Thursday, March 24, 2022
5:00 PM
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
Remote Meeting
Council Economic Development Committee
Agenda
March 24, 2022Council Economic Development
Committee
Agenda
COVID-19 Notice: Consistent with Assembly Bill 361, the Council Economic Development Committee meeting includes teleconference participation by all Committee members and the public.
Please note that we are now using the Zoom Webinar platform to conduct meetings and receive live public comment.
How to submit written Public Comment:
Send an email to [email protected] by 2:00 p.m. the day of the meeting. Please identify the Agenda Item Number in the subject line of your email. Emails will be compiled into one file, distributed to the Council Economic Development Committee and staff, and published on the City's Meeting & Agenda Center under Documents Received After Published Agenda. Written comments received after 2:00 p.m. that address an item on the agenda will still be included as part of the record.
How to provide live Public Comment during the meeting:
Please click the link below to join the webinar:
https://hayward.zoom.us/j/83501719902?pwd=L3ZJS2pWU0xKejNIMnNud0VUM1JTQT09 Passcode: CEDC-Mar22
Or
Dial: +1 669 900 6833
Webinar ID: 835 0171 9902
Passcode: 5463925699
A Guide to attend virtual meetings is provided at this link: https://bit.ly/3jmaUxa
CALL TO ORDER
ROLL CALL
PUBLIC COMMENTS:
(The Public Comment section provides an opportunity to
address the City Council Committee on items not listed on the agenda as well as items on the agenda. The Committee
welcomes your comments and requests that speakers present their remarks in a respectful manner, within established time limits, and focus on issues which directly affect the City or are within the jurisdiction of the City. As the Committee is prohibited by State law from discussing items not listed on the agenda, any comments on items not on the agenda will be taken under consideration without Committee discussion and may be referred to staff.)
March 24, 2022Council Economic Development
Committee
Agenda
APPROVAL OF MINUTES
Approval of Minutes from February 24, 2022 Regular MeetingMIN 22-0391.
Attachments: Attachment I Draft Minutes from the Feb. 24, 2022 Regular Meeting
REPORTS/ACTION ITEMS
Hayward Sales Tax Trends Update from Avenue Insights &
Analytics (Oral Report Only)
RPT 22-0332.
Program and Ordinance Update: Vacant Property Ordinance Monitoring Program & Property Owner Engagement Strategy RPT 22-0303.
Attachments: Attachment I Staff Report
FUTURE AGENDA ITEMS
Future Meeting Topics as of March 24, 2022RPT 22-0324.
Attachments: Attachment I Future Meeting Topics as of March 24 2022
COMMITTEE MEMBER/STAFF ANNOUNCEMENTS AND REFERRALS
ADJOURNMENT
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: MIN 22-039
DATE: March 24, 2022
TO: Council Economic Development Committee
FROM: Assistant City Manager
SUBJECT
Approval of Minutes from February 24, 2022 Regular Meeting
RECOMMENDATION
That Committee members review and approve the Regular Meeting Minutes from February 24, 2022.
ATTACHMENTS
Attachment I Draft Minutes from the February 24, 2022 Regular Meeting CITY OF HAYWARD Printed on 3/18/2022Page 1 of 1
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COUNCIL ECONOMIC DEVELOPMENT COMMITTEE
MEETING MINUTES – February 24, 2022
CALL TO ORDER: The Regular meeting was called to order at 5:00 p.m.
ATTENDANCE (September 2021-July 2022):
Committee Member
Present
2/24/2022
All Meetings
Year to Date
Meetings Mandated
By Resolution
Present Absent Present Absent
Council Member Salinas 3 0 3 0
Council Member Wahab 3 0 3 0
Council Member Andrews 3 0 3 0
OTHERS IN ATTENDANCE:
Kelly McAdoo, City Manager; Jennifer Ott, Assistant City Manager; Sara Buizer, Deputy Director of Development Services; Paul Nguyen, Economic Development Manager; Catherine Ralston, Economic Development Specialist; Suzanne Philis, Senior Secretary; Todd Falduti, Southland Mall Sr. General Manager, Asset Management; Kim Huggett, Hayward Chamber of Commerce, Paul Hodges, HARD Board of Directors; Edward Bogue; Rachel McCown; HWD; Carlamill
PUBLIC COMMENTS
Hayward Chamber of Commerce President and CEO Kim Huggett gave an update of Chamber events and activities including the 78th Annual Chamber Gala happening at Life Chiropractic College West on March 26th at 4pm.
