Modesto won't be buying downtown block

Modesto has decided not to purchase an entire city block that city officials had envisioned eventually redeveloping and contributing toward the revitalization of downtown.

The city entered into an agreement in early September with the property owners for the approximately 2.75-acre block, which is bordered by Ninth and 10th streets and E and F streets. The property has several tenants including the El Sol restaurant, a church and climbing gym.

The property is owned by Victor and Iris L. Martinez, trustees of the Martinez Trust.

The agreement called for Modesto to pay $3.1 million, but the city had 120 days to conduct its due diligence — including getting its own appraisal — and could back out of the deal for any reason or no reason during that time.

Council members who voted for the deal in September said Modesto essentially was getting a free look at the property to determine whether it made sense to move forward with the purchase.

The City Council met in closed session several times to discuss the purchase. Council members voted 6-0 on Dec. 12 in closed session not to buy the block. (Councilwoman Kristi Ah You missed that discussion and vote.)

“After careful consideration, the City Council has concluded that while a highly desirable property in an excellent location, we could not agree upon a price and term that were in the best interest of the city moving forward,” interim City Manager Joe Lopez said after the closed session.

The city conducted its own appraisal but refuses to release it. The appraisal cost $5,000, according to the city. The agreement states the city and property owners could negotiate another price if the appraisal came in lower than the $3.1 million.

City Attorney Adam Lindgren cited a section in California’s Government Code that states appraisals become public after the property “has been acquired or all of the contract agreement obtained.” But the section does not prevent the release of an appraisal if a government body decides not to purchase the property.

Mayor Ted Brandvold was the only council member not to support the September agreement. He said he was concerned that the city did not have a solid plan for what it would do with the block, that it could not afford to buy the property, and that the money could be used for more pressing problems.

City officials had talked about Modesto becoming a landlord and collecting rent from the current tenants and eventually developing the property. Potential uses included a public safety campus and working with a developer on a mixed-use development that included housing.

“I’m happy with the decision,” Brandvold said Friday about the council vote.

This story was originally published December 25, 2017 at 3:49 PM with the headline "Modesto won't be buying downtown block."