The Mall To Nowhere – Mendocino Crossings (Masonite Monster Mall)


From Cliff Paulin

3/16/09 Ukiah, North California

”Mendocino Crossings”:
A Metaphor for Our Time in the Ukiah Valley & Mendocino County

Much has been made of the proposed regional retail shopping center, Mendocino Crossings, being proposed by Developers Diversified Reality (DDR) at the former Masonite site just north of Ukiah.  While the name Mendocino Crossings was likely chosen by DDR to represent the Ukiah Valley as the county’s center of trade, the name also reflects the fact that our community faces a major decision concerning the direction we want to see our valley move in.

In the direction proposed by DDR, we have a model that promotes suburban sprawl: a development outside the city limits and urban core of Ukiah that requires conversion of valuable industrial land into an island of retail in a sea of parking lots.  This is a model that undermines local business, brings low wage service sector jobs, puts strain on city and county resources, brings increased traffic, and causes further homogenization of the unique character of our county.

In the other direction is community self determination that builds on local assets by constructing an infrastructure that will provide sustainable economic growth for the future via the reactivation of light industry, value creation for local products, the creation of living wage jobs, and the relocalization of our economy which is so vital in these uncertain times.

The Site

The former Masonite site purchased by DDR is an 80-acre parcel just adjacent to Highway 101 and the Northwest Pacific Rail Line.  The site is near to but not in the flood plain of the Russian River.  For approximately 50 years the site operated as a wood products manufacturing facility, combining forest products and a number of chemicals to create Masonite and other finished wood products.

The plant was cited for numerous air quality violations over the years.  Additional concerns were raised in the community about undocumented releases of chemicals into the air and water.  A one-time Air Quality Management Director became famous for calling the omnipresent smoke emanating from the plant a “plume of crap”.  Concern remains in the community over the health effects from both the operation of the site and the lingering impacts of an impacted environment.

The site was also a significant source of jobs for community members and revenue for the county.  Since the plant closed, many individuals have envisioned the return of a manufacturing or light industrial base to the site in order to stimulate economic growth.  The site is zoned for industrial usage, a zoning designation that does not allow for retail commercial activity.

DDR purchased the former Masonite site from the Masonite Corporation with the intention of creating a regional retail center upon the site.  This sale occurred despite the fact that the property is zoned exclusively for industrial usage.  At the time of the sale, there were other offers on the table to purchase the property and retain its use for industrial purposes.

A local developer, Chris Stone, has stated that he made an offer higher than DDR’s, and would have used the site to produce Lyocil, a fabric made from wood fiber in a process that would have utilized much of the then-existing infrastructure.

The Company

DDR is a Real Estate Investment Trust based in Beachwood, Ohio, a suburb of Cleveland.  They own and operate more than 730 major retail properties in 45 states, Puerto Rico, Brazil, Canada, and Russia.  Their total operations include more than 157 million square feet.  In 2007, DDR had a net income of $276 million. However, in the past year DDR’s stock has plummeted from a high in 2007 of around $70 per share to a low of under $2 a share as of March, 2009.

While DDR is the public face for the purchase of the Masonite site, a review of county records indicates the title to the property is actually held by DDR d/b/a Mendocino LLC.  The intention for doing this can only be speculated upon, but the ongoing questions of remediation and potential liability from existing toxic chemicals may have inspired DDR to provide themselves with a level of insulation.

DDR’s proposal

DDR has proposed the construction of a 500,000-700,000 square foot retail complex that would be anchored by several large box stores and completed by a number of smaller retail spaces as well as restaurants and other services.  The initial plans showed a parking lot for 3900 vehicles.  DDR has indicated that their preferred two anchors for the project would be Costco and Target.

There is considerable interest in the community for a Costco, which does have higher labor standards than most big box stores.  However, it should be noted that Costco was in negotiations with the owner of the Airport Business Park to site at that existing retail location.  There is disagreement as to why those negotiations failed.  Some parties allege that DDR came to Costco behind the scenes and promised lower rent, while others assert Costco opted out of the Airport Business Park for other reasons.  It is likely that if the Masonite project does not come to fruition and Costco is truly interested in locating in Ukiah, that the Airport Business Park will be the location.

