"Tenants May Finally Start Moving Into the Mostly Vacant Pleasant Hill Bart Office Complex" Posted by David Mills (Editor), June 21, 2013 at 04:48pm (the Patch.com)
"The idea was to construct a high-density retail and residential complex with parking near a transit center. The development got some high praise early, but it’s had difficulty delivering on the promise." (emphasis added)
COMMENT: Well, it sounded like a good idea at the beginning!
"For years, people have driven by the office development in front of the Pleasant Hill BART station and asked, “Why are all those places empty?” (emphasis added)
"The retail area on the first floor, however, has remained mostly vacant. Currently, 10 of the spaces are without tenants or signed leases." (emphasis added)
COMMENT: And this is YEARS after the complex was built.
"His [Smith's] biggest concern is the increase in maintenance fees being leveled by the project owner, Avalon Walnut Creek.
Smith said they’ve tripled to $900 a month since he moved in and there’s not" much he can do to stop it." (emphasis added)
COMMENT: So, does this mean that if the retail spaces are not occupied, that the existing tenants get slammed with taking on the maintenance for the property? It would appear that way. Can we imagine the few existing retail tenants taking on more maintenance fees without it affecting their decision on whether or not to move somewhere else? Failing that, can we imagine our seniors selling a single-family residence in order to downsize to a condo in the downtown area, only to watch monthly expenses jump because the developer failed to find adequate anchor tenants for the retail side?
"However, the rents have been going up, the latest increase being 15 percent." (emphasis added)
COMMENT: This means that existing retail lessees and market-rate units are forced to pick up the tab. How? Let's walk through the scenario. In these developments, if 20% of the housing is dedicated to very-low & low-income units, the developers get a density bonus among other things. The developer would be crazy not to take the extra incentives. So, if 20 to 30% of these units are subsidized (for very-low & low income housing) where the rent to be collected from such tenants is capped, who do you think will end up making up the difference? Think about it. I'm guessing if the retail is mostly empty (as is the case here), the only ones left to hang with the underfunding are the existing retail lessees and the market-rate units.
Ohhhhhhh, the best laid plans of mice & men....