$500 Million Northwest Fresno Center Pushed
L.A. developer says Target has committed to 238-acre project.
An ambitious shopping and entertainment center proposed for northwest Fresno could turn vacant land into a development that would rival River Park -- if it overcomes a series of challenges.
Los Angeles developer Chris Shane's dream, south of Herndon Avenue and east of Highway 99, already has run into opposition from some neighbors concerned about traffic.
And similar projects have failed or stalled as developers struggle to find capital and tenants in a still-troubled economy.
Shane is cagey about details, but says his $500 million project can beat the odds because he already has tenants interested in the project and financing for the first phase. Now he's just waiting for the city's final OK.
"We still feel there is huge need for services in that part of the community, and the tenants agree with us," Shane said.
On Thursday, the Fresno City Council is expected to discuss the 238-acre retail, office and entertainment development. Council members could approve the project's final environmental report then.
And if they do, Shane hopes to start building the first phase by the middle of next year.
"My focus has always been on finalizing the entitlements and building this project, and that's what I intend to do," Shane said. "I know it's going to be successful."
Other big projects in Fresno have stalled as the economy went into a deep recession.
Forest City Enterprises pulled out of a proposed 85-acre retail and residential development in downtown Fresno in March after two years of planning.
And the retail portion of Fancher Creek, a 476-acre development project by developers Ed Kashian and Tom Richards, has been slow to start. The Fresno City Council approved a development agreement for the southeast Fresno project in March.
Developers nationwide increasingly are talking about big developments, though few have gotten off the ground recently, said Jennifer Glover, senior asset manager at American Realty Advisors in Glendale.
"The grand mixed-use projects have slowed down, and part of the driver for that is a lack of capital sources," said Glover, who also is an adviser with the Counselors of Real Estate, a national organization of commercial real estate experts.
Shane has pushed his project along since the plans first came out four years ago. Back then, he worked with partner O&S Holdings Inc., a Los Angeles-based development company, to get the project started.
One of the most notable developments they have worked on together is a 2.1 million-square-foot retail, office and residential center in Huntsville, Ala. The Bridge Street Town Centre opened in 2007.
But during the planning of El Paseo, Shane left O&S to start his own company called Gryphon Capital. He will continue to develop the project on land that is owned by John Allen of Calabasas.
Shane won't discuss the reason behind changing partners, but said the project has been a long process of submitting plans and the necessary paperwork to get it approved.
He has obtained enough private financing to complete the first phase, but declined to say how much or from whom. And he said he is confident he will be able to work with a lender to finance the rest of the project.
With quality tenants, even in today's market, financing is still available, Shane said.
El Paseo would be built in five phases. The first phase would be the retail and restaurant portion.
Target "has committed" to the project and other retailers are interested, Shane said. He declined to identify the retailers or describe the arrangement with Target. Officials with the retail giant did not return calls to confirm the deal.
The second phase would add office space east of the retail center. The entertainment portion would come after that with a proposed 2,500-seat theater and several hotels.
The entire project would be about the size of the 240-acre River Park center at Blackstone and Nees avenues.
But the later phases would depend on demand, Shane said.
"Obviously, you don't want to build something if the demand is not there," Shane said.
Not everyone thinks Shane's plan will work.
The Fresno retail market is a tough sell at a time when few tenants are relocating or choosing to expand, local retail brokers say. Storefronts across Fresno have been empty the last couple years, and few new retail developments have sprung up.
The low demand may not justify a need for all the retail spaces planned in El Paseo, said Doug Cords, a retail broker at Commercial Retail Associates, a commercial brokerage firm in Fresno. But an anchor like Target could draw in a few tenants, he said.
The development also would give northwest Fresno residents a shopping alternative. They wouldn't have to drive 5 miles down to Shaw and Marks avenues, where there is a cluster of retail stores including a Target.
But some local residents are afraid the new development will create more traffic in an area that already is busy with two schools nearby and a railroad crossing.
Residents have attended City Hall meetings to voice concerns. They have not organized to formally oppose the project, however. A group of Clovis residents has waged a ferocious court battle to stop a proposed shopping center at Herndon Avenue and Highway 168.
Among those who are concerned is Tom Lang, who hopes to build an aquarium at Highway 99 and Herndon Avenue. Lang said he and other neighbors don't want traffic backing up for miles.
Commuters, school buses and the railroad crossing already create traffic problems, said Lang, who wants the developer and the city to find a solution for those issues before the project is approved.
He suggests creating a railroad undercrossing on Herndon so traffic wouldn't have to stop at the railroad crossing when a train travels through the area.
"I'm not anti-development," Lang said. "It just needs to be done right."