COMMUNITY LEADERS VOICE CONCERN OVER CLOSURE OF EL CAJON CDC

No holiday events slated to help downtown merchants this year, as redevelopment agency forced to close doors due to state funding cuts and lack of support from city

City to vote December on management of a new PBID

By Miriam Raftery

November 27, 2011 (El Cajon) –  Community leaders are reacting with shock, dismay, and questions after learning that the Board of Directors of the El Cajon Community Development Corporation has voted to dissolve the redevelopment organization due to lack of funding from both the city and state.  President and CEO Cindi Fargo has been laid off, along with the remaining staff.

“I am deeply disappointed,” said Eldonna Lay with the El Cajon Historical Society, also a former CDC board member and past design review commissioner for the city.  “It’s so unexpected and really tragic.” 

Lay praised Fargo, who took over the helm at the CDC in 2010, for starting up new initiatives and moving downtown redevelopment in a positive direction including filling many vacancies, upgrading signage and “clever renovation.”  Lay added, “She hasn’t been here long enough …She hasn’t had an opportunity to finish what she started, which is really a shame.”

Formed in 1996, The El Cajon CDC strived to improve the downtown district through its Clean and Safe program, Ambassador Services, neighborhood services, façade improvement grants, design assistance, murals and special events including the Cajon Classic Cruise and Concerts on the Green. 

“In the last 16 months more than 55,000 square feet, some long vacant, has been leased up within a five-square block of Main and Magnolia (excluding the new Police Station and the Brewery),” said Rick Sweeney, chairman of the board.  “CDC and its collaborators completed the recertification of the new PBID [Planned Business Improvement District] for another five years.  

Many of those services are slated to continue starting January 2, 2012 through a newly established PBID assessment district management that the City Council will approve December 13.  Voters previously approved the PBID tax assessment .

The CDC has been plagued by problems, many not of its own making.  An audit report by Scott Barnett raised questions over some expenditures and reporting procedures, leading to formation of a blue ribbon commission chaired by developer Daryl Priest.  The questions all focused on actions taken under leadership of Claire Carpenter, however.

“All of this occurred before I came on board,” said Fargo, who has 25 years of experience in successful redevelopment projects including San Diego’s Gaslamp district.  “I walked into a political hornet’s nest and had no knowledge of that coming.” 

Under Fargo’s leadership, the organization addressed the issues raised in the audit and further, slashed staffing from 16 down to just three employees plus Fargo.  The CDC also moved from spacious offices on Main Street into a much smaller and cheaper office space under Fargo’s leadership.  Long boarded-up storefronts saw new life as small businesses moved in with help from the CDC, as ECM previously reported in January 2011 in a story titled “Vitality returning to downtown El Cajon”: http://eastcountymagazine.org/node/5208

Then the state Legislature passed a law slashing redevelopment funding – a move that put the brakes on major projects including renovation of the East County  Performing Arts Center.  Some local cities opted to continue funding their redevelopment entities to help them keep doors open. But not El Cajon, which halted all funding and failed even to reimburse the CDC for its cost of the PBID  recertification and other services provided and paid for by the CDC. 

The CDC had hoped to put in request for proposal (RFP) for the PBID management, however a source close to the CDC has informed ECM that CDC officials were discouraged from applying.

Ironically, a lawsuit challenging the state redevelopment funding cut is slated to be heard by the California Supreme Court in January. Many legal experts predict the law will be thrown out by the court as unconstitutional, since it appears to contradict language in a ballot initiative approved by voters statewide.  If that happens, funds for redevelopment—including El Cajon’s, would be restored.

“We’re five weeks away from January 2005. We can see the light, and we can’t get there,” Fargo told ECM.   Fargo made clear that she supports the board’s decision, since lack of funds left board members with little choice.  But she is frustrated that the many improvements made under her leadership failed to sway city officials who many downtown insiders have said seemed dead-set against giving the CDC any opportunity to survive. 

“We finished the concert series with the best season ever,” she said.  “We were recertified as a National Main Street Community.  We did 30 design projects, approximately, within the district,” she said, citing the 55,000 square feet recently leased up.  “In our minds, we’ve got the organization on the right track.  We were anticipating great projects for the next year that we would initiative, like a farmer’s market, a new signature event, and the centennial.”

Fargo said the CDC could not survive with the combined economic shock of losing both state and city funding.  With the CDC gone, she added,  “The Christmas car show is going to be cancelled.”  Nor will the Holly Jolly Trolley—a double-decker bus –ferry holiday shoppers through downtown this holiday season.  Already, many merchants are struggling due to the combination of the economic downturn and closure of the East County Performing Arts Center (ECPAC), which was shut down by the City Council in early 2010 for a remodel that has yet to occur.  

If the Supreme Court rules against releasing redevelopment funds in January, El Cajon Councilwoman Jillian Hanson-Cox disclosed, the consequences could be dire. “If we don’t win, ECPAC will probably go bye-bye because we’ll have to sell the property,” she said.  “It’s a jewel; we want to keep it, but just bringing it up to code would cost $4 million alone, and that’s not even the tip of it.”

Councilwoman Hanson-Cox said she is “sad to hear about the CDC.” She added, “Personally, I’ve always believed in the CDC because they not only try to promote economic growth in the downtown area, they also try to help property owners with their building.”  She withheld judgment on whether the new PBID management will be able to fill the shoes left empty by the CDC’s demise.  “I really have to see the plan of this other nonprofit organization.”

Lenny Donato is co-owner of Mangio Bene restaurant.  “Ever since they closed down that theatre, it’s killed my business," he said. 

