafted by former Economic Development Coordinator Anne Stedler, which claimed there was interest from other developers and that the city should conduct another RFP.

Cranston’s request for the memo, under the state’s Public Records Request Act, was denied. The city acknowledges the existence of the memo but declined to release it, because, according to city Attorney Jolie Houston, draft documents aren’t public record.

The city issued an RFP to potential developers in 2008 but closed it Oct. 31 the same year after receiving approximately five proposals – none of which were acceptable, according to the terms of the RFP.

Nearly a year later, the city received a proposal for an option to purchase from Morris.

According to Walgren, the city’s reasoning at the time was, “Here’s a new, stronger proposal. This is the height of recession. … Here’s an opportunity. Let’s go through with it.”

Walgren, hired by the city in 2001, said there were no concrete proposals when the city entered negotiations with Morris Feb. 23, 2010.

He added the proposed agreement underwent thorough public discussion at council meetings in February and September last year.

“The idea that decisions are being made in private offices is ridiculous,” Walgren said.

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