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Claremont Transforms Blighted Area Using Innovative State-Local Partnership

Tax Increment Financing Provided Backbone of the Funding

First Street Before Construction
April 5, 2013
Note: With job creation on the minds of public officials across California, the power of state-local partnerships in creating good paying construction and other private sector jobs merits attention. This is part of a series of special papers on some successful partnerships.
 
Parts of Southern California grew early in the last century in part because of the region’s rich citrus industry. When it went into decline, however, it left a hole adjacent to the city of Claremont’s downtown that had once been its hub, creating a virtual ghost town by the early 1970s. That once blighted district ultimately became a vibrant part of the city through careful planning and the leveraging of private investments through a state and local funding partnership. The transformation of these 35 acres is showcased in Claremont’s Strong Cities | Strong State profile because it has had a dramatic impact on the city, region and state. 

They say that Rome was not built in a single day and neither was what ultimately became Claremont’s Village Square. It took nearly 30 years, and it simply would not have happened without the flexible tool of tax increment financing (TIF) that used state and local funds to assemble parcels of land, construct critical public infrastructure and leverage private investment over the three decades. These steps helped create a new dynamic multipurpose retail/commercial/residential zone.
 Packing House
The area during its heyday included three packing houses, two ice plants and workforce housing. But when Claremont’s population began to rapidly expand in the 1950s, fields of orange and lemon trees were replaced by tracts of housing. The packing and storage facilities adjacent to downtown Claremont were no longer needed, and by the early 1970s the entire industry was gone.
 
The city of Claremont faced a difficult challenge because this section of town lacked basic infrastructure, including sufficient utilities or real streets. For about two decades, part of the area served as a city yard. One of the old packing houses became storage. Someone bought the ice plants and rented out the space to businesses that needed cold storage. These were all temporary uses because the area lacked fundamental infrastructure.
 
Director of Community Development Brian Desatnik has been with the city of Claremont for approximately two decades and was involved closely in the city’s efforts to revitalize the area.
 
“We didn’t have a plan in 1999, but we realized that this area is important to the community so we started on a process to develop one. It took about two years to engage Claremont residents and come up with a plan. It was so important that our planning commission dedicated one meeting a month to this project,” said Desatnick.
 
“Historic preservation also was a big planning issue because there was a strong desire to reuse some of the old industrial buildings. There were no real streets there, just some dirt roads, and we had to figure out how to connect it to the other side of the Village,” continued Desatnick.
 Residential Townhouses
The land use plan laid out the area’s commercial spots and identified how to create mixed-use retail, housing, and parking. Engaging three separate developers, the first phase of the project began in 2004 when construction started on the first of 171 new townhomes. The 477-space parking structure followed in 2007 along with the transformation of one of the old packing plants into a mixed use development featuring 16 live-work lofts in an adaptive reuse of a packing house. By the following year, the commercial buildings were in place along with the hotel and theater. The five commercial buildings have retail on the first floor and office space above.
 
This transit-oriented development project was accomplished with funding from a variety of federal, state and local revenues. The city was able to secure a $4.2 million Federal Transit Administration grant to help fund the parking structure because it’s designated as a Park and Ride location for Foothill Transit and the entire project is adjacent to both the Metrolink and bus depot and will ultimately be the site of the Gold Line Station. Street improvements were funded through $700,000 of the city’s allocation of state as tax revenues. Another $800,000 came from the Los Angeles County Metropolitan Transportation Authority. It was TIF funding, however, with the direct financial participation by other local agencies and the state (which shouldered the school district’s contribution), that provided the most substantial piece of the funding package — $8 million for the parking structure, open space and street improvements.
 
Desatnik says that this project has put Claremont on the map regionally. “We’re more of a destination now. We knew that if we did nothing to our downtown it would dry up. I think we underestimate the ability of suburban communities to create real urban environments that draw people, but they can.”
 
“I’m really proud that we took the time to preplan and create a workable plan that thought about what people like to do and move through an area to create an urban environment that respects the history.”
 
The community development director worries though that this project wouldn’t be possible if the city started today. Cities, he says, have their hands tied because there aren’t any tools that enable cities to assemble abandoned plots of land and finance improvements.
 
“We were able to provide funding for infrastructure and leverage other public and private investments in the development through TIF revenue. That whole system is gone. There is no way to pay back public investment in infrastructure to get a project like this to work. We built the parking structure knowing we’d issue bonds and create a project that would create revenues and that would help pay the bonds back. How do you do compact urban development, which is what sustainable and what is being promoted, without these tools? You can’t really.”
 
Desatnik is optimistic about the future and believes that state lawmakers will ultimately find a way to help cities eliminate blight, build affordable housing and promote infill development. “I can’t believe a form of tax increment financing won’t come back because it’s contrary to so many of the smart growth policies.”

Please also see the Claremont legislative drop piece.


 
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