Redevelopment Looks at All of Downtown

The rebuilding of downtown San Diego is on the verge of entering a new phase.

Bolstered by a multibillion-dollar construction boom in the four separate redevelopment zones--the most well-known of which is Horton Plaza--the City Council and its semi-autonomous redevelopment agency, Centre City Development Corp., now want to make all of downtown one big redevelopment area.

The idea is to more than quadruple CCDC’s domain from about 325 acres to 1,485 acres, a territory encompassing everything west and south of Interstate 5, from Laurel Street near the airport on the north to the fringes of Barrio Logan on the south.

Proponents say the expansion will allow the city to help jump-start the renewal and revitalization of additional inner-city neighborhoods that, without concentrated help, might take decades to rebuild.

They point to the special powers that state law gives redevelopment agencies, such as the authority to eliminate dilapidated property through condemnation and the ability to raise new tax money generated from increased property values for purposes ranging from providing more low- and moderate-income housing to paying for basic needs such as sewers and sidewalks.

Since the mid-1970s, when the city embraced redevelopment, but especially during the 1980s, assessed property values in downtown redevelopment areas have increased by $1.2 billion. Looked at another way, the public subsidy of $150 million in downtown redevelopment areas has led to $3.9 billion in private investment.

The increase in annual property taxes is expected to reach $14 million this fiscal year, money that goes directly to the redevelopment agency to keep paying for redevelopment district improvements, be they subsidies to housing developers or the cost of planting trees.

It’s those kinds of numbers combined with CCDC’s track record as a small, focused, can-do agency and the reality that downtown needs special help that have transformed skeptics like Peter Davis, a banker and former CCDC board chairman, and Brian Walsh, a partner in a downtown real estate company.

“If you called me two or three years ago, I would have said no, I’m not for it,� said Walsh, a partner in Walsh & Chacon and a former Gaslamp Quarter Council official. But two things have changed, he said.

First, Walsh said, CCDC has matured. By being attentive and cooperative with small property owners, even while negotiating high-profile multimillion-dollar deals with out-of-town corporate developers of large projects, “they’ve shown they aren’t out to squash the little guy.�

Second, he said, it’s clear to him that without expanding redevelopment into new neighborhoods, including Harbor View, Cortez Hill and especially Centre City East, there will be little allure for private developers to venture into blighted areas alone.

CCDC has one mission, Walsh said, and that’s to invigorate downtown.

“They are the group with some incentive to get something done,� Walsh said. “Without help, I see Centre City East stagnating,� he said of the area where services for the homeless and street people are concentrated. “My real fear . . . is that you will have a 25-year slum.�

Davis, chief operating officer of the Bank of Commerce, served on the CCDC board for 10 years, retiring four years ago. A strong proponent of private enterprise and the supply-and-demand view of the marketplace, he initially opposed the proposed expansion.

In his view, redevelopment and CCDC were created for a specific purpose, to goose the market in a confined 325 acres. Once things were rolling, the time would come to stop and dissolve the bureaucracy.

“I felt at the time that we would use (redevelopment tax money) to improve the area and then the other areas outside (redevelopment districts) would kick in and move on their own,� Davis said. “But as I step back, I see that, even with all the activity that’s taken place, it’s still not enough of a catalyst. Cortez Hill and other areas just haven’t been able to do it on their own.

“I guess I’ve become a believer . . . we have a successful solution, we ought to use it.�

In the same vein, Councilman Bob Filner, whose district encompasses most of downtown, says he too is now convinced that downtown revitalization should be controlled by one agency.

“If left to the general city bureaucracy, it just won’t happen,� Filner said. “It’s the only way as I see it that we’re going to get residential development in a reasonable time and the kind of overall planning necessary to make it all fit.�

While the momentum supporting expansion is great and there is a consensus at City Hall for it--propelled by the tentatively approved Centre City Community Plan drafted under the leadership of shopping center developer Ernest Hahn--other government agencies want their fair share of future increased property taxes.

Because of the way redevelopment works, any difference between the existing property tax base and the increase caused by redevelopment improvements goes to the redevelopment agency. In most cases, the redevelopment agency keeps the money for more than 30 years to pay off bonds.

In doing so, however, other government agencies, such as the county and school districts, are deprived of sharing in the new revenue. In the past, those agencies didn’t complain or object when the city formed redevelopment districts.

But today, with their budgets stretched thin and few new sources of tax money on the horizon, these agencies see a gold mine in a large downtown redevelopment area generating millions of dollars annually. They want in.

“The county historically did nothing to protect its (interest in increased redevelopment tax revenue). In the past, we rolled over,� said Rich Robinson, director of the county’s Office of Special Projects. “The perception now is that things are clearly out of balance.�

The San Diego Unified School District, whose downtown attendance area includes several schools, approved a resolution last year making sure that its needs are met any time the city creates or expands redevelopment areas.

“We want to be players,� said Tina Dyer, the district’s chief lawyer.

CCDC is well aware of the concerns and the need to strike a compromise.

In part, it already has. Specifically excluded from the expanded downtown redevelopment area are Horton Plaza and the so-called B Street corridor from City Hall to 8th Avenue, a section lined with high-rise office buildings.

Paul G. Desrochers, a top CCDC official, said the two areas generate high property taxes and it would be unfair to deprive agencies such as the county from receiving the additional tax revenue.

“We’re trying to be responsible about it,� he said. Desrochers said the city and county have worked closely on various downtown issues, including the need for more courthouse space. CCDC, for example, has provided the county with $3 million to build temporary courtrooms. The city and the county have talked informally about the redevelopment expansion.

In conjunction with a larger redevelopment area, the county could be provided with more money for courtroom and jail construction or revenue to help build and operate facilities and programs to meet social service needs in Centre City East, Desrochers said, emphasizing that everything is still in the idea stage.

“We can and we want to work together to respond and resolve some the fiscal impacts that may occur� through making downtown one big redevelopment district, he said.

Even though the agency’s domain would increase more than fourfold, its staff will remain at about 26, officials said.

The county, Robinson said, might want to consider what redevelopment can do to help pay for court expansion downtown as well as for urban open space and a new office building next to the County Administration Center on Harbor Drive, a project the county has not been able to finance.

The city has yet to speak with the school district.

Those negotiations, however, are still several months away because CCDC must prepare time-consuming environmental and fiscal impact reports on the expansion.

By CCDC’s schedule, the next big step is the election of a special 25-member redevelopment committee made up of residents, business and property owners, and members of various charitable, cultural and civic groups. The committee is required by state law and must represent the various neighborhoods proposed to be placed under the domain of redevelopment.

The volunteer advisory committee will help in the creation of the Centre City Redevelopment Plan, which will encompass the detailed goals and objectives of the expanded downtown redevelopment district, as well as the land-use guidelines contained in the Centre City Community Plan.

The election is set for 1 p.m. Oct. 20 at Plaza Hall inside Golden Hall. Those interested in running for election or voting should contact the Downtown Information Center, 255 G St.

Centre City Project Area Source: Centre City Development Corp.