Bright Lights, Small City 

Richmond's latest bid for renewal rests upon a plan to become a center of Hollywood set design. But first, the finances must survive.

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But by now, federal officials had grown tired of Richmond. For five years, the city had sat on the $15 million retrofit fund, dithering about how to spend it. Unless the redevelopment agency spent the cash by March 31, 2003, the feds would take it back. Richmond had no choice but to run with the project and gave Assembly Plant Partners a deadline of September 5 -- nine months after the contract had been signed -- to produce an independently verified document detailing how much money they had at their disposal and what form the assets took.

The elusive figure at the center of this controversy was Gerald Shmavonian, an old friend of Silva's and scion of a Fresno family real-estate empire. Shmavonian was supposed to be the money behind Assembly Plant Partners, but while he assured the city that he was worth $31 million, he never produced any proof. When September 5 came and went, with no word from Assembly Plant Partners, Redevelopment staffers decided to investigate Shmavonian's assets on their own. Not only did they conclude that he didn't have the money Assembly Plant Partners agreed to invest in the project, he may have been worth as little as $2.2 million. (Shmavonian could not be reached for comment.) "Let's just say the values that we thought they had fell well behind the $26.5 million that was their full obligation," Satre says. "I liken it to you claiming you had a $50,000 car, and everyone else says, 'You've got a Hyundai. '"

Silva's response to this claim is certainly original. While it's true that he and his partners didn't submit independently verified financial information, he says, the letter of agreement with the city never stipulated that they had to in the first place. "It wasn't our job to verify these assets," he says. "He made a declaration of what it was worth, and it's up to them to verify it. That was the agreement." Silva may have spoken out of pique; after all, he was frantically trying to put together a new roster of investors when I called for an interview. After the Richmond Redevelopment staff began investigating Shmavonian -- which, among other things, uncovered an 1998 arrest for shoplifting -- the real-estate magnate abandoned the project. Silva still resents the way his friend was treated. Not only did city staff lowball the value of some of Shmavonian's properties, he says, but digging up his arrest record was simply gratuitous and rude.

"They found stuff on the Internet that was the result of accusations that turned out to be false," Silva says. "Isn't this America, where you're innocent till proven guilty? He just got tired of it, he said, 'You know, I can't deal with this. '" At one point, an exasperated Silva went so far as to claim that redevelopment bureaucrats are killing his dream by attrition, simply because they're too unimaginative to appreciate its elegance. "They're trying to defend themselves for shitcanning a wonderful and powerful project," he says. "It's just not their kind of project. They have narrow minds about what makes a good project."

After Shmavonian dropped out, Silva found another investor to pony up $10 million and was granted a December 31 deadline to find a bank to lend him the remaining $16 million. Once again, the deadline came and went, but the Redevelopment Agency gave him one more month to find a bank. On January 31, a triumphant Silva returned with a letter of credit. To everyone's relief, the project seemed ready to proceed. "It was a jubilant day for everyone involved," Satre says.

Two weeks later, another bomb dropped. This time Silva's backup investor, whose name remains confidential, got cold feet and pulled out of the deal. Once again, the city gave Silva more time. Now, he had what Satre calls a "drop-dead date" of May 7 to find new investors. But once again, the city found Silva's assets inadequate. "They had a circular logic in their guarantee," Satre says. "It was like being self-insured but having only ten dollars in the bank. You can't drive a car that way."

Of course, the city once again gave Silva more time. And on May 17, he pulled off a miracle. The San Francisco-based development group Simeon Commercial Properties, which boasts an impressive portfolio of high-profile real-estate assets, agreed to bankroll every dime of Silva's $26.5 million commitment. At last, the project seems ready to move forward. But by now, the city of Richmond has spent $18 million renovating the assembly plant to Silva's specifications. Meanwhile, it's taken him seventeen months to produce the financing he promised when he signed a contract with Richmond -- seventeen months in which the city spent millions in public funds and gave him every possible chance to clean up his mess. That he pulled it off at the eleventh hour is not exactly the most ringing endorsement in history. At last week's Redevelopment Agency meeting, city officials reportedly warned Silva and Simeon representatives that they wouldn't tolerate any more of these Keystone Kops antics.

Still, everyone in Richmond wants this project to work. It's a quantum leap above the usual crop of bland office parks and big-box stores, and while it won't generate much revenue for the city, the sheer dynamism of Silva's concept bespeaks a bold foray into the world of the arts that most cities are too timid to even contemplate. But development projects always carry risk, especially in blighted urban centers where so many things can go wrong. If Assembly Plant Partners succeed in putting Richmond on the map, everyone will applaud the foresight of its city fathers. But if the project fails -- and it's already come perilously close to disaster -- everyone will marvel at how Richmond could have been so stupid. This is the dilemma that confronts all American industrial ghost towns that struggle to remake themselves in a globalized world that stripped them of their blue-collar pride.

A veteran Oakland politico once told me that when it comes to developers, Oakland is the ugly girl at the prom. She'll dance with any slick hustler who asks, and never mind the liquor on his breath or the rubber in his pocket. If Oakland has to go begging for a date, little Richmond is even lonelier. Only time will tell Richmond what kind of suitor Ethan Silva turns out to be.

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