Tracy council directs staff to develop vacant-building options after staff report; will pursue economic-development steps

City staff briefed the Tracy City Council on March 18 about retail vacancy trends and possible policy responses, and council voted to direct staff to pursue a set of actions that emphasize continued economic-development outreach and additional study of regulatory tools for recurring vacancies.

Forrest Epps, the city—s director of community and economic development, presented data showing local and regional vacancy patterns, noted several confirmed forthcoming leases and tenant changes, and described a menu of policy options for council consideration. Epps said the West Valley Mall accounts for a sizeable portion of the city—s retail vacancy rate and that national trends in online retail and construction costs are affecting where new retailers choose to locate.

Staff listed five possible approaches: 1) a vacant-building registration program (owners register properties left unoccupied for a set period and allow periodic inspections); 2) a vacant-building fee to offset heightened enforcement and inspections for chronically vacant properties; 3) a vacant-building tax (a ballot measure requiring voter approval if used for general or special purposes); 4) continuing and expanding economic-development work to attract and retain tenants; and 5) planning and general-plan actions to encourage reinvestment (for example, housing near retail or targeted focus planning around older shopping centers). Epps said retail vacancy in the city is uneven but that new retail in under-served neighborhoods such as Tracy Hills and Ellis remains likely because of unserved population growth.

Epps also announced several pending private-sector transactions: a Trader Joe—s tenant improvement at 2530 Nagley Road, Crunch Fitness occupying a former Orchard Supply Hardware building on West 11th Street, and a Sutter Health clinic planned for the former Rite Aid at 599 E. Valpico Road. Staff told council these moves show market activity even as other shopping centers adjust.

After discussion, council members said they want to prioritize economic-development incentives and retention work while preserving options to use regulatory tools if vacancies become chronic or create visible blight. Council asked staff to continue recruitment and retention efforts, return with a needs assessment and potential incentive ideas (grants/loans/facade programs and streamlined permits), and also to come back with more detail on how a registration program or fee would be structured, including legal analysis and a proposed fee schedule and exemptions. Several council members said any fee must be carefully tailored so it corresponds to services provided and does not unduly penalize new development or first-generation tenant turnover.

Council took a motion to provide direction to staff consistent with the discussion and the motion passed on a roll-call vote. Staff said it expects to return with more detailed proposals and legal analysis; staff also noted it will monitor state legislation that could affect local vacancy policy work.