U.S. Mayor Article

Tenth Street Place: Stimulating Downtown Revitalization and Increasing Government Efficiency

By Mayor Carmen Sabatino, Modesto (CA)
March 18, 2002

The City of Modesto (CA), Stanislaus County and the private sector partnered to create an exciting new government center, complete with retail and commercial elements in a formerly run down area of the city. Tenth Street Place has four integrated components, a six story city/county government building with 228,00 square feet of office space; 28,000 square feet of retail space on the ground floor; a 700 space parking garage; an 18 screen movie theater; 3 restaurants; a retail store front, and a three story private office building adjacent to the parking garage.

The City of Modesto created the Modesto Redevelopment Agency (RDA) in the early 1980's to revitalize the city's core, a once vibrant area that had become a neighborhood of vacant buildings, empty store fronts and silent streets. In 1996, RDA had the chance to implement our vision when the city and the county began to look for joint office space.

The RDA steered the city and county to the mixed-use redevelopment area and a site originally designed by the school district. Although significant modifications would be needed to meet our needs, we liked the concept and moved into the negotiations and planning stages.

In order to make Tenth Street Place work, we split the project into public and private parts. On the public side, a master agreement was negotiated between the city, the county, the Joint Powers Agency, which was created earlier, and the RDA. A disposition and development agreement was negotiated with Civic Partners Modesto.

In 1998, demolition and construction began and a year later, we began to see the first signs of Tenth Street Place, an eighteen-screen theater and a 700 space-parking garage. In November 1999, the city/county building was completed followed six months later by new retail shops. Finally, in 2001, a three-story office building and more retail shops were opened.

As with any project of this scope, we encounter a few bumps along the road. This first delay came when the county released the original developer, prompting a suit for expenses already incurred. The second delay was caused by long standing businesses resisting relocation.

We feel Tenth Street Place is a model for city/county partnerships. I feel our most significant accomplishments thus far are:

Our city and government staffs are literally working side by side. Currently, 650 city and county staff works in the downtown core, sharing everything from conference rooms to copy machines. As a result, two separate governments are identifying and implementing new and integrated ways of doing business.

We've seen an increase in private investment in the downtown core. As of January 2001, 150 jobs have been created as a result of 10th Street Place.

Tenth Street Place has been the impetus for $13 million in private sector "spin off" projects. In addition to more than a dozen restaurant expansions, proposals are under review for new commercial complexes, an IMAX theater, a performing arts center and the conversion of old office buildings into apartments and condominiums.

Tenth Street Place was an ambitious project for a Modesto. The total cost of the project was $74 million and was divided as follows:

The estimated cost, $47.3 million, of the Tenth Street Place building and parking garage was shared between the city and county Joint Powers Agency and the RDA.

The RDA pays two thirds of the public parking and plaza costs with the city and county sharing one-third.

The city and the RDA funded the project separately from the county. The county issued approximately $20 million in variable rate certificates and the city/RDA issued about $61 million in lease revenue bonds.

Total private investment is $26 million, funded by Civic Partners Modesto.

Tenth Street Place has taught me two valuable lessons about partnerships in general. First, evaluate your partners carefully. Examine your mutual objectives and your plans to reach them. Make sure there's a fit. Second, agree up front to a detailed plan to how the partnership will function after initial goals have been met. In our case, how will we work together after the building has been built?

I believe that Tenth Street Place has met the goals the RDA set back in the 1980's. It is a focal point around which development can grow, it brings together various interests to create a high quality mixed use land project and it triumphed over a few large challenges.

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