For the better part of a decade, Modesto's Village I has been held up as a cautionary tale of what happens when growth is mismanaged and development doesn't pay for its impacts.
Now there's a new chapter in that story.
Roads, parks, landscaping and other infrastructure improvements are costing less than expected. That means there's enough money to pay for most of what the city promised homeowners in the northeast Modesto subdivisions.
"The facts are it was upside down but it's turning right side up," said city Economic Development Director Brent Sinclair. "Prices were under- estimated at a time when prices were going up. Now, prices are going down, and we're doing projects under budget. It's very positive for Village I."
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That rosy scenario counters the narrative of what happened at Village I in the early 2000s. Back then, the city lowered development fees to attract builders and failed to collect enough money to pay for infrastructure.
"Village I" became shorthand for fiscal fiasco and development debacle.
The memory is burned into the city's collective consciousness. More than 20 years after the city launched Village I, it shapes much of Modesto's discussion about development.
Sinclair came to the city in 2007 and gets an earful about Village I in public meetings about growth. He says those opinions don't always match the facts on the ground.
On Monday night, the City Council's Economic Development Committee will hear an update on Village I's prog- ress, and the news suggests the subdivisions might not be such a drag on Modesto after all.
"The story continues. It's making a comeback," Sinclair said.
The comeback came at a high price, remembers for- mer City Manager George Britton. He shepherded Village I through dark days when infrastructure went unbuilt.
"Six years ago there were people with pitchforks and torches saying 'Where's my park, where's my flood control?' " Britton said.
Political courage summoned
Seeing the city out of that mess took political courage from the City Council, said Britton, who now lives in Village I. The council raised development fees and created a second special tax district on top of the one already in place in Village I, charging builders and homeowners much higher fees and taxes.
Then, after a series of what Britton called "gruesome discussions," the council decided in 2006 to borrow $31 million in bonds to pay for public infrastructure improvements in Village I.
"At the time the whole world was collapsing around Village I and they made hard decisions," Britton said of the council. "I think they made the best judgments they could. History will decide if they were right."
With new revenue sources in place, the city was well- positioned when the economic downturn hit. Land prices fell, as did the cost of construction.
City staff took advantage of the downturn's silver lining and "pushed projects out the door," said Central California Building Industry Association chief executive Steve Madison. "The bottom line is, all the projects originally con- templated are going to be built ahead of schedule and the city staff has made really good progress," said Madison, who lives in Village I.
New mind-set for scrutiny
To builders, that's evidence that Village I shouldn't be used as a reason to block new development, Madison said.
He noted that new policies and new staff at the city mean Modesto studies development more thoroughly. A recent marathon City Council discussion about how to finance infrastructure at a planned north Modesto business park shows that leaders scrutinize development with a new mind-set, Madison said.
But what's also true is that Village I will never meet all of its original promise.
Envisioned as a notch above traditional developments, Village I was sold to the public as a well-landscaped, pedestrian-friendly community. But many of the amenities were stripped away as the city "caved to developers," said Councilman Garrad Marsh, who owns land in Village I and has prepared property for development there.
"There's a lot of things that are still missing and are always going to be missing," Marsh said. "All the major (streets) were supposed to be tree-lined, but they stripped that out to lower the development fees. They took out a lot of the things that would have made Village I a truly special area of Modesto instead of just a nice development."
Developer-fee talk coming up
Revisiting Village I is timely, because Modesto is gearing up for a discussion on whether to change the fees it charges developers.
Sinclair said cities often are under pressure to under-charge for infrastructure, because they don't want to put a financial burden on developers and scare off growth. Village I taught the city not to undercut infrastructure cost estimates, Sinclair said.
"One of these days development activity will pick back up again and we want to be ready for that," Sinclair said. "The lesson is we learned from the lessons, and we don't want Village I to be an excuse not to go forward, because we turned that around to something positive."
The City Council's Economic Development Committee meets Monday at 5:30 p.m. in Room 2005, Tenth Street Place, 1010 10th St., Modesto.