Council Member Wahab asked Mr. Huggett if he ’d received any feedba ck from merchants regarding the City’s consideration of closing some downto wn streets to cars and put ting tables and chairs out for retail patrons. Mr. Huggett said there was support for widening sidewalks and putting out tables, but downtown business owners on Main Street were unanimously against closing the street. He cited the success of the sidewalk reconfiguration in front of Casa Del Toro. C ity Manager McAdoo assured the Committee that Public Works staff would continue to do outreach.
1. APPROVAL OF MINUTES OF REGULAR MEETING JANUARY 27, 2022
A motion to approve minutes from the January 27, 2022 Regular Meeting was made by Council Member Andrews and seconded by Council Member Wahab. The minutes we re unanimously approved.
Hayward Council Economic Development Committee
Regular Meeting Minutes
February 24, 2022
2. A REPORT FROM BROOKFIELD PROPERTIES RETAIL GROUP ON THE ECONOMIC HEALTH, CURRENT TRENDS, AND FUTURE OF SOUTHLAND MALL (Oral report only)
Economic Development Manager Paul Nguyen introduced Todd Falduti, Southland Mall Sr. General Manager, Asset Management who gave the presentation.
Council Member Andrews asked for an assessment of safety at the mall . Mr. Falduti said that crime happe ned everywhere and noted the National Retail Fede ration tracked organized retail crime and reported in 2015, 20-25% of retailers estimated their average loss was $1,000. In 20 19, he said, that number had climbed to 50% of retailers and today, he thought it would be even higher. As tough as losses were to any business, he said, they were not worth any lives.
Mr. Falduti noted that Southland Mall had a gun -detection dog as a perm anent safety feature starting that Saturday. Word gets out, he s aid, and in three m onths any guns would disappear. He said he wanted to shift shoppers’ perception, so they fel t safer. He noted the security company hired was better quality than the one used for the trial period.
Council Member Andrews asked about coordination of parking lot security. Mr. Falduti said only Sears and Round 1 had exterior private security, although he noted he had asked several owners of mall jewelry stores to have armed escorts for their workers.
Council Member Andr ews asked if outward facing retail and food options would be part of the parking lot revitalization. Mr. Faldu ti noted Shiekh Shoes and Forever 21 by Lot 1 already had direct access and although he had two restaurants teed up for the outward facing corner of Entry 4, when he couldn’t secure the third vendor, the other two walked. He noted Hayward Police was now being considered for one of the four spots. Mr. Falduti said the American One wall was the next planned area for improvement with some junior retail boxes.
Council Member Andrews asked if there might be other ways to activate the wall in the meantime and she suggested “Instagrammable” images. Mr. Falduti explained that right now those are the back rooms to exis ting tenants so flipping them around wasn ’t possible. He al so noted that Brookfield’s areas of full control of parking lots were limited by existing leases. He said the most prominent area Brookfield had total con trol over was in front of J C Penny facing the freeway along La Playa.
Regarding events in the area facing the freeway, Mr. Falduti mentioned that when he oversaw both Newpark Shopping Center and Southland Mall, Newpark wanted events but couldn ’t draw them.
Now he said he was trying to attract all events to Hayward.
Council Member Andrews encouraged Mr. F alduti to f ocus attrac ting entertainment venues for kids and young adults that didn’t serve alcohol. She said she’d like to see a selfie experience with no alcohol.
Mr. Falduti said he had a selfie vendor during the holidays but because Custom Kings was d oing Hayward Council Economic Development Committee
Regular Meeting Minutes
February 24, 2022
so well it expanded to that space. He said he was thinking about where an escape room or laser tag could locate at the mall.
Council Member Wahab thank ed Mr. Falduti for th e update and noted the ma ll had changed and improved. She mentioned that a mall in Campbell ha d been converted to a housing development and she asked if there had been a ny discussions about housing at Southland. She also asked what impact the new housing development at the former Burlington Coat Factory site might have on the mall.
Mr. Falduti he didn’t know if the new DR Horton housing would make a d ifference either way , but liked the walkability of the location.
Mr. Falduti said according to the National Retail Foundation, 25% of shopping malls would be gone by 2032. He said he didn’t think that was a bad thing and the “Live, Work, Play” model was working in high density areas. Mr. Falduti said housing could be a component at Southland, noting the mall was 29 acres near a major freeway, but under the airport flight path. He said Brookfield definitely wanted to repurpose the Sears building a nd he supposed condos could be built over new restaurants but acknowledged that wasn ’t his area of expertise . Brookfield had experts and they would partner with the mall when that time came, he said.
