CCDC, Santa Fe Settle Dispute Over Marina Housing

Santa Fe Pacific Realty Corp., one of downtown San Diego’s largest landowners, and the Centre City Development Corp., the government agency responsible for guiding construction downtown, put aside their four-month feud Friday and made up.

The truce--accomplished when the giant corporation agreed to seek residential developers for at least two of its blocks of choice waterfront property--had some members of the CCDC board of directors gushing over the compact, embodied in a three-page letter of agreement.

These were some of the same CCDC directors who four months ago verbally blistered Santa Fe for attempting to abrogate a previous city development plan. The company was accused of, among other things, using its considerable political clout with the City Council to “end-run” CCDC.

“Santa Fe has a responsibility to their shareholders to make a profit,” said Peter Q. Davis, who had been among the most critical of the CCDC directors. “I think it (the agreement) is a major step forward.”

The dispute arose when Santa Fe announced plans to pursue construction of a $37-million, 335-room Embassy Suites Hotel on part of its waterfront property across from the current police headquarters, in the city’s Marina Redevelopment area.

However, the city’s blueprint for the property called for housing. CCDC sought assurances that, if the hotel was approved, Santa Fe would abide by the city’s plans for housing on at least two adjacent blocks owned by Santa Fe.

Santa Fe replied that it wasn’t in the business of building houses. And the acrimony began. Compounding the argument was a 1983 development agreement between Santa Fe and the city regulating the company’s ambitious, 25-year, $1-billion waterfront building plan.

The agreement, CCDC said, committed Santa Fe to build 600 housing units in the area of the proposed hotel. But Santa Fe officials, including Ed Levine, the company’s San Diego project manager, and Paul Peterson, a San Diego lawyer representing Santa Fe, said the firm merely agreed to study the feasibility of constructing housing.

In March, the City Council approved the hotel proposal--but only after specifying that Santa Fe had to agree to provide housing on some of its property before it could build more hotels and commercial developments. Last week, when the City Council reviewed construction drawings for the hotel, council members William Jones and Gloria McColl asked that a letter be signed “establishing Santa Fe’s commitment to residential development in the Marina Redevelopment project.”

Such a letter, signed by James O’Gara, a Santa Fe vice president, and Gerald Trimble, CCDC’s executive vice president, was presented to the CCDC board Friday. While Santa Fe continues to abide by its earlier statement that it will not build housing itself, “Santa Fe acknowledges the importance that private enterprise be encouraged to develop property in the Marina area for residential use. Therefore, Santa Fe agrees to make the property available to others for residential use.”

In addition to Santa Fe’s recognition that the city’s plans for the Marina area envision predominantly housing, the company said it “has no expectation” that it will seek to change the zoning on its two blocks to allow anything other than residential.

Santa Fe is also negotiating with the San Diego Unified Port District for ownership of an adjacent block, which also is designated for housing. In return, the Port District would receive some of Santa Fe’s railroad right-of-way.

“I think we got a pretty good bargain,” Davis said. “It’s simple math. They wanted four blocks (used for commercial development). We got three and they got one.”

In other action, the board approved a $34,600 increase in the contract with Hydrotech Consultants Inc., which is checking two city blocks just south of Horton Plaza for possible toxic waste contamination.

One of the businesses located across from Horton Plaza is Super Plating Works, at 106 W. Martin Luther King Way. It’s believed--although a formal report has yet to be issued--that the company may have been dumping potentially toxic wastes there for years.

Hydrotech Consultants has been hired to drill test holes and report on a block bounded by 1st Avenue, Market, Front and G streets, which includes the Super Plating Works business.

An adjacent block--where the Marina Palms apartment project is under construction--has been found free of any toxic contamination, according to CCDC officials.