Community

Merced pitches downtown housing and retail project

Leaders say the Downtown Commons project in the heart of Merced, seen here in January 2016, will be an opportunity to appeal to students and downtown workers.
Leaders say the Downtown Commons project in the heart of Merced, seen here in January 2016, will be an opportunity to appeal to students and downtown workers. akuhn@mercedsun-star.com

Merced leaders are looking to spur a retail and housing project downtown, which would come on the heels of investment in the same area from UC Merced.

Leaders this week announced the Downtown Commons project, which would have retail space on the first floor and housing or offices on the two stories above that, saying it’s an opportunity to appeal to students and downtown workers.

Leaders have requested proposals from potential development partners for the building that would go up on 1.4 acres at N and 18th streets. The city owns parking lots there and has begun negotiations with the owners of the Fluetsch and Busby Insurance building next door, city staffers said.

“We want to hit it out of the park on this project,” City Manager Steve Carrigan said Friday, adding that the building could serve as a template for more housing downtown.

The project would have about 50 units, city staffers said, and may allow for office space, too.

The downtown housing is spurred, Carrigan said, by the $45 million UC Merced Downtown Center, a 67,400-square-foot building capable of housing approximately 370 employees that broke ground in June and is expected to be open by fall 2017.

Leaders this week announced the Downtown Commons project, which would have retail space on the first floor and housing or offices on the two stories above that, saying it’s an opportunity to appeal to students and downtown workers.

The plan was music to the ears of the Downtown Neighborhood Association, according to Cindy Morse, the president of the coalition of homeowners.

“Frankly, the success of the historic downtown neighborhood along with the downtown businesses go hand in hand,” she said. “We believe this project will add much to the downtown lifestyle.”

City staffers are looking for a developer with experience in building multifamily and mixed-use projects, according to David Gonzalves, director of development services. Proposals are due by Aug. 26.

City staffers said they expect to do a parking study on downtown Merced, which has about 2,500 spaces, before the project moves forward.

Frank Quintero, the city’s economic developer, said the city has not taken the lead on a large project such as the Commons since 2012, when Gov. Jerry Brown dissolved redevelopment agencies statewide. Through the Merced Redevelopment Agency, the city led the work on the Merced Lofts and the restoration of the Merced Theatre.

“The city desires to be its own economic engine,” he said. “The Downtown Commons is the first step in the right direction.”

Staffers have estimated the project will take 18 months to finish.

It’s the tightest it’s been in the 27 years I’ve been in real estate. Rents are going up because there are very few rentals.

Andy Krotik, real estate agent with Coldwell Banker Gonella Realty in Atwater, on the rental market

The project announcement comes at a time when Merced and its surrounding communities are short on places to rent, according to Andy Krotik, a real estate agent with Coldwell Banker Gonella Realty in Atwater. The shortage, he said, is due to UC Merced and its growing faculty and student population.

“It’s the tightest it’s been in the 27 years I’ve been in real estate,” he said. “Rents are going up because there are very few rentals.”

For example, he said, his office oversees about 850 rentals in the Merced area and fewer than a dozen are available.

The number of people coming to Merced is expected to rise as UC Merced moves into its second phase of growth in an effort to have enough space for 10,000 students.

Carrigan noted development on apartments is expected to move along when the city and Merced County finalize their tax-sharing agreement. Room for about 2,400 beds is expected to go up in the next four years in complexes across Lake Road from the university.

“I really believe we can create a template at 18th and N (streets),” he said, “and use it in other parts of downtown.”

Thaddeus Miller: 209-385-2453, @thaddeusmiller

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