Why Mr. Dacquisto is Right About Stillwater

Photo by R.V. Schiede.

On November 19th the City Council voted to move forward on an agreement with Cal Fire to exchange a parcel in Stillwater Business Park for Cal Fire’s property on Cypress Avenue close to City Hall. This basically means we’re finally selling another lot at Stillwater.

Here is the video for the City Council decision to trade a Stillwater lot to Cal Fire for their building on Cypress Street. No cash in deal for city. No underlying debt reduction. No new jobs. No increase to tax base. Under this deal the City actually owes Cal Fire $1million in addition to the Stillwater lot when the transfer is complete. City pays this to Cal Fire by 5 years of rent credits to Cal Fire for remaining in the Cypress Street building. Seems like a wish and a prayer instead of a smart business decision. I voted no but was outvoted 4-1. I hope it works out the way the other council members believe, but I have my serious doubts.

Posted by Michael Dacquisto on Monday, November 25, 2019

The Council voted 4-1 ( Dacquisto dissenting) on this land exchange agreement, which required some reading of the fine print to understand. Essentially, Stillwater Lot #11 is worth $900k less than Cal Fire’s Cypress property. In order to make a fair exchange, the City will agree to provide Cal Fire free rent on their current property over the next five years while they build out their new facility at Stillwater. This free rent situation is valued at 14.6k/monthly in potential income, which, over the five years, will equal the $900k more this property is worth as compared to the Stillwater property.

This is described in the staff report as a “financially neutral situation”.

“The City Council directed staff to negotiate a property exchange agreement that would not impact the general fund” reads the staff report given to the Redding City Council. But wasn’t the whole point of selling a parcel at Stillwater to reduce the impact on the general fund? I mean didn’t we want to get some money out of it?

Oh . . . . they mean no NEGATIVE impact on the General Fund. They mean they won’t lose YET MORE MONEY on Stillwater this way.

Kudos, Council. Applause. Stopping the bleeding is a good goal.

Although, as Mr. Dacquisto pointed out “the day after the proposal is signed the city is now indebted to Cal Fire for approximately a million dollars.” Well there is that.

And, as Mr. Dacquisto also pointed out, there is the possibility that the City could lose even more money on Stillwater by agreeing to this deal. If CalFire manages to construct and occupy the property sooner than five years from now the City will then have to make up the difference between the values of the properties either by reducing or eliminating impact fees or paying CASH. Since impact fees are estimated to be $160,000 for the property, if it takes CalFire less than 4 years to develop their property Redding will owe them real money.

The Staff Report also goes on to state “There will be some transactional costs associated with the agreements that will be paid from the General Fund (escrow fees, environmental assessments, etc.); however, the agreements allow for the property exchange to take place without a significant impact on the General Fund.”

How much for these transactional costs, paid from the General Fund? Unknown. And certainly those amounts could have been included in the Staff Report, couldn’t they? I mean have you ever bought a house without estimating the fees before signing the paperwork?

Stillwater was bought and developed by the City at a cost estimated to be between 23 million and 40 million, depending on whether you believe City leaders or the Grand Jury. (Full disclosure: I was one of two lead writers on the Grand Jury’s Stillwater Report, but am sworn to secrecy on the confidential details acquired through our investigations so I am careful to only use publicly available information here.) The initial financial investment into Stillwater Business Park, made by the City using bond debt, was intended to stimulate the economy in Shasta County by providing more local jobs.

It’s not clear that Cal Fire, an organization already operating here in the County, meets this intent in any meaningful way. While Cal Fire intends to employ several hundred at their new facility, City staff member Mr. Vaupel could not provide any estimate on the number of these jobs that will be new. And noticeably, the staff report on the purchase agreement fails to mention whether this deal meets Stillwater’s intended purpose.

It’s also not clear how good for the City this exchange really is. I mean, yes, they get a valuable piece of property in the exchange (after five years or so) but it kind of reminds me of the deals my 17 year old tries to shaft me with.