Council Member Wahab said she wanted diverse restaurant choices and plenty of parking , noting the recent protests a Valley Fair in San Jose.
Mr. Falduti mentioned that the mall had an additional 100,000 square feet of space under the ma ll that could be used for parking, but noted it w asn’t needed yet . He said the most common complaint he received about Southland was the poor signage marking the entrances to the mall.
Council Member Wahab mentioned that she had famil y members who had retail space a t a mall, and when the y were first getting started there was no transparency to the cost of becoming a tenant. With eCommerce growing so q uickly, she asked how the mall could incentivize entrepreneurs to not only stay in Hayward, but open brick and mortar locations at the mall.
Mr. Falduti said when he first started working with malls, leases were true triple net. He acknowledged tenants just want ed to know the cost per s quare foot based on base rent and operating costs with only insurance rates and real estate taxes changing without notice. He said in 2018, the property tax on the mall was $1.8 million, in 2020 $3.05 million . He didn ’t have any control over that, he said, and his tenants had to deal with the reconciliation of those costs. He said he tried to be transparent with new tenants and told them abo ut additional costs to expect including trash collection and internet service.
Council Member Wahab asked Mr. Falduti to let the City know how it could help including with things like internet infrastructure. Mr. Falduti said Brookfield just rep laced the mall ’s fiber backbone. Council Member Wahab said she ’d like to see workspaces in the mall so people could work, walk, and shop.
Hayward Council Economic Development Committee
Regular Meeting Minutes
February 24, 2022
Council Member W ahab cautioned about bringing any p atrol dogs into t he mall noting a rec ent incident at a mall in Brentwood. She did advocate for staff escorts to their cars at night.
Mr. Falduti explained the patrol dog at Southland Mall was only temporary and n oted while on duty was able to st op a fight that involved si x people. He noted the dog ar riving on Saturday would be gun -detection only and agreed that the mall was too crow ded to have a dog that b ites defensively.
Council Member Wahab asked Mr. Falduti to please be sure to share any retail incentives being offered with Council Members so the y could pass on the information. She also encouraged Mr.
Falduti to incorporate public art into the mall as much as possible.
Regarding incentives, Mr. Falduti said the American Dream was still alive at the mal l with immigrant retailers thriving with a make or break it work ethic. He said the mall wa s set up to grow with new retailers by having smaller rent structures where they could start. He said Brookfield was more than happ y to assist a business coming in w ith a new concept. That was the kind of succe ss s tory they wanted to be part of with the Empower Program—to assist new businesses with coaching and walking them though the process of starting up.
Council Member Salinas said as a shopper it was fun to se e businesses move from a cart to a kiosk to retail space rather than to online. Mr. Falduti mentioned that that was how Shiekh Shoes started and now the owner had hundreds of stores. He was just a small owner operator out there hustling, he said.
Council Member Salinas mentioned he saw the dog patrolling the mall with a guard in full gea r and he remembered it looked really menacing and kind of shocking. Mr. Falduti said they were working to find the right handler and to determine the best way to interact with the public and still be able to deescalate situations.
Regarding Southland’s interior improvement White and Bright Program, Council Member Salinas said he had noticed a big difference and the mall looked great. He said he would now like to see the mall adopt a theme that could be carried out through the mall. Since the mall was located next to the airport, he suggested either an aviation or transportation theme.
Mr. Falduti asked Council Members if they re membered when the mall had a big bird cage . He acknowledged that the mall needed some pops of color and points of interest. He also noted that all soft seating was pu lled at the start of the pandemic and that rather than bringing back the old seating he was pushing for approval of new.
Council Member Salinas said he liked the nostalgic vibe of Southland and folks who moved away from Hayward asked if the bird cage was still there. He mentioned that the previous mall manager made Southland t-shirts and that he wanted one. Mr. Falduti said the mall w as old—no, vintage— and that he’d like to make other improvements in addition to the new soft seating and public art.
Hayward Council Economic Development Committee
Regular Meeting Minutes
February 24, 2022
Council Member Salinas mentioned the education market and noted when he asked his students what they did over the weekend , they never ment ion Southland. He asked how the City could capture that market, and agreed with Council Member Andr ews that more activities and options were needed for teenagers. He suggested Friday night events like a DJ in the food court or something that made the mall a safe destination.
Mr. Falduti said he ’d looked at a lot of options for youth-oriented attractions at the mall including in the underground area, but finding a successful use was hard. He noted teens were very different from college-aged students. He sai d he would kill for a Lego Store, because he ’d love to hold a building contest, and a Canadian Goose store where customers could try on a jacket and step into the blizzard room to see if it kept them warm. He was always hunting for the kind of retailers th at would attract the curious even if they didn’t buy anything, he said.
