City Administrator Paul Casey is the king of Santa Barbara in almost every sense. He can fire any single person employed in the city, including the police chief, the fire chief and department heads.
You name it, Casey’s in charge of it, including negotiating the Paseo Nuevo lease extension that is now before the city. I grew up in Santa Barbara and keenly remember the significant hurdles and money involved as we as a community came together to help revitalize our downtown.
The original cost of Paseo Nuevo was more than $360 million in today’s dollars. Now, you would think with the city as the owner of more than 459,000 square feet of some of the most prime and coveted real estate in the world, we should receive more than 17 cents a month in rent for the entire open-air mall. Believe it or not, that’s all we receive as the owners: a mere 17 cents a month.
Pacific Retail Capital Partners, the El Segundo company that leases the entire Paseo Nuevo, has asked the City of Santa Barbara for a 30-year extension on its lease. Casey would like us to believe that this lease extension has no value and that we, as a community, should grant the extension for free.
I can wholeheartedly assure you there is much value in this extension — many tens of millions of dollars in value, in fact — and adding some new paving and light fixtures is not a value add as Casey would have us believe.
With that in mind, if I were Paul Casey, I would offer to negotiate with Pacific Retail to trade the existing lease on the Macy’s building for the 30-year extension it is requesting for the remainder of Paseo Nuevo. Then the city would have full control of both the Macy’s and Nordstrom buildings, the two anchor properties at opposite ends of the two-block mall.
With the city in full control of the two enormous and vacant buildings, I would immediately go straight to Google headquarters in Mountain View, introduce myself as the city administrator and offer two years of free rent and free building permits that would be issued within 60 days of submittal if the company pays for all the tenant improvements necessary to place a Google Campus in the two buildings.
Of course, at the end of the two years, the new rent would then adjust to $3 per square foot for a total of $350,000 per month triple net, which works out to about $4.2 million per year — much better than what the city currently is receiving!
I would then ask the City Council to pledge that money to build housing over the tops of all downtown municipal parking lots. This housing would have an immediate and tremendously positive impact on the revitalization of our downtown, and would be a great income source for the city.
Because I’m still pretending to be Casey, I would start running our city with true business acumen, which begins with taking a real interest in my employees, encouraging and empowering them to work as a team and not allowing the departments to run as completely separate entities.
Next, I would work on educating and uniting my board of directors, the City Council, and help council members to find common ground instead of pitting them against each other.
And, of course, I would follow through on my promise to lead by example and reduce my pay, and not by the pitiful 5 percent proposal.
Finally, as a special treat to myself, I would rent an apartment in the heart of our downtown so I could really understand what it’s like to live and work in our beautiful but struggling little city.
That would just be my first month on the job as the new Paul Casey. Wait till you see what I do in the second month.
— Ed St. George is a Santa Barbara businessman and developer. The opinions expressed are his own.