Him: “Hey want this $100 Macy’s card? I’ll sell it to you for only $75. I don’t need to buy anything at Macys.”

Me: “I don’t need to buy anything at Macy’s either. So no, I don’t think so. But thanks.”

Him: “But you’d basically be getting a free $25.”

Me: “Actually I’d be throwing away $75 because I don’t have any use for a Macy’s gift card.”

Him: “But there are so many great things to buy at Macy’s”

Me: “ Why don’t you buy them then.”

And so on.

Yes, potentially this deal is sweet because the land the City of Redding is gaining is more valuable than the land they’re getting rid of. And, as Julie Winter told the Council “if we don’t use it we could certainly sell it.” Julie’s series of questions on the topic to Mr. Vaupel read like lines in a play, pre written and rehearsed, then carefully delivered to get the best response.

In contrast to Julie Winter’s studied aspect, Barry Tippin, Redding’s City Manager, seemed quite transparent that this land exchange is, in large part, driven by a desire to own Cal Fire’s Cypress property, which he stated “Councils have always sought to acquire.” “We are here tonight because of broader policies, not just specific to Stillwater. It’s about achieving more grand scale policies put forth by previous City Councils.” Mr. Tippin said.

Let me guess, do these “grand scale” policies involve the City of Redding expanding its current Taj Mahal facilities and spending yet more money on employee, administrative, and maintenance costs?

Wow. This deal is looking less “financially neutral” all the time.

But Tippin wasn’t committing to keeping the property, stating that we “could sell the asset, put that to that (Stillwater) loan . . . You could lease those facilities out, take that lease money and put it to that loan.”

Yes, Mr. Tippin. You could. And Mr. Dacquisto seemed to think this might be the only way to make this deal palatable. Unsurprisingly, such intent to sell or lease the property to pay off loan debt at Stillwater is absent from the City Council’s motion on this matter.

So I’ll believe it when I see it.

It would be the right thing to do though, since according to the Grand Jury the City of Redding is spending almost $1 million annually on maintenance and loan debt repayment for Stillwater. But, wait, the City won’t even be able to sell their new Cypress property for five more years since Cal Fire will still be renting it back, for free.

Despite all this, according to Ms Winter’s statements on Tuesday night, at the very least we have gained something valuable . . . appearances! Someone will have purchased a property at Stillwater and will likely begin building on it soon. This has got to raise the image of the City’s bereft Stillwater property, making it more likely that others might buy in soon, right?

(She refers to this as a “win-win”.)

But this sounds a lot like the reason we sold the first Stillwater parcel to Lassen Nursery back in 2015. Despite the lack of new outside jobs Lassen Nursery would bring, getting somebody to start building at Stillwater had to be a good thing, people in charge seemed to think. Several years later Lassen Nursery is still pending, indefinitely, on a build at Stillwater and the City is still looking for someone, anyone, who will make this look like a cool place to buy and build.

So what do we have here? We have a land exchange deal that is unlikely to bring significant numbers of new jobs to Shasta County, that fails to pay off any of the bond debt that’s owed from the General Fund annually, and that allows the City of Redding to acquire yet another property to renovate, fill with staff, and maintain.

What a bargain.

Wasn’t it only a year ago the Council was voting to declare a fiscal emergency? Apparently we’ve come a long way since then; far enough to begin to dream of fulfilling the “grand scale policies” only imagined by past Councils. Maybe it’s the vision of potential new sales tax dollars dancing in Councils heads.

I didn’t vote for you Mr. Dacquisto, but I’m certainly with you on this one.

What SHOULD the City do with Stillwater? I’d love to hear your ideas in the comments.

