Redevelopment dollars debate surrounds Ben Franklin Hotel 

Merchants are criticizing a plan that earmarks city redevelopment money for a series of public projects rather than on key private properties downtown, including the recently-sold Benjamin Franklin Hotel.

San Mateo has two redevelopment areas, one covering 165 acres downtown and one covering around 700 acres along the shoreline. A five-year plan for redevelopment spending approved April 4 by the council names eight public projects to receive a combined $4.5 million through 2015, including a new city corporation yard, replacing downtown sidewalks and acquiring land for a new fire station located outside the downtown area.

But local business owners say the city should allocate redevelopment funds to revitalize the long-vacant 1920s-era Ben Franklin — which was purchased last week by venture capitalist Tim Draper — and other private properties downtown.

“There’s no money available in that plan for private-sector catalyst properties,” said Rob Edwards, executive director of the Downtown San Mateo Association. “That’s the whole premise of [redevelopment agencies]. It’s not to take tax increment and spend it to improve the city’s garage or the city’s corporation yard.”

City Manager Susan Loftus said the city is “committed to see the Ben Franklin is revitalized” and that emphasized the “future of redevelopment is very, very uncertain at this point.” While the current plan for redevelopment spending does not include it, she said the city has other redevelopment dollars that could go to the hotel.

Just before the council approved the spending plan, Mayor Jack Matthews asked whether there were any redevelopment funds available for the Ben Franklin. Community Development Director Lisa Grote said there were none allocated, because the state took about $5 million in redevelopment funds that had been set aside for larger projects.

Loftus, however, told the council that the city has $8 million in redevelopment funds that could be “a potential source of funds we would look towards reallocating to help that [Ben Franklin] project.”

City Council Member David Lim then urged the city to use the $8 million for bridge loans or local development of projects like the Ben Franklin.

In an interview with the San Francisco Examiner, Loftus said the $8 million is redevelopment money the city has accumulated over several years and has already earmarked for other projects, including $2.3 million for parking improvements and $2.3 million for fire station improvements.

But, Loftus said, “Until those projects are completed, the city council always has the ability to divert those projects to another purpose.” Loftus said staff would first need to talk to the hotel developer, then could bring a recommendation to the city council to change how the money is allocated.

The existence of the $8 million was a surprise to Eleni Lolas, co-owner of Astaria restaurant at the base of the Ben Franklin, who said the city repeatedly told her there was no redevelopment money for the Ben Franklin as she and her co-owner tried to buy the hotel themselves.

“Is it there? Is it not there?” Lolas said of the $8 million. “I think the council should be holding [Loftus] accountable to clarify what’s going on.”

Lim said he still has questions about the $8 million, but supports both the five-year plan and revitalizing the hotel. He said redevelopment projects, private or public, should be for “the intended purpose of RDA, and that’s to improve blighted zones and improve the community as a whole.”

In a brief phone interview last week, Draper said he and his wife haven’t finalized their next move for the hotel.

“I grew up in San Mateo and was always a big fan of the hotel,” Draper said. “We’re working on our plan for it.”

San Mateo spending allocation

Five-year redevelopment agency programs and expenditures:

Public Infrastructure and Parking Improvements
Central Park parking garage: $350,000
Downtown sidewalk and pavement repair or replacement: $125,000
4th Avenue parking lot: $128,000
Downtown parking improvements: $600,000
Downtown parking meter replacement: $150,000

Public Facilities
Bay front levee improvements: $183,000
Fire Station 24: $725,000
Corporation yard: $2,300,000

Source: City of San Mateo

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