- Contract for an external audit of all funding and expenditures related to the business park by Dec. 31.
- Establish by Dec. 31 a formal procedure for comprehensively evaluating the viability of the business park.
- Request Colliers International and the Shasta County Economic Development Corporation to jointly determine the continued market demand for existing park parcels and present their finding to the City Council by Nov. 30.
Friday, May 26, 2017
[Shasta County] Grand jury casts critical eye on Stillwater
Although they didn't flat out call it a $40 million — and rising — boondoggle, the Shasta County grand jury issued a 14-page report Tuesday critically questioning the financial viability of the 700-acre Stillwater Business Park.
"Ten years of planning and developing and seven years of marketing have failed to create any new jobs or industry at Stillwater Business Park," the jury wrote in its findings about the project. "Nevertheless, the city has never comprehensively re-evaluated the viability of the Stillwater Business Park to determine whether additional funds should continue to be invested" in it.
And, it said, Redding officials should reevaluate the "shovel ready" park to determine whether it's still doable.
It is recommending, among other things, that the city appoint an existing staff member as the manager of the long dormant project by the end of September and to direct staff to conduct an evaluation of its future viability.
It is also calling upon the City Council to direct staff by the end of September to identify alternative uses for the business park and to present its findings by the end of February.
Still other recommendations to the City Council include:
Redding Mayor Brent Weaver said Tuesday he has skimmed the grand jury's report and was pleased it decided to "shine a light" on the project.
"It (the Stillwater Business Park) is a concern for me and a majority of the City Council," he said. "You can't do the same thing over and over again and expect different results."
But he said there are no immediate plans to dump the project.
He's hoping the improved economy and marketing efforts over the next year or two will see more companies establishing businesses there.
If not, he said, then it might indeed be time to come up with a different plan for the property.
"We won't sit on it indefinitely," he said.
City Councilwoman Francie Sullivan, who called the project a courageous and "bold move to try something new," echoed similar comments, but also said the project did bring businesses into the community, citing Southern Aluminum Finishing, although not necessarily to the business park itself.
"It did create some economic development, but it hasn’t been the big deal that we had hoped for," she said.
Still, she said, it's too early to give up on it, noting that the Great Recession had a great impact on the business park .
"It finished construction during the worst economic crisis in the country," she said, noting there have been some suggestions to sell the business park to a private developer.
Although she believes those calls to do so are a bit premature, she also said the city needs to keep an open mind to all possibilities.
Vice Mayor Kristen Schreder, who said she's unsure what needs to be done to solve the park's problems, said the grand jury's thorough report poses a number of excellent questions that will help the City Council get answers.
"It helps to create the conversation we need to have," she said. "It gives us the opportunity to dig deeper."
In its report, titled "Stillwater Business Park, Still Spending; Still Waiting," the jury says the City Council, as well as administrators and others, are unaware of the park's true cost, leaving them unable to make informed decisions about the project.
According to the grand jury, the city and the Redding Electric Utility have, together, spent close to $41 million to finance the land and infrastructure developments at the business park.
Additionally, the city continues to annually spend almost $1 million from the general fund on the project.
In its summary, the grand jury says city administrators frequently cite the cost of the project as $23 million, the cost to buy and develop the property near the Redding Municipal Airport.
"However, the cost rises to $41 million when debt repayments and electrical and infrastructure by Redding Electric Utility are included," the grand jury says. "Future scheduled interest and principal repayments to service long-term bond debt over the next 20 years by both the City of Redding and Redding Electric Utility will increase the total known cost to $59 million if the bond debts are not paid off prior to maturity."
Additionally, the grand jury notes that more than seven years of marketing by the city, the Shasta County Economic Development Corporation and three different marketing firms have not yet paid off as hoped.
"These combined efforts over seven years have yielded about 14 serious leads and a single lot sale totaling less than $1 million," it says. "If all parcels could be sold for the current appraised value, it appears the city of Redding would still lose at least $27 million."
It was hoped the business park, which saw construction completed in 2009, would create at least 2,500 higher-wage industrial jobs.
But only one company — Lassen Canyon Nursery — has so far bought a lot at there. And work has yet begun to build there.
In March, the company, anticipated to add about 20 jobs, was backing off its plans to build due to the uncertain economic climate of the berry-growing industry, but company Vice President Liz Elwood-Ponce also said the nursery has no plans to sell its lot in the business park.
It paid $840,000 for 16.75 acres in Stillwater in late 2015 and its building plans for its first phase of construction were recently approved by the city.
Meanwhile, a local greenhouse manufacturer that had hoped to set up shop at the park — Emerald Kingdom — wasn't allowed to purchase a lot.
Larry Vaupel, the city of Redding's economic development manager, who could not be reached Tuesday to comment about the grand jury report, has said Emerald Kingdom and another company, D&S Family LLC, had made an offer on the same lot.
D&S Family also wanted to buy another lot.
"So it came down to the City Council wanting to sell two lots rather than one lot," Vaupel said earlier this year. "So they told staff to continue negotiating with that company."
Colliers International, the firm marketing Stillwater for the city, has said Emerald Kingdom's offer to purchase a lot at the park was rejected because its proposed Teflon building didn't meet the park's design standards.
Tony Giovaniello, president of the Shasta County Economic Development Corporation, which shares responsibility for the park's marketing, said Tuesday he had not yet read the grand jury's report.
May 23, 2017
Redding Record Searchlight
By Jim Schultz