Process to OK railyard at issue

The opportunity to finally develop the long-dormant, immensely toxic 240-acre downtown railyard into a neighborhood with shops, museums, and housing has put the city in a precarious balancing act.

How do Sacramento officials encourage developer Thomas Enterprises to transform one of the largest infill sites in the country, while keeping sight of the public's interests? How much city incentive is too much?

A line in the sand was drawn recently after the city floated a controversial idea to let railyard building projects bypass reviews by the planning, design and preservation commissions in order to speed the development through the approval process.

Outcry from commission members and residents prompted a compromise, but some remain worried that crucial oversight is in jeopardy.

The new approval process, which would eliminate review by the planning commission, will be considered by that group next week. Ultimately, the City Council will decide whether to adopt the new system.

"This has been pretty disconcerting for everybody, the commissioners and people in the community," said Karen Jacques, a member of the city's Preservation Commission.

"The railyards are so critical to this city and if done right it will be an incredible boon," Jacques said. "The public really does have a role to play. We're the taxpayers and it's our community and we have a process already that's credible and real."

Assistant City Manager Marty Hanneman acknowledges the city is trying to perform a juggling act between Thomas Enterprises – and its interest in streamlining a costly undertaking – and the desire by community members to help shape a key project. He said he believes the city has found the right balance of oversight and innovation.

"We want to ensure we always get community input on any project," Hanneman said. "For the developer, time will be money. We want to do what we can so Thomas or whatever developer knows the process and there are no surprises or gotchas."

Thomas needs about $300 million to start construction. But with a deficit of $45 million to $55 million looming for fiscal year 2008-09, the city isn't able to do much up-front financially, Hanneman said. However, he said there are other carrots the city can provide.

For example, the city has agreed to let Thomas provide 51 acres of parks and open space rather than the 110 acres that normally would be required under city guidelines based on the projected population for the new community.

City leaders also are considering reducing the $17 million Thomas normally would owe up front in park impact fees.

The city last year put together a deal to provide Thomas $55 million so the developer could finalize its purchase from Union Pacific. And since then, at Thomas' behest, the entire railyard plan is moving at warp speed through city channels to allow it to compete for state bond money to build streets and other infrastructure.

The basic development plan is slated to go before the City Council in December.

Over the years, the city has watched as potential development suitors for the railyard, a Superfund toxic cleanup site, showed interest but then withdrew. Thomas has remained committed, spending six years and $40 million in planning, negotiations and legal expenses.

The developer is proposing an urban community that would include a regional transportation hub, renovation of the historic railroad shops and 12,000 housing units.

Suheil Totah, vice president of Thomas Enterprises, said that while the approval process is moving quickly now, the project has been years in the making. For the company, he said, it's high time to secure approvals so it can seek funding from the state and other sources, and market the site to potential tenants.

"We've had hundreds of meetings with community groups. We believe the project has been vetted," Totah said.

At Thomas' request, the city began looking at streamlining its project approval process last spring. The newest version would require developers to go before the design board or preservation commission to discuss their plans before filing an application. That would allow public input and early detection of troublesome aspects, said Greg Bitter, the city planner overseeing the project.

About the writer:

• Call The Bee's Terri Hardy, (916) 321-1073. Staff writer Mary Lynne Vellinga contributed to this report.