The Sell

Because DDR purchased an industrial zoned parcel, they are required to have a land use designation change in order to build a commercial retail center.  Normally this type of change would be requested as a general plan amendment before the County Planning Commission and Board of Supervisors.  However, this process would undoubtedly result in a large public outcry in favor of retaining current zoning.  So DDR decided to utilize the ongoing Ukiah Valley Area Plan (UVAP) update process to accomplish their goal.

The UVAP is a subset of the larger Mendocino County General Plan, and is designed to guide land use planning for the next 20 years.  The UVAP update process began in 2006 with the county hiring MIG, a consulting firm based in the East Bay to assist the county planning team in updating this critical document.

At the first UVAP community meeting, residents provided a clear vision: a valley that was more walkable and cyclable, that protected valuable agricultural land and open space, and favored compact development of locally owned businesses.  Given this clear picture many members of the public were taken aback when at the next meeting they were asked to decide where, and not if, a 700,000 square foot regional retail shopping center should be sited in the Ukiah Valley.  It was clear that DDR was attempting to use the UVAP update process to circumvent normal channels for obtaining a change in land use designation.

This attempt to circumvent the normal planning process met with fierce opposition from many community members.  DDR quickly realized that they would need to find a more palatable way to sell the project, and hired a public relations firm, Fair and Powerful Communications (FPC) to host a series of “community forums” to listen to the community’s needs.

These forums were clearly a means to gather information about Ukiah to better tailor the sales pitch.  Predictably the next time DDR showed up in Ukiah they had a number of beautifully drawn renderings done by local architects Ruff and Associates.  These drawings had solar panels on roofs, LED street lights, a transit hub, and copious trees spread through out the 3900 vehicle parking lot.  However, when pressed as to the plan of development, DDR admitted that the big boxes would go in first and the rest as money and priorities allowed.

The Impacts

DDR and their proponents claim that their retail development is necessary to stop “leakage”, an economic term for money from one region being spent in another.  However, this argument fails on several points.  As part of the UVAP process the county commissioned an economic analysis in 2006 to examine the flow of money into and out of the valley and the availability of currently zoned retail land.  This study found that ample undeveloped, underdeveloped, and unutilized commercial retail space exists in the Ukiah Valley to more than satisfy the projected growth over the next 20 years.

The study also found that while there was economic leakage occurring in Mendocino County the largest areas were in expenditures for energy (gasoline, propane, natural gas, and electricity) and home mortgages.  Retail leakage was a relatively minor loss of dollars from the county.  In addition, the study and anecdotal evidence shows that people often leave the county to shop for social and entertainment reasons.  Shoppers from Mendocino County head to Sonoma for a change of scenery, to visit friends, and to get out of the area for a day, just as Sonoma shoppers go to Marin County, and Marin shoppers go to San Francisco.

What the county study did clearly demonstrate was the fact that a major commercial development at the Masonite site would capture significant portions of the retail dollars now being spent at existing businesses throughout the market area, a phenomenon known as cannibalization.  This cannibalization would negatively impact local retailers, who provide higher wage jobs, keep a greater portion of revenues and profits in the community, return more to the community in the use of local services, and contribute to the overall well being of the community.  In addition, because development at the former Masonite site would be occurring in the unincorporated portion of the county, sales captured there would decrease sales tax revenue for the City of Ukiah.

The Community Responds

The community has responded with a resounding voice in opposition to the proposal by DDR.  While there is by no means unanimity on this issue, the public has been extremely vocal throughout the UVAP process and in front of the Board of Supervisors that this proposal does not fit the community vision.

