On free concert nights, downtown Redwood City buzzes with people in its historic Courthouse Square. City officials see this as proof that an ambitious, $50 million downtown revitalization project is working.
Empty storefronts, struggling merchants and the fiscal challenges facing Redwood City’s historic Fox Theatre downtown tell a different story.
Bob Bryant, who has owned Bob’s Courthouse Coffee Shop for 20 years, said the free cultural events have not translated into increased business for merchants. Bryant sued the city in 2007, claiming the drawn-out overhaul of the downtown area hurt his business. The lawsuit was later dismissed.
“Over the last two years, I’ve been the only business on this block. It seems like nothing but empty buildings,” he said.
Bryant’s business is down 50 percent. While he acknowledges that is it mostly due to the economic downturn, the city is not without blame, he said.
“I had 20 employees a year and a half ago and I’m down to eight. I’m not doing very well,” he said. City officials are not being aggressive enough in filling empty storefronts or encouraging retail establishments to move downtown, he said.
“There’s nothing to come down here for except to eat. There’s no retail,” he said. “The parking is atrocious. Older citizens tell me they can’t come downtown and park and have a nice breakfast with friends because they have to worry about the parking.”
Downtown Redwood City charges 50 cents an hour for parking. It may seem like a bargain by San Francisco standards, but it represents a handicap for merchants when San Carlos and Menlo Park offer free parking in their downtowns, said restaurateur John Kim, who owns Talk of Broadway.
“If a customer comes into my restaurant, I feed their meter no matter what,” Kim said. “I don’t want them to get a ticket and decide not to come back. I don’t want to lose business over 50 cents.”
Kim said his revenue has fallen 5 percent since the economic downturn.
“This is a hard time for everybody,” he said. “It’s very hard to say if the city is doing wrong or right. I think it’s too early to see the results.”
Downtown Redwood City is doing better than many of its counterparts, said Ben Paul of NAI BT Commercial, who heads the economic development efforts for the Redwood City Chamber of Commerce.
“The vacancy rate is lower than some of the other downtowns. For now, it seems to be doing okay,” Paul said.
According to a report produced by NAI BT, downtown Redwood City’s commercial vacancy rate for the second quarter of 2009 was at 11.8 percent — up from a 10.5 percent vacancy rate during the same quarter one year prior and a 7.1 percent vacancy rate during the second quarter of 2007.
City officials have focused on development to revitalize the downtown area. In 2006, a 20-screen theater, restaurant and retail shops and a two-story parking garage opened in the city center. The old courthouse was renovated, its glass dome changing color at night to illuminate the square below.
Redwood City’s downtown plan, adopted in May 2007, encompasses a three-block radius of the historic courthouse. It outlined the city’s need to bring in downtown housing, concentrate retail uses on Broadway and near Caltrain, and increase the area’s walkability.
Weeks later, however, a property owner sued the city, claiming the environmental documentations for the Downtown Precise Plan failed to address issues related to taller buildings casting shadows on other properties, or the protection of historic structures during a development boom. In 2008, a judge agreed the environmental report was legally inadequate.
In May of this year, the City Council announced it would rewrite parts of the review instead of engaging in a costly and time-consuming legal battle.
That review is nearly done, and Redwood City is moving forward and is already showing results, Mayor Rosanne Foust said. She touted downtown events, the new movie theater and the thriving restaurant scene.
“Anything that’s worthwhile takes time. People who haven’t been in Redwood City for a few years are amazed,” Foust said. “If you go to any downtown right now, you’re going to have empty spaces. But the people see Redwood City very differently than they used to. They see it as an opportunity, and we want to capitalize on that.”
Foust said a business-friendly city council, proximity to Caltrain and diverse economic base that includes biotech, construction and technology puts Redwood City in a better position than other Bay Area municipalities.
She described the auctioning of the Fox Theatre as unfortunate, but said it doesn’t represent a crushing blow to the revitalization efforts downtown.
“The Fox Theatre is part of Redwood City history. We’ve always wanted it to be successful. But you have to understand the current economic climate, and the owners have a serious debt load,” Foust said. “I look at it as one piece of the puzzle, one spoke on the wheel, one value added to the whole picture.”
Limited parking meter revenue puts Redwood City in a hole
Perhaps nothing represents the economic anxiety surrounding Redwood City like its parking meters.
During the heady height of the city’s revitalization three years ago — the opening of a multiscreen movie theater and retail complex — planners expected parking meters and the city’s two garages to generate enough money to more than pay for themselves.
But instead of making the expected $2.4 million the first year, parking only generated $937,665 in revenue, leaving the city responsible for the discrepancy. This year, the city is on the hook for more than $1 million, which will come out of its general fund.
So far, there is no plan to soak up the deficit and the City Council is taking a “wait-and-see” approach, said Brian Ponty, director of finance for Redwood City.
“I would hope that as the economy recovers and the vacancies are filled up and we have more people visiting the downtown area, that will bring in parking revenues,” Ponty said.
Raising the fees from the current 50 cents an hour appears to be unpopular with city policymakers.
“The council made a policy decision to set rates where they are. We don’t want to do anything that further impedes the progress of downtown,” Ponty said.
Earlier this month, the council elected to cut $1 million in city services and increase business license fees to absorb some of the deficit.
City officials may have been overly confident in their hopes for a boon from parking fees.
“When projections were prepared three or four years ago, we were starting from scratch. We didn’t have the cinema complex downtown. Then we hit a rough spot in the economy, with people being more sensitive to how much they were being asked to pay for parking,” Ponty said.
Downtown Redwood City, by the numbers</h3>
Redevelopment dollars spent on nonhousing projects and programs related to downtown Redwood City from 2004 to 2007
Cost of Courthouse Square preservation project
Shops, restaurants and businesses
Screens at the Century movie theater
Seats in the Fox Theatre
Room to spare
Downtown Redwood City’s vacancy percentage rates have increased since spring 2008.
6.7 in Q1
7.1 in Q2
5.4 in Q3
5.8 in Q4
5.7 in Q1
10.5 in Q2
12.8 in Q3
13.3 in Q4
12.5 in Q1
11.8 in Q2
Source: NAI BT Commercial
Sales tax from downtown Redwood City dropped last fiscal year.
Fiscal year 2006-’07
Fiscal year 2007-’08
Fiscal year 2008-’09
Source: Redwood City, City Manager’s Office