Nipomo Town Square Moves Forward

This week’s Adobe Press published an article on George and Nancy Newman’s Nipomo Town Square project. The Newmans are long time Nipomo residents, who currently run The Water Gardens
The Water Gardenshere in Nipomo. I previously posted on this project in May of this year here. That was before I had an opportunity to sit down with George and hear more about his project, which I’ll post more about in a bit. George was kind enough to provide me with some additional information and some projected time tables he anticipates for The Town Square’s Construction.

The Adobe article describes Nipomo Town Square as a 20 acre, 300,000 square foot project, which just received an intent to serve letter. The problem is that fees have skyrocketed so much that this, and many commericial projects in Nipomo are in jeopardy. As George Newman explained to the Adobe Press, if fees continue to rise, projects like this will not make any economic sense:

A roughly 20-acre, 300,000-square-foot commercial project in Nipomo took a step forward last Wednesday when the Nipomo Community Services District tentatively offered to provide it with water and sewer service.

While expressing happiness at the green light, landowner George Newman told the district’s board of directors that fees for developers in the community were too high — a trend that could hinder construction in Nipomo.

The Nipomo Village Plaza proposal includes 272,700 square feet of commercial space, including restaurants, office and retail, and an assisted living facility. The district provided the project with an “intent-to-serve” letter in November 2002, but it expired before Newman could complete his utility plans, said Bruce Buel, NCSD general manager.

Intent-to-serve letters indicate the district’s commitment to provide a project with water and sewer service if the developer meets certain criteria.

Newman’s new letter is valid for two years, plus a one-year extension if he can show “due diligence” in progress on the project.

George’s complaint is not unique. From what I hear almost all projects in Nipomo are facing the same crises. This is not a good thing:

The project is expected to require 30 acre-feet of water per year, but Buel said that estimate may be conservatively high. An acre-foot is equivalent to 325,851 gallons, which is enough water to meet the needs of 10 people in an urban environment.

Capacity fees for the project are expected to be about $825,000, but those charges could be increased because they are dependent to some degree on the district’s supplemental water project. The original pipeline project, which was designed to pump water from Santa Maria to Nipomo, is predicted to cost more than $24 million, four times what was originally estimated.

Newman said it’s unfair that developers are forced to shoulder such a significant amount of the project costs. Many developers, he added, won’t be able to complete projects if costs stay so high.

“I’m feeling the crunch big time,” Newman said. “ … I’d like the board to consider a broader base for funding. Projects just don’t pencil out anymore.”

In response, Director Cliff Trotter said developers have to cover the majority of the costs, because homeowners shouldn’t have to bear that burden.

“The money’s got to come from somewhere,” he said.

That’s true, the money does have to come from somewhere; but, projects like Nipomo Town Square and others are vital to Nipomo’s existence. Why should the developers have to cover the majority of costs? Why shouldn’t homeowners shoulder more of the burden–at least more than they are now? Everyone benefits from projects like the Nipomo Town Center–not just the developers. Eveyone benefits from upgrades to the NCSD’s infrastructure–not just developers. Everyone benefits from the acquisition of supplemental water–not just developers. I think it unwise to place all or a majority of the financial burden on new development to shoulder the costs of neglected infrastructure, supplemental water, and other associated costs of development. If we bring new growth and development to a stand still in our community we face a much bleaker future, continuing under the inadequate planning decisions of San Luis Obispo County.

Now, let me update you on Nipomo Town Square, as George Newman explained it last week. To see the following images in full size, double click on them, and then click on the “all sizes” icon above the image to increase the size to its full size.

This first image is essentially the project overview of Nipomo Town Square. If you enlarge the image you can see schematics of the buildings and also their descriptions.

scan0001

Below is a map showing the location of the project, along Mary and Juniper Streets in Nipomo.

scan0002

Below is a bit more detail of the types of tenants that Nipomo Town Square will have, including medical suites, a restaurant, various professional offices, retail, and the crown jewel, an assisted living center:

scan0003

The assisted living center will be approximately 126,000 square feet, with 120 units. The idea behind the assisted living center, which I think is a good one, is that it is close to doctors offices, professional offices, banks, restaurant, drug stores, grocery stores, and the post office. Everything anyone would need is within a very short distance of the Nipomo Town Square, some of which are actually located in the project.

The restuarant will be a nice sit-down eatery, approximately 19,000 to 20,000 square feet, including a banquet facility. Right now it is scheduled to be located across from Los Padres Bank.

The current portion of the project, which will be under construction first has been designated Nipomo Town Square North and South. It was also previously known as Nipomo Town Square West. It is the portion located West of Mary Street and North of Juniper. The photo below, which I took from the construction office shows this portion of the project (again, double click for full size):

DSC_0138

In the very far background you can see Juniper Street. Off to the right is Mary Street. The specifics for Nipomo Town Square North, including the total acreage, number of buildings, amount of parking, and overall and individual square foot designations are below:

scan0004

The same specifics for Nipomo Town Square South (again on the same parcel–just the southern most portion) are below:

scan0005

The specifics for Nipomo Town Square East, which will be the second phase of the project, located East of Mary Street are below:

scan0006

The overall project data sheet is below:

scan0007

In addition to project as outlined above, George Newman is also building 14 homes, just to the south and west. They will be 2,100 to 2,400 square foot homes, both one and two story, on lots ranging between 6,000 to 6,200 square feet. The homes will be built in early California, turn of the century style, and will have lots of character.