One particularly clear demonstration of this sentiment was the race for both First and Second District supervisors.  During the June primary, two candidates for the second district seat came out strongly opposed to rezoning, while another was strongly in favor and another failed to state a position.  Those in opposition garnered significantly higher vote totals and faced each other in the November 2008.  In the First District, the candidate who vocally opposed the rezoning won with a wide margin.  Also of note is that the former supervisor in the Second District chose not to run for re-election.  The significant public backlash to his deciding vote to allow for the UVAP Environmental Impact Report (EIR) to consider the DDR development is a likely reason for this decision.

Substantial public comment is expected on the UVAP EIR when it is presented in early 2009 if the DDR proposal has not been given serious scrutiny.  This will be an opportunity for community members to again voice their opinion on the direction of development in the Ukiah Valley.

While the community has remained steadfast in opposition to DDR’s vision for the former Masonite site many community members recognized that it was also critical for alternative uses to be proposed.  In response, the Ukiah Valley Smart Growth Coalition sponsored a contest asking community members to suggest alternatives.  Twenty-seven entries were received and judged by a panel of community members consisting of a dozen+ local business and finance people.

Contest entries came from across the county and from all ages—from students at Tree of Life Charter School, from business people, and venerable elders in our community.   Most entries were from residents of Ukiah, but several came from Potter Valley and Willits, demonstrating the significance that the former Masonite site plays in Mendocino County.

Entries were judged using criteria developed by members of the Smart Growth Coalition.  These included how well the proposal leveraged existing infrastructure such as rail, river, and road access; the environmental impacts of the proposal; the utilization of local services and products; the level of skilled workers employed; the likelihood of bringing money into the community; and a general sense of viability.

Several judges noted that a number of the proposals would benefit from having other proposed uses take place concurrently, and that doing so would enable full utilization of the site.  Examples of such synergistic uses include forest product use, renewable energy generation, food production, myco-remediation, and biofuel production.  The judges felt that synthesizing these concepts into a single project presented the most viable potential for keeping the site industrial zoning.

One exciting model that has been considered is the ZERI Eco-Industrial Park that is gaining prominence in Europe. ZERI sites aim to utilize a series of businesses so that the “waste” from one industry can be the feedstock for another.  Such systems utilize all biological “kin”-doms in a manner that mimics natural ecology and creates value-added products at each step of the process.

DDR’s Next Step

Countywide, residents have been inundated with a series of slick mailing pieces commissioned by DDR to sell the project to the community at large.  These mailings have been on natural colored and recycled paper, and feature members of the community exhorting the virtues of the project.

It seems likely that this move is in anticipation of a voter initiative financed and run by DDR to have voters change the zoning designation at the former Masonite site, in order to circumvent the Board of Supervisors.  Community members are encouraged to remain vigilant, and will be called to volunteer their time and efforts to defeat any such initiative if it should be put on the ballot.

Conclusion

The former Masonite site provides an ideal location for green industries that foster economic localization, environmental sustainability, value added agricultural products, and social equity.  The need for living wage jobs and utilization of existing natural and human capital resources has never been so clear.  In an age of rising energy costs, global economic instability, and threatened biological systems, we need to look to economic development that will rebuild our infrastructure using the principles of green technology that are at this very moment being promoted by our state and national governments.  Mendocino County needs to take the forefront in providing working models, not falling back on discredited systems of consumption.  There has been a plethora of news stories citing the failure of suburban sprawl and shopping malls across the U.S. in recent times.  Investors are increasingly abandoning that model and turning towards ventures that promote and utilize green energy—not only because they are good for the health of the environment and the community, but also because they represent the future of sound financial investment.  The low wage service jobs that might possibly be created at Mendocino Crossings, the sales tax revenue shifts and local business cannibalization will ultimately  lead to the further tattering of the social fabric of the Ukiah Valley and Mendocino County as a whole..

We do stand at an historic crossroads, and it is the duty of all community members to advocate for the vision that represents our values.  We express our ongoing gratitude for the multitude of dedicated and creative people who have lent their time and energy to this project so far, and we look forward to engaging even more individuals in this effort.
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Update:

See also Masonite development could go to voters – Press Democrat→
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