Donato praised Fargo “100 percent for effort. She really did her best,” he said, but added that in these tough economic times, he feels that merchants banding together “could do just as good a job or better and we don’t have to pay anybody.”  Waiting until next year for a farmer’s market is too little too late, he said. But he conceded, “In the last six or eight months, with such a limited budget, I don’t know what they could have done.” 

He faulted the city for raising sewer and sales taxes, while reneging on its promise to merchants such as himself, who were enticed to move downtown with a promise of a revitalized theater.  “I’m just trying to survive day by day,” he said.

Developer Daryl Priest chaired the blue ribbon commission on the CDC.  He said he supported the original PBID back in 1996, funded by business owners who taxed themselves. That morphed into a CDC run by a separate management group with funds from the redevelopment agency. “It kept growing but maybe not giving the services that it should have,” Priest told ECM. 

He acknowledged that the Barnett report “probably didn’t do the best job, in all fairness” but said the CDC nonetheless “got big and bureaucratic and kind of lost their way.”  Asked about the severe downsizing under Fargo’s leadership, he called it “great, but maybe too little, too late” along with the state freezing redevelopment funds.

Asked why the city couldn’t help the CDC survive until the January court decision, Oriest claimed the city “had no way of funding them, they are so tight on budget.”  He acknowledged that the CDC leaders came to him to ask him to run the recertification of the PBID “because they knew that they would not be recertified unless it was under a different entity.”  He said he proposed a smaller PBID that would run a “lean and mean ship.” 

Priest denied, however, that the CDC had been discouraged from bidding on the PBID management.  “Tell Cindy if she wants to come back and bid on that she can, just like any subcontractor. We’re going to hire a manager and run it more like a business than a government entity.”  With the CDC formally dissolved, however, just how its former CEO could provide a bid with no staffing is questionable.

Priest, who also headed a former blue ribbon commission on ECPAC, squelched hopes that merchants could expect the city to complete the long-promised remodel of the theater, either.  “For the city to run it they will have to subsidize a half million dollars a year,” he said, though he acknowledged that other cities don’t expect theaters to be self-supporting.  He said Indian casinos offering cut-rate entertainment “doomed” the performing arts center.

Speculation has long been rampant that the mayor or councilmembers, in conjunction with developers such as Priest, may be looking to raze the theater and build a hotel, convention center, or some other development on the site. Mayor Mark Lewis has long denied that claim, as have other councilmembers through the years.  Oddly, however, the blue ribbon commission on ECPAC excluded the most seemingly qualified applicant: a 20-year manager of the Civic Theater in downtown San Diego.

Similarly, Fargo points out that the blue ribbon commission on the CDC, also chaired by Priest, did not include experts in the redevelopment field.  “They weren’t experts, so it was very difficult for them to evaluate what was happening correctly,” she observed, recalling that the CDC provided responses to every statement in the commission’s report to the Council.

Zohny Hanna owns the Serenity House Christian Bookstore at the corner of Main and Magnolia (see ECM story).  A refugee granted asylum here due to persecution of Christians in Egypt, his homeland,  Hanna faults the City Council for failing to support the CDC. 

“My opinion about the city is the city does nothing,” he said. “They don’t give any service to the downtown…They don’t give us a hand to make the downtown better.  I told them, `You guys made the downtown a ghost town…I barely survive. I’ve encouraged others to start their businesses…we work hard, but if the city won’t work with us to start activities, how can we continue?”   

He said the city wants to charge permit fees to merchants who want to put up holiday lights, even while holiday activities normally organized by the CDC are being cancelled.  Asked about the PBID, he commented, “It’s not good...The CDC tried to make it better—a downtown, not a ghost town.  The last comment I heard from Cindi was,  “The downtown is the life of the town during Christmas.” But how can they do it without money?” He suggested the city should lay off some staff and give those funds to the CDC.

At Hanna’s bookstore and coffee shop,  he offers classes in English to help El Cajon’s growing population of immigrants and refugees. “We help everybody, even the homeless, we give them coffee,” he said.  “We have to be together, to help each other.”

Some see politicial opportunities created in the wake of the city's recent actions.

Bonnie Price, co-president of the East County Democratic Club, noted that El Cajon is now the poorest city in the county with nearly a 30 percent poverty rate, according to the 2010 U.S. Census. 

“The successor agency [PBID] is unlikely to be able to do as much [as the CDC],” she predicted, “especially since the City Council enacted the highest sales tax in the County. Such a high sales tax drives customers of those businesses to other communities with lower sales taxes,” she said, adding that the higher sales tax also hurts the poor in this impoverished community, since those with low incomes often can’t afford gas to drive elsewhere to shop. “It’s time for the Republicans who control El Cajon’s government to read the census data and understand that their population needs tax relief,” she added.  “City government should serve the many who rely on it for the kind of services that make the community thrive.”

Karen Marie Otter, vice chair for the San Diego County Democratic Party’s east area, called closure of the CDC “Yet another ridiculous failure for the tax-and-spend Republicans running the show in El Cajon.”

Noting the all-Republican city council seeks to put a measure on the ballot that would make El Cajon a charter city if approved by voters, Otter added, “If the voters pass the charter in June, there will be nothing to stop them[Council] from writing their own laws and their own paychecks. We must oppose the city charter in June and vote out the tax-and-spend Republicans in November.”

Hanna voiced concerns that that the El Cajon City Council is not representative of the community's changing demographics.

“There’s not even one Chaldean,” he said, referring to the Iraqi Chaldean Christian population which now numbers over 40,000 people in El Cajon. The city also has a growing number of refugees from other areas, such as Egypt and Syria, he noted. Census data also shows an increase in the city's Latino and African-American populations.

Hanna suggested that he may move to El Cajon and run for a Council seat himself.  “We have to make the city grow up,” he concluded, “and take back the power.”