Mr. Falduti mentioned that a large sports memorabil ia store was coming in where Dick ’s Sporting Goods was located. He was also talking to traveling museum experiences and exhibits like the Human Body, which would attract college-age visitors.
Council Member Salinas said he would love to see a roofto p rest aurant on the old Sears building because of all the things you could see including the airport and the freeway.
Council Member Sali nas thanked Mr. Falduti for the upd ate and said neighbors had expressed concern to him about safety and noise from concerts. Mr. Falduti explained that the Sears site was not under his con trol but that he was working with the owner to install better ligh ting. He said the goals of the community were his goals.
Council Member Andrews thanked Council Member Wahab for mentioning public art. She also asked Mr. Falduti to send her artwork for the Empower Program in a format she could share on Instagram and to consider promoting the program at a Chamber of Commerce event.
3. FUTURE MEETING TOPICS AS OF FEBRUARY 24, 2022
Economic Development Manager Nguyen highlighted upcoming reports including a sales tax leakage report in March and a vacant property update from Code Enforcement.
Council Member Salinas asked staff to research where college students were spending their dollars.
COMMITTEE MEMBER ANNOUNCEMENTS AND REFERRALS
Economic Development Manag er Nguyen and Economic Development Specialist Ralston highlighted new businesses including El Vozqe, Habibi ’s Birr ia, Club SC, Brick by Brick, Falafel Flame, Tacos El Gordo, Arteaga’s Food Center, and the new La Victoria Taqueria.
ADJOURNMENT: The meeting was adjourned at 6:26 p.m.
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: RPT 22-033
DATE: March 24, 2022
TO: Council Economic Development Committee
FROM: Assistant City Manager
SUBJECT
Hayward Sales Tax Trends Update from Avenu Insights & Analytics (Oral Report Only)
RECOMMENDATION
That Council Economic Development Committee (CEDC) members receive the presentation from Avenu Insights & Analytics Client Services Manager Tom Adams who will provide an update on the latest sales tax trends.
SUMMARY
Tom Adams is a Client Services Manager with Avenu Insights & Analytics. Avenu, a city consultant, provides local government clients with revenue enhancement services such as audits for sales tax, business license tax, utility users tax, and hotel tax. Mr. Adams works in the sales tax division with clients throughout California. At the March CEDC meeting, Mr. Adams' presentation will provide:
· an update on the current sales tax trends in the City of Hayward · compare trends from pre-, during, and post- pandemic timeframes and · present information on retail leakage data.
Before joining Avenu, Mr. Adams worked in municipal government in a wide variety of roles for close to 20 years. Mr. Adams began his career with the City of San Jose and he has worked for San Francisco, San Rafael, and several other cities in economic development and analyst roles. Mr. Adams is a UC Berkeley graduate and earned a Master’s degree in Public Policy from the University of Texas, Austin.
CITY OF HAYWARD Printed on 3/18/2022Page 1 of 1
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CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: RPT 22-030
DATE: March 24, 2022
TO: Council Economic Development Committee
FROM: Assistant City Manager
SUBJECT
Program and Ordinance Update: Vacant Property Ordinance Monitoring Program & Property Owner Engagement Strategy
RECOMMENDATION
That the Council Economic Development Committee (CEDC) reviews this update on the Vacant Property Monitoring Program and Ordinance and provides feedback to staff.
SUMMARY
Prior to adoption of the Vacant Property Monitoring Program and Ordinance (VPM), there were three key elements affecting staff's ability to conduct enforcement on abandoned residential properties: (1) knowing when a property has been vacated; (2) knowing who the current owner or authorized representative might be and how to effectively and timely communicate with him or her; and (3) determining the minimum standards for maintenance, security, boarding and site conditions that apply.
Adopted by the Council on October 29, 2019, under Article 29 - Vacant Property Ordinance, the new ordinance and monitoring program established general standards and compliance policies to assure accountability for neglected vacant properties, combat nuisance and safety concerns, ensure public safety, and encourage economic development through owner engagement.
In March of 2020, proactive inspections and administrative tasks associated with the VPM were placed on hold due to COVID-19 and Code Enforcement staff being reassigned to emergency duties related to the pandemic response. As Emergency Operation assignments leveled out in October of 2020, administrative tasks and proactive field investigations associated with vacant properties were re-initiated with a focus on vacant property locations that presented an elevated level of safety concern to the public.
