TO: COMMUNITY AND ECONOMIC FROM: Nanci Klein
DEVELOPMENT COMMITTEE
SUBJECT: SAN JOSÉ FLEA MARKET UPDATE DATE: October 10, 2023
Approved Date
RECOMMENDATION
Accept the bi-annual Berryessa Flea Market Update quarterly status report.
BACKGROUND
On June 29, 2021, the San José City Council approved the San José Flea Market Southside Rezoning project (Ordinance No. 30646). The development site was rezoned to allow up to 3,450 residential units and up to 3,400,000 square feet of commercial use, as well as public plazas, parks, trails, and open space.
The rezoning project includes a variety of measures to support business owners at the existing Flea Market as redevelopment plans move forward. For example, the Planned Development zoning designated approximately five acres for an urban market and included a requirement for the property owner to contribute $5 million toward a Flea Market Vendor Transition Fund (Fund). The City also pledged an additional $2.5 million to the Fund, for a total of $7.5 million.
The purpose of the Fund is to help vendors transition their business from the existing flea market site to another location or to the five-acre urban market proposed through the rezoning process.
Staff was directed to establish a Flea Market Advisory Group, consisting of a supermajority of vendors, to make recommendations on how the Fund would be spent.
Additionally, City Council gave approval for staff to proceed with a Flea Market economic impact study and an alternative market sites study and directed staff to provide business technical assistance and educational resources to Flea Market vendors during this time.
Lastly, City Council directed the Flea Market owner to submit a written, quarterly status report to the City summarizing the most current planning, permitting, and construction activities on the site and reporting on the displacement of any vendors. The Community and Economic Development Committee reviews these reports twice a year, along with status updates from staff.
CED AGENDA: 10/23/23
FILE: CC 23-236
ITEM: (d)2
10/13/23
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 10, 2023
Subject: San José Flea Market Update
The following section of this memorandum summarizes the progress toward implementing the City Council direction described above.
ANALYSIS
Flea Market Advisory Group
The Flea Market Advisory Group (Advisory Group) is the official body of vendor representatives assembled to advise the City on decisions related to the vendor transition process.
The role of the Advisory Group is to advise the City on the use of the Vendor Transition Fund; provide input on new market concepts; advise the City on how vendors will get the opportunity to relocate in the five-acre urban market; and reach out to the larger vendor community.
Advisory Group members have displayed a notable commitment to the committee and its gatherings, maintaining consistent attendance. This group has a diverse set of members, each offering a unique perspective and expertise which has brought up different views in relation to the information presented. Advisory Group meetings are open to the public and include time or opportunities for non-members to comment. Meetings include interpretation in Spanish and Vietnamese. Staff ensures consistent communication with Advisory Group members by providing members with meeting content a week in advance of each meeting, allowing them to be well-prepared for in-depth discussion and timely responses to post-meeting questions or concerns via email.
There have been three Advisory Group meetings since its launch in May 2023. On May 17, 2023, the first Advisory Group meeting was held at the Berryessa Community Center. The meeting served as an orientation for Advisory Group members. Staff shared the purpose of the group, the expectations of the members, and an update on the Transition Fund, along with an overview of a proposed work plan to guide Advisory Group meetings. Feedback from the members and public emphasized supporting the vendor community amid uncertainty about its future and identifying potential solutions for the relocation of vendors as soon as possible.
The second Advisory Group meeting was held online via Zoom on June 21, 2023. The meeting provided preliminary insights from the Flea Market’s economic and cultural impact study already underway, as well as an overview of the methodology for the alternative site study and real estate basics. The consultants highlighted the Berryessa Flea Market is home to over 460 businesses, making it one of the densest concentrations of small businesses in San José, if not the Bay Area. The discussion revealed that about 75% of the vendors depend exclusively on the market for their income. This emphasizes the market's dual role not only as a major employment center, ranking it among the top 50 employers in San José but also as a vital cultural anchor in the community. During the discussion following the presentation, Advisory Group members asked questions and provided feedback on the data points presented. This exchange led to additional analysis and survey work by staff and consultants to better understand the Flea Market ecosystem; this work is still underway.
