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City Center project could begin in two years if economy continues to improve

'It's not a matter of if, it's a matter of when'

Coming in 2014 -- or possibly 2015 -- the start of construction on San Ramon's long-awaited City Center.

That's not actually a guarantee, but it's a best-guess prediction from a KPMG retailer survey that says many retailers are looking at late 2014 or 2015 for a substantial improvement in the economy before moving ahead with expansion plans.

Of course, the future of the City Center is up to Sunset Development and its principal executive, Alex Mehran. But a subcommittee of San Ramon's Economic Development Advisory Committee recently reported to city officials on the status of the project and said it will probably go ahead when the timing is right.

"The simple answer is, 'It's the economy.' It's such a big risk for Sunset to develop it -- $850 million was the last estimate we got. That's for the whole project," said Louis Dagen, who chaired the subcommittee. "It also involves taking down Bishop Ranch 2, which is four office buildings, so it's a loss of rent until those buildings go up."

An executive summary presented to San Ramon City Council describes the project as three separate components:

"The Plaza District, is the signature mixed use component including retail, restaurants, and entertainment uses, new residential units, and a hotel, all planned around a large plaza. The Office District is comprised of three new office buildings, and the City Hall/Transit District includes a new City Hall, Library, and transit center.

"Although the project is called City Center, Sunset Development is the developer of the mixed use Plaza District, and the Office District. The City is responsible for the development of the City Hall/Transit District. Sunset Development needs major financial and development commitments in order for the residential and retail components of the project to fuel the start of the Plaza District portion of the City Center project. The office component will occur when Sunset has lease commitments to warrant the construction of new office space," the summary stated.

However, with 2401 Crow Canyon Road now housing the city's police department and permit center, San Ramon could opt for a smaller project.

City Center has been a part of San Ramon's future for nearly 30 years.

"It's been part of San Ramon's planning since 1983, when we were incorporated," Dagen said. "Everyone is obviously frustrated about the fact that City Center hasn't gotten built."

But Dagen said it's wise to hold off for now, pointing toward a similar $800 million project in Sunnyvale that he said not only never got off the ground, but couldn't even sell at a public auction.

Meanwhile, San Ramon has done a fair amount of work, including getting funding to improve the Iron Horse Trail, which runs along the side of the project, and doing preliminary designs for a pedestrian walkway over Bollinger Canyon Road, which would run to and from City Center.

The city stands to rake in some cash when the project is finished.

Contra Costa County gets property taxes from Bishop Ranch under an arrangement made decades ago. The city has negotiated property tax sharing agreements with the county and the San Ramon Valley Fire District that could generate $1,280,000 in annual revenue from City Center when the project is done.

Beyond that, City Center would be a landmark and would finally give San Ramon something all four other cities in the Tri-Valley already have and take for granted: a downtown.

"I'm optimistic that this will get done. It's not a matter of if, it's a matter of when. Sunset is very committed to getting it done right," Dagen said. "It's a matter of having retail commitment and one or more large office tenants and the ability to get financing."

He said that people want to live in San Ramon because of its people, its parks, its safety and its schools.

"As long as those factors still draw people here and as long as Sunset is committed to building a successful downtown, eventually it will get built," Dagen said.

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