Code Enforcement staff have been engaged at ensuring the VPM continues on a successful path by establishing effective monitoring policies and procedures that allow effective observance and monitoring of vacant properties throughout the City.
ATTACHMENTS
Attachment I Staff Report
CITY OF HAYWARD Printed on 3/18/2022Page 1 of 1
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DATE: March 24, 2022
TO: Council Economic Development Committee
FROM: Assistant City Manager
SUBJECT: Program and Ordinance Update: Vacant Property Ordinance Monitoring Program & Property Owner Engagement Strategy
RECOMMENDATION
That the Council Economic Development Committee (CEDC) reviews this update on the Vacant Property Monitoring Program and Ordinance and provides feedback to staff.
SUMMARY
Prior to adoption of the Vacant Property Monitoring Program and Ordinance (VPM), there were three key elements affecting staff's ability to conduct enforcement on abandoned residential properties: (1) knowing when a property has been vacated; (2) knowing who the current owner or authorized representative might be and how to effectively and timely communicate with him or her; and (3) determining the minimum standards for maintenance, security, boarding and site conditions that apply.
Adopted by the Council on October 29, 2019, under Article 29 - Vacant Property Ordinance, the new ordinance and monitoring program established general standards and compliance policies to assure accountability for neglected vacant properties, combat nuisance and safety concerns, ensure public safety, and encourage economic development through owner engagement.
In March of 2020, proactive inspections and administrative tasks associated with the VPM were placed on hold due to COVID-19 and Code Enforcement staff being reassigned to emergency duties related to the pandemic response. As Emergency Operation assignments leveled out in October of 2020, administrative tasks and proactive field investigations associated with vacant properties were re-initiated with a focus on vacant property locations that presented an elevated level of safety concern to the public.
Code Enforcement staff have been engaged at ensuring the VPM continues on a successful path by establishing effective monitoring policies and procedures that allow effective observance and monitoring of vacant properties throughout the City
BACKGROUND
Prior to adoption of the Vacant Property Monitoring Program and Ordinance (VPM), there were three key elements affecting staff's ability to conduct enforcement on abandoned residential properties: (1) knowing when a property has been vacated; (2) knowing who the current owner or authorized representative might be and how to effectively and timely communicate with him or her; and (3) determining the minimum standards for maintenance, security, boarding and site conditions that apply.
The VPM was created with the goal to address identified concerns that cause difficulty in regulatory compliance, as well as address root causes contributing to the neglected and deteriorating conditions associated with vacant properties.
Adopted by Council on October 29, 2019, under Article 29- Vacant Property Ordinance, the new ordinance, and monitoring program established general standards and compliance policies to assure accountability for neglected vacant properties, combat nuisance and safety concerns, ensure public safety, and encourage economic development through owner engagement.
While the new ordinance and associated monitoring program were meant to be fully active at the start of 2020, the start of 2020 began with a world pandemic essentially placing a hold on newly adopted programs as local jurisdictions activated Emergency Operations Centers in response to growing health and safety concerns.
In March of 2020, proactive inspections and administrative tasks associated with the VPM were placed on hold pending further direction from the Development Services Director and executive staff due to the newly emerging state of emergency related to COVID-19 and Code Enforcement activation under the City’s Emergency Operation Plan for COVID-19 education and compliance support.
As Emergency Operation assignments leveled out in October of 2020, administrative tasks and proactive field investigations associated with vacant properties were re-initiated with a focus on vacant property locations which presented an elevated level of safety concern to the public.
Code Enforcement staff have been engaged at ensuring the VPM continues on a successful path by establishing effective monitoring policies and procedures which allow effective observance and monitoring of vacant properties throughout the City.
DISCUSSION
The remainder of this staff update is broken into the following sub-sections:
Retail/Commercial Vacancy Trends Update – To provide context on the current state of retail/commercial space vacancies.
Monitoring and Tracking Update – Data is provided detailing vacant property monitoring and tracking activities to date.
Inspections and Compliance Update – Data is provided on staff inspections and fees levied through the program.
Overview of the Three-Pronged Approach to Property Owner Engagement – Engagement strategies of both Code Enforcement Division, Economic Development Division and joint efforts are detailed in this section. This section also includes an example of a successful case study.
Retail/Commercial Vacancy Trends Update
Currently, the vacancy rate for all retail space citywide is at 2.9% with the average rate for rent at $2.32 per square foot. On average, a vacancy rate below 4% is considered a tight market in that there are few spaces available for new tenants to move into the city or existing businesses to grow or move to other suitable locations. In the table below, staff evaluated the current vacancy rate and compared it to one year ago during the middle of the pandemic and two years ago, just prior to the pandemic. Overall, the vacancy rate has increased 1%; however, some corridors such as Tennyson and the Downtown have seen a drop in vacancy while others such as Hesperian and Mission North have seen significant increases in vacancy.
