1. September, 2004 “Digging the Diggs” City of East Palo Alto Carlos Martinez Redevelopment Director

2. PRESENTATION OUTLINE East Palo Alto Overview Redevelopment Areas Gateway 101 Redevelopment Area Projects Recently completed Ongoing Cummings Lofts Project Description Challenges Solutions Conclusions

3. East Palo Alto  Incorporated in 1983  33,000 residents  60% Latino, 22% African American, 9% Pacific Islander  85% of its families with children use some form of public assistance  1992 Nation’s Murder Capital Brief Overview

4. A City on the Move NOW! Peninsula Times Tribune, 11/27/92 THEN…

5. We’ve come a long way! CHARTING EAST PALO ALTO’S PROGRESS 1983: CITY’S INCORPORATION

6. Gateway 101 Redevelopment Area Base Year: $17 Million

7. University Circle Redevelopment Area Base Year: $7.3 Million

8. Ravenswood Redevelopment Area Base Year: $36.8 Million

9. Regional economy – Unemployment rates San Mateo Co. 5.3% Santa Clara Co.8.4% Statewide6.4% Affecting East Palo Alto – Regional Economy

10. EPA: $48.99Menlo Park:$203.02Countywide: $195.87 City (Menlo Park) hires a business manager to boost revenue – Palo Alto Daily news 8/26/03 East Palo Alto – Per Capita Sales Tax Revenue 1Q - 03

11. EAST PALO ALTO REDEVELOPMENT AREAS 1988 – 1990 – 1993 Ravenswood University Circle Gateway 101

12. GATEWAY 101 REDEVELOPMENT AREA Recently completed: IKEA Ongoing projects: Cummings + Pad “ D” Formed October 20, 1993

13. IKEA Grand Opening! Menlo Park Fire Protection officers treated several shoppers-one slipped and fell, others felt weak after shopping five hours on the 10-acres store. Palo Alto Daily News 8/28/03 Traffic gridlock fails to materialize. Mercury News 8/28/03 Residents see store as boon to East P.A. Mercury News 8/28/03

14. PROJECT PROPOSAL Ground floor retail 2 Stories of housing 21,000 s.f. of retail PROJECT DESCRIPTION: 34 Units Mixed Use Cummings Church – 1 Acre INITIAL CHALLENGES High land value expectation Limited development area Potential site contamination Former nursery? Church relocation Community Benefits

15. 34 Units Mixed Use Project Cummings Church – 1 Acre Good Guys Best Buy Office Depot EXPO CUMMINGS Starbucks CA Bank & Trust & Togo’s McDonald’s

16. Challenges: Housing in former Agricultural Sites Med household income $58K, House price $400  $492K Weeks Neighborhood has former agricultural uses, which left pesticides UNCERTAINTY ?? Liability Regulatory lack of clarity Community suspicion Development costs $$ & time Financing

17. Former Nursery Sites TRIAD APPROACH  791/805 Runnymede - Senior affordable housing - 1.38 acres  855 Runnymede - Transitional affordable housing -0.52 acres  872 Runnymede - 7 single- family homes - 0.84 acres  875 O’Connor Mixed-use Commercial & Residential : 34 lofts & 22K s.f. retail

18. Project Outcomes… thus far  CC&R’s approval (all but 1) for 34 townhomes, 20% BMR  Potential first “tablecloth” restaurant in town (CC&R OK’d)  22,000 sf of retail will add synergy to existing uses  Small business incubator, focus on youth entrepreneurs  Innovative parking mechanism OK’d by fire, bldg.  Potential Construction and retail jobs  Potential Tax Increment  No further action letter received RWQCB  Developer exercised option on property  Cummings Lofts nearing permit approval

19. 34 Units Mixed Use Project Ground Floor Plan – Retail: 21,000 sf

20. 34 Units Mixed Use Project Units and Project Floor Plan Second Floor

21. 34 Units Mixed Use Project Units and Project Floor Plan Third Floor

22. 34 Units Mixed Use Project Units and Project Floor Plan 2nd Floor 3rd Floor

23. 34 Units Mixed Use Project Elevation

24. 34 Units Mixed Use Project Section

25. 34 Units Mixed Use Project Cummings Church – 1 Acre Best Buy Office Depot EXPO CUMMINGS PEDESTRIAN ACCESS INCUBATOR R E T A IL P A R K I N G SITE CONTAMINATION! PKG. LIFTS

26. MAIN ISSUES Land Cost: Creative design + parking system Site Contamination? Triad approach multiple testing Church Relocation: New site found in Menlo Park Community Benefit: Small business incubator, Construction + Retail jobs, Tax Increment Goods and services not available in the community Retail Parking: Amendment of CC&R’s UPCOMING ISSUES First Source Hiring Program Construction Phase: 30% local workers Retail operation: 30% local workers Union Labor Contract Agreement Local Business Enterprise: Local business contracts

27. Conclusions PROJECT DEVELOPMENT STRATEGIES MULTIDISCIPLINARY ENDEAVOR Identify risks Eliminate risk Minimize risk Quantify unavoidable risk to assess impact on return Identify and gain partners to: build project support…sooner rather than later overcome potential hurdles Meet early with partners to discuss project LISTEN to concerns Be open to modify project, be flexible Be creative, persistent and decisive BELIEVE PASSIONATELY IN YOUR PROJECT Digging the Diggs may be often frustrating, but rewarding at the end.

28. Q & A