Annelise Pierce
Annelise Pierce is fascinated by the intersection of people and policy. She has a special interest in criminal justice, poverty, mental health and education. Her long and storied writing career began at age 11 when she won the Louisa May Alcott Foundation's Gothic Romance short story competition. (Spoiler alert - both hero and heroine die.) Annelise welcomes your (civil) interactions at AnnelisePierce@anewscafe.com
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21 Responses

  1. Avatar Bruce Vojtecky says:

    Isn’t there restrictions on, due to public financing, on employee wages and benefits required. I have been gone from Shasta County for a dozen years and Stillwater was started before I left and there is still nothing out there.
    If Redding wants to save money they should get rid of Barry Tippin and his higher than any governor in the nation’s salary. Bethel runs Redding, apparently, so why keep Tippin?

  2. Avatar Dan says:

    Great points, thank you, Annelise! I appreciate this insightful story and your service on the Grand Jury. And a big thank you to our current bargain on City Council, Attorney Michael Dacquisto for waiving his $300+ hr rate to volunteer for City Council. His jaundiced eye, common sense, and years of courtroom experience examining and cutting through gobbly gook presentations and City Hall hijinks are proving invaluable. The application of common sense and basic math is refreshing.

    • Avatar Annelise says:

      Dan: We certainly need more hard questions asked at nearly ever juncture during the Council meetings. I appreciated Dacquisto’s questions. Thank you for reading and appreciating.

  3. Avatar common sense says:

    Nice job on this article! Dan woke me up when he said common sense. It does appear to be a neutral at “Best” deal the way it has been presented. Julie’s comment about well we can just sell it later if we want would be a LOT more comforting if we were in a different part of the real estate cycle. When we are at the top of this cycle and have to wait another 10 years or so, selling it in say 5-6 years would incur a loss more than likely.

    Whatever happened to the company that wanted to lease things out in there? Did that deal fall apart? We know they ran off the Greenhouse Manufacturing Company years ago. They could have at least one lot sold with some jobs. Granted it would have been small potatoes but some potatoes beat No potatoes.

    Heck, they can’t even put striping on the city streets (Hilltop/Victor) etc…..so I don’t hold out a lot of hope on making a great deal with this deal!

    • Avatar annelise says:

      common sense: I think it would be comforting if the City intended to sell the Cypress property. As it is I think they’ll keep that property which will mean more overhead.

  4. Avatar Alice Bell says:

    The RCC needs to order a full review of Stillwater to see if the original intent of creating it is still viable and, if not, look at options that best serve the interests and pocketbooks of the citizens (and tax payers) of the City of Redding and move forward.

    • Avatar annelise says:

      Alice, yes. However who would the RCC order to do this? What other ideas do you have? I’d appoint you to an advisory committee on it!

  5. Avatar Marcia Greene says:

    100% agree! Mr Dacquisto is a godsend to the citizens of Redding! Only wish we had 2 more!!!

  6. Great analysis, Annelise about an important and troubling Redding topic.

    Here’s one of my suggestions I made a while back: https://anewscafe.com/2017/08/08/redding/stillwater-business-park-meet-stillwater-people-park/

    • … and here was an idea that sister Shelly and I dreamed up, a place/plan called Good Works, to provide just a place for the homeless, but a way to help them feel productive, a place to give opportunities to be appreciated and valued as contributing human beings. It’s a dream, but hey, why not? https://anewscafe.com/2013/07/10/redding/good-works-or-good-works-a-good-dream-either-way/

      • Avatar annelise says:

        Doni: I adore the heart behind both your articles. I see a lot of homeless people in my work. I think the most helpful way too see many people living outside is that they Are often stuck in an earlier developmental phase. Not capable of taking the responsibility we want them too. We don’t help them grow by being angry, or afraid, or expecting more or punishing. How we help them is complex; just like the ways we help kids, seniors and the disabled. But I’m so with you in wanting to find a productive way to do more. Loved reading your pieces.

        • I think you’re right that the way to help the homeless is complex; as complex as the different reasons many people live on the streets. Clearly, society is doing something very wrong, not just in helping the homeless, but figuring out why so many people end up that way in the first place.
          (Sorry to get off topic. Thanks for indulging me with this sidetrack.)

  7. Avatar Shannon Hicks says:

    “Maybe it’s the vision of potential new sales tax dollars dancing in Councils heads.”

