San Diego gets rolling on plan to revitalize downtown core

San Diego is in the early stages of a public-private project similar in scope to a groundbreaking city center project up the California coast in Long Beach.

Long Beach .

“It was a no-win situation for the city,” Goldstone said. “If the city had lost the suit against the developer, it would have been status quo, and the city would have needed to resume paying the lease, and the city would have incurred legal fees for nothing. If we won the lawsuit, we would have been able to invalidate the leases and get our money back, but it would have resulted in vacating a building that housed 1,100 employees.”

The City Council in April agreed to put that building and the other properties on the market.

The city is selling the currently vacant 101 Ash, because it doesn’t need it. If it builds a new city administrative building as part of the Civic Center project all of the employees could be contained in one building.

“It’s cleaner to have everyone in one building,” Goldstone said.

A potential use for the 101 Ash Street building could be to convert it into apartments, he said.

The so-called Civic Center project is a six-block redevelopment in downtown San Diego that includes City Hall, city office buildings, a fire station, a civic theater and a parking structure.

“The City Council has approved the concept,” Goldstone said. “Now, we are going through the notice of availability under the state’s Surplus Land Act.”

At the outset of any redevelopment project, San Diego, like other California cities, has to be mindful of what is permitted under the Surplus Land Act. A law signed by Gov. Gavin Newsom in 2019 requires cities redeveloping land to include affordable housing in any project and give affordable housing developers first right of refusal.

Gloria, who has championed the project known as the Civic Center Revitalization, could not be reached for comment regarding the project.

The surplus blocks will include four blocks bounded by A Street and C Street to the north and south, and First Avenue and Third Avenue to the east and west, currently occupied by City Hall, known as the City Administration Building at 202 C Street, the Civic Center Plaza office tower, Golden Hall, a public plaza and the 3,000-seat Civic Theatre. The fifth block is occupied by the vacant office tower at 101 Ash St.

Bidders will be encouraged, but not required, to preserve the Civic Theater, which needs an estimated $150 million renovation, according to city documents.

The city is going through the Surplus Land Act process not just to comply with state law, but because “it’s a high priority of the mayor and City Council to build more affordable housing,” Goldstone said.

The City Council approved in April the bid solicitation process for the sale or lease of the property under the Surplus Land Act. The resolution allocated $2 million to pay for consultants to conduct due diligence and evaluate bids for the city-owned land.

The act requires the city to distribute a notice of availability to affordable housing builders registered within the state who then have 60 days to respond.

The city is required to engage in a 90-day negotiation period with the respondents and give first priority to the bidder proposing the highest number of affordable housing units for families making 80% or less of the area median income.

The city has never done a P3 in the “purest sense of the word,” Goldstone said. “They may have entered into agreements with developers, but nothing like this, a public works project, where the city owns the asset at the end.”