Written by David Castellon
The chances of downtown Fresno’s Rowell Building becoming home to the Fresno County District Attorney’s Office appears to have dropped precipitously.
“On Friday, July 13, the County of Fresno received a letter from River Park Properties III indicating that they have elected to terminate their lease agreement with the county for the Rowell Building, as River Park Properties III has been unable to obtain the necessary new market tax credits they required to remain in the lease,” states an email issued this afternoon by the Fresno County Chief Administrator’s Office.
Building owner Lance Kashian & Co., which operates River Park Properties, had signed a 10-year lease-to-own agreement late last year with the county to occupy 73,210 square feet of the Rowell building — essentially all of the office space but the bottom floor — at 2100 Tulare Ave.
But in January, the company informed the county it had to break the agreement, reportedly due the inability to acquire in time federal new market tax credit investments for the Rowell Building, a more than century-old building that had been undergoing a top-to-bottom renovation since February of last year.
The federal program is intended as a way to attract private investment into rehabilitation projects selected by the government in low-income and impoverished areas of the country, giving investors tax credit incentives.
Rather than scrap the $15.2 million lease agreement, the Fresno County Board of Supervisors gave River Park Properties III until July 15 to try to qualify for the tax credit, so the renovations and the lease with the county could move forward.
“As you know, we have been working diligently to complete the Rowell Building construction to obtain the necessary new market tax credits needed,” states the letter signed by Lance Kashian and Co. CEO Ed Kashian. “Simply put, because of such a late start, we are not able to obtain the new market tax credit [NMTC] required. Unfortunately, the landlord is not yet in a position to waive its contingencies set forth in Section 35 of the lease.”
That section of the agreement refers to the landlord — River Park and Lance Kashian & Co. — and the tenant agreeing on designs and modifications in the leased spaces and states, “drawings will not be commenced to be prepared by Landlord until this lease is fully executed.”
That section also refers to when the lease may be terminated and the return of any money owed to the tenant — the county — in such an event.
“Therefore, landlord must regrettably elect to terminate the lease,” Kashian’s letter continues.
Officials with the company couldn’t immediately be reached to clarify and elaborate on the letter or to discuss how not getting the tax credit may affect the Rowell Building renovations, which appeared to have slowed down since early this year.
After Lance Cashion & Co, broke the agreement in January, county officials began looking at other possible sites to house the DA’s Office, with CAO Jean Rousseau noting the vacant Crocker Building at the northwest corner of L and Fresno streets as a possible alternative, though the available space there is smaller — 50,344 square feet.
When asked if the latest letter will result in the county launching negotiations to lease the Crocker Building, Jordan Scott, a spokesman for the county, said, “We just got the letter.”
Still, the door may not be closed on the Rowell Building, as Kashian’s letter continues, “It is still our desire and hope to finalize this transaction with the county in the near future, so we will continue to work towards completing the NMTC process and other necessary tasks.”
It ends with Kashian inviting county officials to discuss the matter further.
As for whether county leaders consider leasing the Rowell Building closed, the email from the CAO’s Office states, “At this time, the county has not made any final decisions regarding the property or alternative measures and is evaluating all available options. More information will be made available as it develops.”
The soonest the Board of Supervisors might be formally presented with the letter about the Rowell Building and begin discussing as a group on what actions to take would be board’s next meeting on Aug. 7.