    It should be noted that Measure A funds are prohibited from (1) replacing existing police expenditures paid from the general budget, and (2) those new tax dollars cannot be squandered in the general budget.

    The statement made may mislead readers into thinking the funds are for general budget expenditures which they are most certainly not.

    • Avatar annelise says:

      Shannon: These are good goals. Later in this same council meeting Dacquisto pressed for language around the City’s allocation of the new county wide sales tax that would call for the money to be carefully tracked by the city. This is important. Quite often cities and counties do not follow rules prohibiting supplantation of existing funds. Reminds me of another Grand Jury report: https://krcrtv.com/news/shasta-county/shasta-co-grand-jury-finds-ab-109-funds-were-spent-on-general-fund-programs

      To build trust with the public, the City manager and council members need to treat the citizens’ funds and the citizens’ business as if they were their own. Ask hard questions, push for good deals, don’t rush through important items on the consent calendar, etc. Until the Council and manager consistently display careful and critical judgment in public matters it will be difficult to establish trust with citizens, regardless of the stated rules surrounding the sales tax.

      • Avatar Shannon Hicks says:

        Goals are what you get general taxes. Legally-binding directives are found in specific taxes…two very important distinctions. Michael Dacquisto was spot-on to motion for a separate account. The Grand Jury report rightly exposed how local government can shuffle funds and that is why the special tax ordinance includes a provision prohibiting such behavior.

        http://safeshasta.com/the-ordinance/

        Measure A is not asking voters to trust their local government- it is directing funds specifically to provide increased safety and quality of life for our fellow residents. However, suggestions that funds directed to the city will be spent at the whim of the council or staff only serves to undermine what may be our last opportunity in a decade to stem the tide of crime in Shasta County.

  8. Avatar David Green says:

    There was a greenhouse manufacturer that out grew its facilities on Caterpillar Rd and wanted to buy a parcel in the Stillwater business park. They were denied because the greenhouses were sold to users in the marijuana business. The council said it did not fit in with the ideal of Redding.

  9. Avatar James montgomery says:

    On the up side, at least they didn’t pay $100,000 for a study to tell them not to do it, before they did it, this time.

  10. Avatar Shannon Hicks says:

    Goals are what you get general taxes. Legally-binding directives are found in specific taxes…two very important distinctions. Michael Dacquisto was spot-on to motion for a separate account. The Grand Jury report rightly exposed how local government can shuffle funds and that is why the special tax ordinance includes a provision prohibiting such behavior.

    http://safeshasta.com/the-ordinance/

    Measure A is not asking voters to trust their local government- it is directing funds specifically to provide increased safety and quality of life for our fellow residents. However, suggestions that funds directed to the city will be spent at the whim of the council or staff only serves to undermine what may be our last opportunity in a decade to stem the tide of crime in Shasta County.

  11. Frank Treadway Frank Treadway says:

    Those in charge of Still Water Business Park need to re-evaluate the original concept, open it up to today’s business world. And most of all create an inviting entry way into the Park, not a 1-lane pathway, make it a double lane, landscaped-lined drive into the complex, way-finding signage, build an archway with its name, make it inviting to want to be there. Put it at the top of the CoR site page.

    • Avatar Beverly Stafford says:

      It eludes me that “common folk” – like thee’n’me, non-politicians – put forth easily workable solutions to help the city, but the elected officials are blind and deaf to suggestions. Mr. Treadway’s suggestion would do much to make the Park attractive to businesses but only if the Council does, indeed, re-evaluate its purpose. It’s obvious that the original concept was flawed. Just as tearing down the monstrosity that is the parking structure is the right thing to do now, it shouldn’t take 40 years to realize the Park concept needs to be revised.

  12. Avatar Russell K. Hunt says:

    The positive aspect of this is that it makes an excellent work camp for the Sheriff. It was foolhardy for the Board of Supervisors to close the camp at Crystal Creek and the jail annex. Stillwater was delusional thinking and never needed.

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