Grass Valley seeks to recoup redevelopment real estate losses |

Grass Valley seeks to recoup redevelopment real estate losses

The properties that the City of Grass Valley will have to sell. The property at 161 1/2 South Auburn Street, Grass Valley.
John Hart/ | The Union

Members of an oversight board charged with handling the assets of the former Grass Valley Redevelopment Agency exerted influence over the disposal of three downtown properties at a contentious Tuesday night meeting.

“My concern is that we bought high and we’re selling low,” said Terry Lamphier, a member of the Nevada County Board of Supervisors who also sits on a the redevelopment oversight board.

“Or we may not be selling low, but right now the value is low,” Lamphier added. “So the question remains is what is highest potential for recovering basically a million dollars?”

The oversight board was tasked Tuesday with approving or denying a long-range property management plan for the disposal of redevelopment assets.

The move to dispose of the three properties is tied to redevelopment agencies, which were established after World War II to combat urban blight. When Gov. Jerry Brown dismantled the more than 400 redevelopment agencies statewide in 2011 to relieve pressure on the state’s general fund, cities like Grass Valley dissolved their local redevelopment agencies and transferred assets to successor agencies.

Those successor agencies also have oversight board, comprised of taxing agencies of the former redevelopment agency, such as schools and governments.

The three properties poised for sale are located at 161 1/2 S. Auburn St., 168 S. Auburn St. and 114-116 Neal St, and are all located near the Highway 20/49 entrance to downtown Grass Valley.

“The city does have a plan to improve South Auburn and Neal street(s) to enhance the intersection there,” said Grass Valley’s Interim City Manager Jeff Foltz, touching on the original intention of the redevelopment agency’s acquisition of the properties.

Grass Valley staff estimates the properties range in value from $31,594 to $65,430, which when combined would total $192,290 at most. The three properties were acquired for a combined cost of $1.1 million.

“I’ve got some anxiety over a number of things,” said oversight member Donna Fitting, who handles business services for the Nevada County Superintendent of Schools.

When redevelopment agencies were closed, the state mandated that former assets would need to be dissolved. Two of the four options for those disillusions do not apply to Grass Valley, said Donald Fraser, president of Fraser & Associates, which crafted Grass Valley’s property management plan. The successor agency approved that plan at an Oct. 29 meeting and the oversight board was tasked with the same approval Tuesday.

“One of the options was to go directly to sale,” Fraser explained. “We’re not telling (the state) we are going to do that … what we are telling them is that we want to retain them for future use pursuant to what our approved plans are: to be disposed of. It is to sell them, but not to sell them tomorrow.”

Grass Valley hopes that by retaining the properties, the successor agency can negotiate their sale and development along the original plans for the entry-way portion of the downtown, Fraser said.

“It is to sell them, but to give us some flexibility and to try to get the best deal we possibly can,” Fraser explained. “The only way to do that is to retain them.”

If the state approves the Grass Valley successor property management plan, the three properties would be held on the books of the successor agency until decisions are made about what to do with them, Fraser explained.

Fitting responded by asking if Grass Valley leaders could decide to obtain those properties from the trust fund.

“Not without coming back to the oversight board for approval,” Fraser said. “You are now partners in this process. The city can’t act —” Interrupted Fitting: “Partners with very different competing interests in this process.”

Fraser said in response, “The city can’t just cram down and decide it is just going to transfer these at midnight some night. It has to come back to you and you have to approve it. You are a partner in what happens.”

Fitting seemed only slightly relieved by this explanation.

“I understand my role,” she said. “But, unfortunately, I think some of my colleagues may not.”

Foltz jumped in to explain that the city wants to get the “highest and best” uses for the properties to improve the neighborhood and the city’s tax base.

“It is in everybody’s best interest, not just the city of Grass Valley, to market them at their full potential,” said Jan Arbuckle.

But Lamphier expressed an unwillingness to allow the successor agency to handle any potential negotiations without the oversight board’s input.

Ultimately, the board approved the property management plan to eventually dispose of the three properties, but only with at least two members of the oversight board involved.

To contact Staff Writer Christopher Rosacker, email or call 530-477-4236.

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