The 8.1% vacancy along the Hesperian is due to the large box vacancies at the former Toys R Us site and the small shopping center Oliver Corners, located at the southeast corner of Hesperian and W. Winton, which is anchored by Harbor Freight. Along the Mission North corridor, which is from Downtown to the City limit line, the 11.2% vacancy is due to several large commercial buildings on the east side of Mission Blvd. The Hayward Fault runs through these parcels. As a result of the Alquist Priolo Act, which prohibits major improvements or reconstruction of new facilities on these parcels, owners are unable to do any significant upgrades over 50% of the building value. Since most of these buildings are now empty shells or former auto related uses, major improvements are needed to meet new commercial standards. Mission South corridor is showing the third highest vacancy rate of 5.4%.
However, this is due to several new commercial tenant spaces being constructed and the old Kmart site being upgraded. It is expected that most of these spaces will be leased in the near future.
Current Vacancy Rates
Area/Corridor Total
Inventory
Square
Feet (SF)
Under
Construction
Vacancy
Rate
(Q1,
2022)
Current
Asking
Rent
Citywide 7.8 Million
SF
60.7 K SF 2.9% $2.32
Downtown 1 Million
SF
0 2.5% $1.93
Tennyson 180 K SF 0 0% $2.07
Hesperian 729 K SF 0 8.10% $1.72
Jackson 540 K SF 0 3.70% $1.99
Mission North 350 K SF 0 11.2% $1.85
Mission South 1.3 Million
SF
60.7 K SF 5.4% $1.94
Historic Vacancy Rates
Area/Corridor Vacancy
Rate
(Q1,
2020)
Vacancy
Rate
(Q1,
2021)
Vacancy
Rate
(Q1,
2022)
Highest
Vacancy
Past 2
Years
Citywide 1.90% 2.70% 2.90% 3.2%
(Q2,
2022)
Downtown 3.80% 2.30% 2.50% 4.2%
(Q3,
2020)
Tennyson 1.85% 0.00% 0% 1.85%
(Q1,
2020)
Hesperian 1.90% 14.90% 8.10% 14.9%
(Q1,
2021)
Jackson 1.40% 3.90% 3.70% 7.2%
(Q3,
2020)
Mission North 1.70% 11.70% 11.20% 11.7%
(Q1,
2021)
Mission South 5.30% 1.50% 5.40% 6.3%
(Q2,
2021)
Monitoring and Conditions Tracking Update
An important part of staff’s ability to effectively understand and respond to vacant property conditions was the need to establish a mechanism by which vacant properties are constantly evaluated for conditions and regulatory needs. Information such as vacancy status, public hazards, unpermitted uses, maintenance trends, land use, and owner contact information assist staff to effectively evaluate vacant properties and provide awareness and regulatory support for areas of interest.
As part of efforts to provide the availability of real-time information associated with vacant properties, staff, in partnership with IT’s Geographical Information Systems (GIS) Division, developed one of the region's first real-time tracking systems for vacant properties. Since the program launch in March 2020, staff has identified 123 vacant properties throughout the
City. Staff logged a variety of important data points, such as those listed above, and are continuing efforts to locate and evaluate all vacant properties within the City. While the majority (76) are unimproved vacant lots, 19 percent were identified as vacant residential structures, while 17 percent were identified as vacant commercial or industrial structures. As Code Enforcement and the GIS teams finalize testing and data updates during its initial stage, staff anticipates that some data will become publicly available during the 4th Quarter of the current 2021-2022 fiscal year.
In keeping consistent with the City’s goals for open data, the new public data layer will provide color-coded and detailed vacant property information for both the public and internal services, such as Code Enforcement, Police, Fire, and Planning. such as property hazards, location, conditions status, code case progression, zoning, and much more. The data provided on the mapping system will provide staff with access to more streamlined methodologies of compliance and strategic opportunities for property improvement and development.
Inspections and Compliance Update
Since the program launch in October 2020, staff assigned to the VPM have conducted an estimated 195 assessment and compliance inspections associated with vacant properties.