George anticipates some of the dirt moving will begin as early as February 2007; however, the major construction he hopes will be underway by June 2007.

Nipomo Town Square does not yet have a website; however, it is in the planning stages. I will post the URL once it is available. I will also try to post updates here as I learn about them. I think Nipomo Town Square is an incredible project that will benefit all of us here in Nipomo. I am excited to see its continued development. Since George has his phone number posted on his sign, I’m sure he won’t mind me including it here. If you have questions about the project, or want to talk to George about it, give him a call (805) 929-6840.

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5 thoughts on “Nipomo Town Square Moves Forward

  1. Thank you, Guy, for such thorough coverage of an important issue. Your treatment is in much greater detail than any of the print media have given so far.

    I must, however, correct a misconception that has crept into the dialog: Developers are NOT being asked to bear the entire cost of supplemental water. If we did so, it would be illegal, because (as you know better than me) the courts have ruled that all those who benefit from a public project must help pay, and no-one can be required to pay for more than the impacts they have created.

    This is true here. We (the NCSD) commissioned a rate study, which calculated the benefit to our current ratepayers (percentage to make up overdraft, plus additional for the real benefit of having more than one water source), and that is being paid now on every water bill the NCSD issues.

    Developers are being asked to pay only for their calculated proportion of the cost–nothing more.

    If the City of Santa Maria will allow us to construct a more affordable project, new growth here will be more affordable. Otherwise, project costs are going to stifle growth for sure…and not just George Newman’s outstanding effort.

    Mike

  2. Hi Mike,

    Thanks for stopping by and commenting. Of course your take on the water fees is an extremely informed one. And, you know more of the specifics than I do as you sit on the NCSD board; however, I have heard from more than one developer or potential developer that the issue of skyrocketing fees is placing some projects in jeopardy. I’ve also read in the press, accounts of neglected infrastructure over some 20 years. I’m sure that is contributing to some issues as well.

    I don’t know of any easy answers. I hope we don’t lose the good projects because they can’t afford to be built. Otherwise we will forever be trapped in our unhappy SLO County relationship.

  3. Jesse Hill posted the following comment to the Nipomo Community Yahoo group, which I am re-posting here as it related directly to our discussion on this issue.

    Jesse Hill wrote:

    reply-to NipomoCommunity@yahoogroups.com
    to NipomoCommunity@yahoogroups.com
    date Dec 29, 2006 11:15 AM
    subject [NipomoCommunity] Re: Nipomo Town Square Moves Forward

    Mike and Guy:

    I thought your discussion was well thought out and I wanted to add some additional information to bring the problem of mixed use into focus. For Clara Bergman’s smart growth project on one acre, she is being asked to pay over $300,000.00 by the NCSD for water and sewer hookups. I have Bruce Buel’s calculations and can post them if this becomes an issue. My one acre mixed use project has a new price tag just under that amount.

    Now putting aside the issue of the need to honor a Will Serve Letter, which I would be happy to discuss if anyone is interested, the statement of: “Developers are being asked to pay only for their calculated proportion of costs-nothing more.” I think there needs to be some Clara-fication of that statement. The amount of water Clara’s project is going to use is about 2 acre feet of water per year. My project is about the same in terms of water use. One home on one acre uses 1 acre foot of water each year according to the actual use figures of the NCSD. The cost to hookup two homes on one acre each is roughly $30,000.00 for water and sewer hookups to the NCSD. The problem is that Clara Bergman’s project is paying ten times as much or $300,000.00 for the same or a less amount of water use. It is hoped that Mr. Winn in his tenure as president of the NCSD can fix this anomaly. A three hundred thousand hookup fees on ten condo units is a rent increase of about $250.00/month per unit. This is why the project does not pencil.

    The other important issue to keep in mind is that the NCSD cannot operate in a vacume with respect to price. The real world problem is that a mutual water company costs $150,000-200,000.00 to set up. In a ten unit development, the costs for supplemental water of $15,000 per unit are getting near what the NCSD charges for supplemental water. I fully understand the complexities of the situation in that the County would charge a supplemental fee anyway, but what I am trying to point out is that if the NCSD tries to double the costs of the supplemental water charge, it may well be that as a practical matter the costs to set up a mutual are less and developers may head in that direction. In other words, the sky is not the limit of a supplemental water charge. In terms of actual costs, the NCSD may be limited to a supplemental water project that costs at most $8-10,000,000.00. JH

  4. Jesse,

    Thanks for your follow up comment on this. I’m curious what you mean about the need to honor will serve letters. Do you have some information that will serve letters are somehow not being honored? I, for one, would be interested in hearing more about that issue.

    Your figures are fascinating as well. You indicated that you had calculations. I’d also be interested in seeing thosel. If I understand you correctly the same amount of water use for a residential project is almost 10 times less in terms of hook up fees than is the same commercial use. Do you know why that is? I don’t have any experience in developing any projects so I don’t understand why there is this apparent difference. I would like to know why a commercial project with the same or similar water use as a residential project is surcharged 10 times as much. Please share the calculations of which you spoke, and any reasoning of which you are aware for this discrepancy.

    Perhaps some of our NCSD board members might also be able to shed some further light on this. I have to admit, this is news to me. Mike referenced the rate study. Is there something in the rate study that might justify a 10 fold increase in commercial over residential?

    Thanks again for the comment.

  5. Pingback: NICE Nipomo Development Conference A Success « Nipomo Incorporation

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