‘Fresno is a hot market.’ $250 million investment sparks developer interest across the US

The infusion of millions in state funding into Fresno’s downtown has placed the city in a national spotlight.

The city began to see a spike in interest from developers and investment firms from across the country after the announcement of the state’s $250 million investment for improvements to the city’s downtown infrastructure, a city official told The Bee.

Multiple experts who spoke with The Bee say the investment will help cut down on development costs, making downtown more attractive and leading to more private investment. But some also warned that careful attention needs to be given to the long-term viability of the state money and that planning has to be done right.

Lance Lippincott, director of economic development for the city, said Fresno has gone from a few leads per month to up to 10 from developers and investment firms outside the area following the announcement of the state money. He would not provide details, but said, in general, the interest has included brokers calling the city to request information about available land or asking for information on historical buildings.

“We are starting to see quite a rise,” he said. “A lot of them are out-of-area investors, which is pretty cool.”

The leads have also included interest in rehabilitating vacancies. Although, there’s not much commercial vacant space downtown. The downtown area has a 4% vacancy rate for retail space and a 6.1% vacancy rate for office space, according to figures from the city provided to The Bee.

Lippincott wouldn’t release the identity of any of the developers or investment firms, but he said the city has seen interest from across the country, and as far away as New York.

“Fresno is a hot market right now,” he said. “There’s a ton of opportunities.”

That means growth for Fresno in the long run, and more jobs and recreation for its residents, he said.

There’s no timeline for when the infrastructure improvements are expected to be completed. Nonetheless, Lippincott said the state investment and the private dollars and development it attracts, will transform downtown.

“I think it’s going to be a more modern downtown,” he said.

It’s time to start rethinking downtowns in North America, said Karen Chapple, a professor of city and regional planning at UC Berkeley.

“This is very exciting and could be transformational for Fresno,” she said.

Will Oliver, vice president of business services for the Fresno County Economic Development Corporation, said he believes the growing outside interest is jet fuel for downtown revitalization and the ability to create more workforce housing and jobs.

A big chunk – $80 million – of the $250 million is for overall infrastructure investments to promote housing development for 10,000 residents and other neighborhood revitalization efforts.

“I do believe the momentum for downtown with this investment is palpable,” Oliver said, “and I think that folks are taking notice and wanting to know more, and I think it will lead to a series of private investment to follow suit.”

Dwight Kroll, president of Kroll & Associates LLC in Clovis, which focuses on downtown revitalization programs, among other planning projects and processes, agreed that the $250 million investment makes downtown investments more attractive.

If developers are on the fence about projects because they’re unsure whether they’ll get a return, Kroll said, such funding might make projects more affordable for developers.

“It might get them off the fence, and go, ‘Oh, OK, maybe I’ll take a little better look at this site’,” said Kroll, who served as the planning director for the city of Clovis from 2009 to 2020.

From a city standpoint, he said, if you help a developer get to that point, it’s beneficial because they will then invest additional funding that will help increase employment and it will increase the taxable returns for the city – particularly if it’s retail.

“Maybe that’s enough to kind of get the ball rolling,” he said.

Tracy Hadden Loh, a fellow at the Anne T. and Robbert M. Bass Center for Transformative Placemaking at Brookings Metro, said an issue that has been a barrier for development in Fresno is the age and capacity of the infrastructure.

“This investment from the state is going to solve that infrastructure problem,” she said, “and so, that increases the attractiveness of the market to capital.”

But bottomline, she said, the build environment changes very slowly, and it’s difficult to tell what the impact is going to be.

Officials need to be able to produce housing and jobs, he said, ahead of the high speed rail and Fresno’s downtown station becoming operational.

“I think that’s going to be key,” Oliver said, “for residents and for our economy.”

Kroll said it will also be critical for city officials to pay attention to the long-term vitality of the state’s investment.

“Anytime a community gets a grant like that it’s very important that they look at the long-term viability of it because $250 million sounds like a lot of money,” Kroll said, “but you can run through that pretty quickly, and at the end of it, if it’s not generating an economic return, you haven’t accomplished what you’d hoped to.”

Downtown Fresno, Kroll said, is worth preserving and revitalizing. “What a vibrant downtown does, is it strengthens the economy because bringing so many people and jobs into proximity with each other… boosts productivity,” Loh said, “and a stronger economy has benefits for all workers and firms.”

There are also benefits for residents’ quality of life , Loh said, besides economic prosperity.

“The social and civic opportunities that a vibrant downtown can offer,” she said. “A place where people can be together, whether that’s for a celebration or whether it’s for a demonstration.”