Re-inspections for monitoring and compliance accounted for 72 (36 percent) of inspections conducted for the purposes of enforcement. As a result of inspections and compliance efforts, $36,000 in failed inspection fees, $7,950 in abatement fees, and $4,928 in contractor fees were issued to support compliance needs towards persistent conditions. To ensure compliance with the VPM and reduce community impact from substantially neglected vacant properties, the Code Enforcement Division has implemented a shortened case timeline policy for properties exhibiting significant health and safety concerns to 360 days or less (depending on severity) prior to potential lien and receivership remedies.
While the initial number of neglected vacant properties identified prior to ordinance adoption totaled approximately 100 properties, educational mailers for the program as well as a pause in program operations due to COVID-19 between the months of January – October 29, 2020, resulted in proactive compliance by property owners for 32 percent of the properties. As a result of proactive compliance by many property owners, only 68 were identified for continued enforcement needs after follow-up observation inspections.
As dedicated staffing for continued monitoring was not achieved as initially planned due to budgetary restraints, proactive efforts to assess and conduct ongoing monitoring were slowed due to existing staff caseloads and assignments. As a result of these impediments, staff has focused primarily on the properties initially identified as part of the VPM. Additional focus has been given to high-priority properties exhibiting substantial health and safety concerns through the use of necessary legal remedies, such as penalties, lien filings, and receivership filings, as needed to mitigate concerns impacting the community at large.
Registration and Administrative Fees Update
The ordinance requires that if a property is found to be vacant or shows evidence of vacancy, as defined by the proposed ordinance, it will be deemed to be vacant or unoccupied and must
be registered with the Code Enforcement Division’s monitoring program. Thirty-eight properties have been invoiced for registration during the 2021 calendar year, while 28 have been invoiced for registration for the current 2022 calendar year, resulting in $96,900 and $71,400 in registration fees, respectively.
While there was a decrease in registration between 2021 and 2022, it is anticipated that once Code Enforcement fills the vacant Senior and Inspector II positions during spring and summer of 2022, additional staff will be available to conduct proactive monitoring and assessment for registration and monitoring needs. Total fees invoiced as of today for all program activity is currently $217,178. All fees and registration amounts invoiced will be collected by voluntary payment or annual property tax lien/assessment through County of Alameda.
Code Enforcement Property Owner Engagement Strategy
As required in most, if not all regulatory divisions, Code Enforcement deploys inspection resources, administrative and judicial remedies, and policy tools in responsive, and proactive ways when targeting neglected vacant properties. Additionally, Code Enforcement provides educational materials through direct mailing and multi-media outlets to educate the public on property maintenance and upkeep.
While these efforts are an important component of compliance, the benefits of strategic alternatives can help facilitate change at a pace and level not typically observed under a standard enforcement process. The strategic partnership Code Enforcement has with Economic Development is one such partnership, where both divisions exchange important information while implementing unique measures to jointly facilitate positive change on vacant properties throughout the City.
Economic Development Vacant Property Owner Engagement Strategy Economic Development (ED) Division’s mission is to foster a vibrant local economy by supporting business attraction and expansion. A key element of this work is assisting prospective businesses with site selection and working with new and existing property owners to market and fill their tenant spaces. To this end, the ED Team regularly engages real estate brokers and property owners of vacant spaces to understand their physical space characteristics and aid in steering businesses to lease their spaces.
ED Team members engage with these stakeholders throughout the year. ED staff provides these stakeholders with available data to support site selection decision-making including data on traffic counts, leasing rates, new developments in the pipeline, locations of potential competitors or consumers pools, and information about city fees and permitting processing timelines. ED staff also offers to “add value” to a “deal” by offering to shepherd tenants through the City’s development permitting process via the Business Concierge Program.
Combined, these labor-intensive engagements are designed as an incentive and support the activation of vacant spaces and place Hayward in the forefront for potential new businesses.
Economic Development and Code Enforcement Joint Engagement Strategy
A key part of the city’s vacant property owner engagement efforts is a critical partnership between the Economic Development and Code Enforcement Divisions. While ED attempts to often engage property owners or their brokerage representatives and build relations by offering Concierge and marketing support, there are instances where these owners do not respond to staff and their sites become sources of calls for service and/or blight.
In instances where owners refuse to engage with ED staff or don’t show a willingness to partner to help activate a property, ED works with Code Enforcement staff to use all the City’s tools to encourage the owner to engage and bring their property into conformance with applicable codes and regulations.
Since activation of the Vacant Property Monitoring program, Economic Development and Code Enforcement have worked together jointly to help facilitate change on several vacant properties, both in core commercial areas and major commercial arteries. Provided below is a case study of joint engagement strategies implemented to facilitate the transition of positive development from neglected vacant properties.
