Fresno Seeks to Shed Its Legacy as a ‘Poster Child for Suburban Sprawl’

Editor’s Note: This is the next installment in an ongoing series of articles examining economic development challenges in cities and localities and the first of two parts looking at Fresno, California. | PREVIOUSLY: Monessen, Pennsylvania

Attracting commercial tenants to property in downtown Fresno, California was a tough sell even a few years ago, according to William Dyck, a local real estate developer.

“If I wanted to get somebody into one of my office buildings,” said Dyck, president of Summa Development Group, “I had to convince them that they wouldn't be mugged when they walked to their car.”

He added: “Post-1970s, downtown Fresno had come just grotesquely out of favor.”

Nobody wanted to be there, he said, vacancy rates were high, buildings were boarded up.

Those days are beginning to fade.

Now, Dyck explained, “people are calling me, saying ‘hey, what do you have available?’ The landscape has dramatically changed.”

‘The Kool-Aid’

Part of what’s driven that change has been a smattering of government programs and policies at the local, state and federal level.

A planned station in the city that would be along a high-speed train line in California is especially notable—although how the rail project will be fully funded remains unclear.

But high-speed rail is only one of the public sector initiatives that has helped propel what some believe will be a renaissance in downtown Fresno, a transformation that involves not just businesses filling up new office space, but also plans for substantial new housing.

Outgoing mayor Ashley Swearengin, a Republican first elected in 2008, made downtown revitalization in Fresno a hallmark issue during her time in office.

Earlier this year, the city enacted a sweeping overhaul of the municipal code that guides real estate development in downtown. It was a push to make projects there easier to do and more aligned with city priorities. At the same time, Fresno has offered financial incentives, such as fee waivers, to build in the area.

The state, meanwhile, pledged in September to direct $70 million to the city from a cap and trade program, which aims to combat climate-change. And the U.S. Department of Transportation, in 2013, awarded Fresno a $15.9 million grant to revamp the site of a 1960s-era pedestrian mall on Fulton Street.

“The revitalization has been talked about for years,” said Dan Zack, Fresno’s assistant planning director.

But now he describes it as having hit a tipping point of sorts.

“Everyday, a couple more people drink the Kool-Aid,” he said. “We on a pretty regular basis show investors around from the Bay Area and southern California, who never would have thought about building or investing in Fresno. Now they’re considering it.”

A Regional Hub

Fresno is about a 190-mile drive southeast from San Francisco.

With roughly 520,000 residents, it is located on the eastern flank of the Sierra Nevada mountain range, in California’s Central Valley—an important agricultural region for the U.S. The area around the city is known for farm products like almonds, grapes, poultry, milk and cattle.

There were about 477,000 jobs in and around Fresno in 2015, U.S. Bureau of Economic Analysis estimates show.

The employer providing the most positions in the city last year was Community Regional Medical Center, a hospital with 4,789 employees, according to Fresno’s most recent annual financial report. The city itself, two other medical centers and California State University were among the other top employers.

“Downtown Fresno is our biggest job center in the region,” said Zack.

While agriculture has long provided a foundation for the local economy, Zack pointed out that Fresno has not traditionally had a high-wage industry akin to film and television in Los Angeles, tech in Silicon Valley, or the seaports found in cities along California’s coast.

These days, however, the local technology sector is showing signs of strength, according to Aaron Blair, who is president and CEO of the Downtown Fresno Partnership.

“The tech scene is growing faster than anything else in downtown,” he said.

At the forefront of this growth is a company called Bitwise Industries.

Bitwise has several business lines. These include its Geekwise Academy, focused on tech-centric education and training, and Shift3 Technologies, which develops custom software and provides other services. Bitwise also offers workspace for startups and small businesses.

Dyck teamed-up with Bitwise about two years ago. During that time, he said, he’d worked on projects to build-out about 50,000 square-feet of space for the company. That figure is now set to quadruple in the next 24 months, Dyck said, to about 200,000.

“Those are projects already on book, under construction now,” he added.

Redoing the Code

Much of the new construction in Fresno during the past few decades occurred north of downtown.

“For 50 years, Fresno has sort of been a poster child for suburban sprawl,” said Zack.

A key step the city took to encourage new growth in Fresno’s core was the recent makeover of the real estate development code.

“Our old zoning code was put in in ’62,” Zack said. “It was really designed to suburbanize downtown.”

The Fresno City Council adopted an updated version of the code for downtown in October.

Zack said the new rules make clear “you can do an urban building, like you might see in San Francisco, or cities like that. We want mixed use. Ground floor retail is great. Bring the building up to the back of the sidewalk. Line the bottom with storefront windows. Offices, or apartments, or hotel rooms above, parking below or behind so it doesn’t interfere with the pedestrian experience.”

This differs from the prior guidelines, which placed tighter restrictions on mixing residential and commercial uses under one roof, called for buildings to be set back away from sidewalks, imposed requirements for greater parking and placed stricter limits on building height.

“The change to the building code is significant,” said Dyck. “What we had for so many years was a written code that did not match with what the city was trying to achieve.”

He noted the height provisions in particular. “Obviously in downtown you want density. You want to go vertical. And that was a limiting factor,” he said. Loosening rules that curtailed sidewalk seating at eateries was another change that he mentioned as a positive step.

Blair, with the Downtown Fresno Partnership, said city permitting for breweries and restaurants serving alcohol used to cost up to $10,000. Under changes the city has now made, that’s no longer the case. The cost savings are significant for businesses owners.

“That was the difference between us getting a gastropub we just recently landed in downtown,” he said, “versus it going to a more popular part of town.”

‘You Don’t Send a Picture of the Home Depot’

Zack said about 500 apartments have been built in downtown Fresno in the last decade.

Over the next 10 or 15 years, he said, the city’s goal is to see 10,000 more added.

But creating a downtown where people want to live and spend their time is about more than just building apartments, and some of what people may be looking for in a city center is determined by the development code—whether they realize it or not.

“If you think of your favorite downtowns, whether it be Manhattan, or Nantucket, or Santa Barbara, or San Francisco, they’re all different, but they have certain things in common,” Zack said. “Short, walkable city blocks, wide sidewalks, storefronts lining the streets.”

He added: “When you send a postcard to grandma back in Wisconsin, you don’t send a picture of the Home Depot shopping center. You send a picture of the downtown skyline. And if you don’t feel good about that part of your city, you really don’t feel good about the whole thing.”

The next installment of this series will look at financial incentives extended to developers in downtown Fresno and how California’s high-speed rail project fits with local revitalization efforts.