Work on The Plaza at El Portal gets a jump-start

Developers say it should be completed by March

jsmith@mercedsunstar.comDecember 11, 2012 

— After almost five years on hold, construction recently started on the final building in The Plaza at El Portal, a business development in north Merced.

The deal that allowed the project to move forward exemplifies the city's new, more business-friendly approach, according to the local developers behind the project.

"There's a different attitude now," said Leonard Oestreicher, co-owner of Moonlight Development Group, LLC. "Before it was like they were doing you a favor if you brought in a project. And now it's, 'How can we help you make this a reality?' -- which is a pleasure to work with."

The project -- a 23,000-square-foot, one-story office complex -- found new life after the city and developers struck an unusual deal.

The city needed a specific piece of property on Highway 59 and Yosemite for a road expansion and improvement project, said David Gonzalves, development services director for the city.

It turns out, Oestreicher's partner Chuck McMahan owned the property and was willing to trade it largely for public facility impact fee credits on their Plaza at El Portal project.

That was "very out-of-the-box" thinking, said Gonzalves, who credits his staff.

"It sounds simple," he said. "It sounds cliché. But if you come around my staff, you'll feel it. They're proud of it. They're hard-working city employees."

At the same time, the city's recent reduction of all public facility impact fees by more than 55 percent helped make the project viable, said McMahan.

"Before we wouldn't even show (potential buyers) the brochure," he said. "We'd show them the impact fees. If they could live with that, then we'd move on."

The building at the corner of El Portal Drive and G Street should be completed by March, according to Oestreicher. Four of the five units have been purchased by medical groups, with only 4,000 square feet left to sell.

"The economy is coming back," Oestreicher said. "The impact fees are down. The city worked with us in a creative way. We expect that the city's going to continue this attitude, this new way of doing business."

Reporter Joshua Emerson Smith can be reached at (209) 385-2486 or jsmith@mercedsunstar.com.

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