Vacant Property Owner Engagement Strategy – Case Study of 1025 A Street A prime example of the effectiveness of the City’s vacant property owner engagement approach is the former Salvation Army Store at 1025 A Street. In 2018, the Salvation Army store closed and was sold by 1027 A Street LLC, represented by Richard Weinstein of Weinstein Local, to a Mr. Lin Jiaho. Mr. Jiaho secured brokerage representation from GD Commercial Real Estate to market and tenant the space.
Since that time, the site continued to be vacant and began deteriorating with regular occurrences of broken window glass, encampments, graffiti and liter. Economic Development staff worked to engage the property owner, but discovered he was living abroad and was unresponsive.
ED staff worked with Mayor Halliday’s office to draft and send a letter to Mr. Jiaho and his real estate brokerage representatives expressing the City’s concerns regarding the state of the site and encouraging the owner to work with staff to bring the site up to community perseveration standards, vacant property monitoring program registration, and ultimately activate the site. From 2019 through 2021, ED staff continued to engage the brokers and encourage the owner to clean and secure the site and lease or sell the site.
In fact, ED staff marketed the property to several prospective buyers and tenants including a well-known technology company looking for downtown office space and a small retail operation for computer repair. Unfortunately, the referral did not turn into a sale or lease.
Upon adoption of the VPM, ED staff was able to also partner with Code Enforcement, who began initiating regulatory compliance and registration measures as part of the new VPM.
The additional efforts by CE provide an additional layer of regulatory accountability through the applications of penalties, abatements, potential liens, and other legal remedies as needed to establish regulatory compliance.
As ED continued to engage the property owner’s brokers and Code Enforcement continued to apply pressure via regulatory remedies, the brokers informed staff that there was a prospective buyer for the property in September 2021. ED staff immediately scheduled a
meeting with the potential buyers and provided information about the City and offered to support the redevelopment of the project. This included working with the Planning Division to provide a Zoning Verification letter and Public Works - Engineering and Transportation Division to provide guidance and expedite the City’s review of a geotechnical study required by the buyer’s lenders as the site was within the fault zone. These efforts culminated with close of escrow in November 2021.
Staff’s efforts to activate the site did not stop with the sales transaction. Through the concierge service, ED staff worked with the new owners, Presidio Capital Real Estate, who submitted a major tenant improvement application for the site in January 2022. The owners are proposing to develop a dine-in food hall operation, which will feature between 8 and 10 stalls for food vendors. The tenant improvement project is valued at $1.3 million and currently progressing through the plan check process. ED staff continues to work with Code Enforcement to ensure that the owners are aware of any new incidents or problems at the site and collaborates across all City departments tasked with reviewing and approving their plans. For example, ED staff recently facilitated the property owner filing a Trespass Letter of Authorization, which authorizes the Hayward Police Department to assist in identifying and removing any authorized persons found in the structure.
NEXT STEPS
Following this meeting, staff will take into consideration any comments and feedback from the CEDC pertaining to activity and updates related to the VPM and compliance and engagement strategies. Staff will move forward with reviewing and incorporating any recommended alterations to program efforts.
Prepared by: Phillip Nichols, Code Enforcement Manager Paul Nguyen, Economic Development Manager
Recommended by: Jennifer Ott, Assistant City Manager
Approved by:
___________________________________
Kelly McAdoo, City Manager
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: RPT 22-032
DATE: March 24, 2022
TO: Council Economic Development Committee
FROM: Assistant City Manager
SUBJECT
Future Meeting Topics as of March 24, 2022
RECOMMENDATION
That Committee members review and comment on the attached Future Meeting Topics.
ATTACHMENTS
Attachment I Future Meeting Topics as of March 24, 2022 CITY OF HAYWARD Printed on 3/18/2022Page 1 of 1
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Council Economic Development Committee
Future Meeting Topics as of
March 24, 2022
RESPONSIBLE
STAFF
FUTURE MEETING AGENDA ITEMS
PRESENTATION
DATE*
Economic
Development
Economic Impacts of COVID-19 & Trends
Standing Item
Economic
Development
Hayward Upward Economic Recovery Plan Updates:
1) Open for Business Marketing Campaign
2) Restaurant Relaunch & Outdoor Dining Program
3) Restore & Reopen Façade Program
4) Get Digital Program
2022
Economic
Development/
Planning Staff
Review of Select Policies Impacting
Businesses
TBD
Public Works/
Information
Update on City Fiber/Broadband Initiatives
(Following update to CIC)
2022
Economic
Development
Impact of Cannabis Industry on
Economic Development*
2022
*Subject to change and data availability