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 10, 2023
Subject: San José Flea Market Update
On September 7, 2023, the City of San José hosted the third Advisory Group meeting at the Berryessa Community Center. Feedback from Advisory Group members at the June meeting resulted in returning to an in-person format. Members felt meeting in person enhanced accessibility and fostered stronger connections among the group. The meeting explored the early findings of the Alternative Sites Study conducted by consultant David Greensfelder of Greensfelder Commercial Real Estate. Eight sites were studied, including three City-owned sites (Singleton and Remillard landfills and land near Morgan Hill). Parameters such as location (considering trade area, demographics, and traffic patterns), facility attributes (size, parking, access), and high-level feasibility (encompassing potential costs, issues, and revenue) were discussed for each location. Advisory Group members were most interested in the possibility of the City-owned Singleton site as a potential long-term solution and the former Sears building at Eastridge Mall and the County of Santa Clara Fairgrounds as potential short-term solutions.
Members inquired about decision-making timelines and potential relocation costs for vendors, and their feedback centered around the desire to preserve the unique vendor culture of the market wherever it is re-established.
The formation and careful implementation of the Flea Market Advisory Group has been instrumental in building trust, fostering open dialogue, and increasing collaboration between City staff, the vendor community, and community stakeholders during the development transition process. Though significant progress has been made, many important questions around the possibility of any future market either at the current site or in another location remain unanswered.
While the Advisory Group is the primary mechanism for the City’s vendor engagement efforts, staff is utilizing other communication methods to reach out, inform, and involve the Advisory Group and the broader vendor community in the transition-planning process. These additional communication methods include:
• Direct Outreach: Stall-to-stall outreach at the Berryessa Flea Market to keep vendors informed about upcoming meetings. During in-person outreach, literature summarizing the outcomes of Advisory Group discussions is shared with vendors. • Email: Regular email communication from City staff reminding them of upcoming meetings, sharing advance meeting materials, and providing meeting updates. • Webpage: https://www.sjeconomy.com/FleaMarketVendors is the established online vendor resource that is regularly updated and provides additional background information and updates on Advisory Group activities (including meeting agendas, links, and presentations).
Business Transition Program
In December 2022, City Council approved a vendor support, loan, and technical assistance program to assist Berryessa Flea Market businesses. Mission Asset Fund, a local nonprofit organization that specializes in helping small businesses achieve long-term success, was selected to provide vendor technical assistance in the areas of business planning, credit building and business expansion, as well as provide access to 0% loans. The technical assistance and financial
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 10, 2023
Subject: San José Flea Market Update
tools Mission Asset Fund provides are intended to help vendors navigate the transition process with more confidence.
Mission Asset Fund began outreach for the program in April 2023 and has been progressively expanding its efforts. In addition to hosting in-person group orientations and financial workshops multiple times a month, their team regularly provides personalized support to vendors through one-on-one coaching sessions. Mission Asset Fund has partnered with the City, the Berryessa Flea Market Vendor Association, and the Flea Market property owner to conduct vendor outreach. Additionally, with the assistance of the Flea Market owner, Mission Asset Fund has established a permanent booth at the Flea Market to broaden access to its programs and services.
These tactics have resulted in 30 outreach events, 101 vendor leads, 117 technical assistance events/one-on-one coaching sessions, and 31 completed loan applications.
Flea Market Owner Quarterly Report
In the latest Quarterly Report provided in July 2023, the Flea Market property owner confirmed that the required one-year advanced notice of the Flea Market closure will not be given before January 1, 2024. The report also notes that four vendors were terminated for various violations of the Flea Market License Agreement during the last quarter.
City staff await the resubmission of plans from the applicant for both the Master Planned Development Permit (PD21-018) and a Tentative Map (T21-041) after providing a first set of comments on the submittals. The purpose of these entitlements is to plan the details and establish the layout of future public roadways, public park sites, creek trail setbacks, plaza sites, and development blocks for future development. These entitlements in and of themselves do not authorize the construction of any buildings or infrastructure. Future processes will need to be completed before any construction can occur.
EVALUATION AND FOLLOW-UP
The Community and Economic Development Committee will receive its next status update on Flea Market transition efforts in spring 2024.
COORDINATION
This memorandum was coordinated with City Attorney’s Office.
/s/
NANCI KLEIN
Director of Economic Development
and Cultural Affairs
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 10, 2023
Subject: San José Flea Market Update
For questions, please contact Adolfo Ruelas, Business Development Officer, at (669) 259-5585 or [email protected].
ATTACHMENT
Flea Market Property Owner Quarterly Report