By Esther Rubio-Sheffrey | SDUN Reporter
The highest bidder in an auction on Jan. 25 will determine the fate of the former Caltrans headquarters adjacent to Old Town Historic Park.
The California State Parks Department hoped to acquire the 2.48-acre site on Juan Street, demolish its existing building and expand the park, however a deal failed to materialize. Both Caltrans and the Parks Department signed a Memorandum of Understanding (MOU) in 2008, laying out terms for a $10.7 million purchase, with $2.5 million due up front and the remaining balance due within ten years of the transfer date.
Caltrans Representative Edward Cartagena explained the MOU expired by its own terms when the agencies failed to reach an agreement. “Several barriers to the development of the program exist, including the needs of each department and the needs of State and Federal stakeholders,” Cartagena said, adding that both parties investigated various types of projects or work that could have satisfied the balance and transfer.
One of the largest barriers is the agencies’ disagreement over the property’s value. Parks District Superintendent Clay Phillips said, “We have a number of reasons to believe that Caltrans’s estimated value is unreasonably high. The building and site have many issues, including HAZMAT, compliance of building codes and lack of parking.” He added, “If our assessment of the true commercial value of the property is correct, then no successful bidder will be able to make the project pencil-out.”
Caltrans acknowledges the poor condition of the property, which has not seen renovations since 1964, and listed it as such in the MOU. Cartagena said the auction’s $4.5 million opening bid is at par with comparable commercial lots. While free to make a bid, Phillips stated their department does not intend to do so, adding the money they have set aside does not meet Caltrans’s minimum bid.
The California Transportation Commission must approve the winning bid during the auction’s 90-day option terms, at which point the winning bidder may also withdraw from purchase, forfeiting the $200,000 registration fee. Thirty-five potential investors attended open houses held in December 2011, and Caltrans is optimistic about the prospect of selling the building, which has been vacant since 2006.
Phillips said the Parks Department is hopeful there will be a chance to return to the negotiating table with Caltrans. “This park and site are of statewide significance and extremely important to the local community, as was evidenced by the number of letters sent in response to Caltrans’s [intentions],” Phillips said. “There should be some consideration for simply doing the best thing with state land, which we believe is to keep it as state property, and change its land use from office space to public space as part of Old Town.”
Phillips also said the Parks Department is concerned with a new owner’s intentions and visual and traffic impacts to Old Town, as well as the lost opportunities inherent with the site, which include environmental factors and key historical stories of the park’s Native American and Mexican periods.
The auction is open to the public. Registration begins at 9 a.m. at Caltrans’s Garcia Room, located at Caltrans’s offices on 4050 Taylor St.
