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San Diego pays $7 million for former indoor skydiving center to be repurposed for homeless services

Two massive wind tunnels dominate the room.

Fifteen feet across and encased in thick glass tubes, they sink well below ground and rise through the first, second and third floors of the city San Diego's newest real estate purchase — a former indoor skydiving facility.

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There's an industrial kitchen in the southwest corner of the main level, with a wide lunch counter and chairs, cafe tables and floor-to-ceiling window views across 14th Street toward Petco Park.

Piles of T-shirts with the Airborne San Diego logo are neatly folded in cubicles just past the reception area. Helmets and jumpsuits hang in closets a few steps away, where thrill-seeking customers used to sign up for flight instruction in one of the nearby classrooms.

The city bought the once-showcase entertainment destination out of foreclosure in February for $7 million in cash, without an independent appraisal. Escrow closed in just over a week.

Critics of the project say the property is worth millions less than what the city paid, but city officials say the purchase was well under market value.

Either way, the three-story downtown building will be re-outfitted for a different use: a "housing navigation center" to help shepherd people with nowhere to live into a place of their own.

"That's the main purpose of this facility, to provide a space to connect homeless people with supportive services," said Jonathan Herrera, the senior advisor to Mayor Kevin Faulconer on issues regarding homelessness. "There's adequate space on every level."

The 26,000-square-foot skydiving center was built on two vacant lots at 14th Street and Imperial Avenue under the vision and direction of Alan "Buzz" Fink, a longtime San Diego businessman with an affinity for flying.

His venture failed last year amid design problems, cost overruns and lawsuits. In September, Fink lost the property to his lender, San Diego financier David Malcolm.

The next day, title was transferred to 1401 Imperial Holding Co. LLC, an entity owned by the John M. Tworoger trust. Malcolm and the Tworoger family have done business together in San Diego and Texas dating back years.

The City Council approved the purchase in January after Real Estate Assets Department Director Cybele Thompson and Deputy Chief Operating Officer Ronald Villa told council members the property had been appraised at between $15 million and $22 million.

The San Diego Union-Tribune reported in February that the appraisal the city relied on was done for a prior owner in 2016 -- when the Chargers were still eyeing a stadium in East Village. Also, more than $11 million of that value was for furniture, fixtures and equipment related to the skydiving business.

The city said most of the furniture and other leftovers inside the skydiving center will be re-purposed, either for use by the incoming operator or somewhere else across city facilities.

At the time of sale, the Imperial Avenue property was assessed by the county for tax purposes at $5.8 million. It was reassessed at $7 million last month.

Downtown businessman and homeless advocate George Mullen criticized San Diego officials for their handling of the sale. He said they should have taken more time to discuss the project more broadly across the community.

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"Astonishingly, the city did this purchase in the shadows, without an appraisal, and never discussed the idea with top civic leaders working on the homeless issue," he said. "Why? Something is rotten here."

Mullen is not the only one concerned about the investment.

Real estate broker Sam Patella, who specializes in commercial properties in East Village, said the city paid too much for the failed skydiving center.

"I'm going to say it's worth $325 a square foot, the dirt on that lot, or $3.25 million – possibly less with demolition costs," he said. "The building basically is not worth anything. I really don't see a useful life for it in its present shape and configuration."

City officials stand by the sale price, saying their experts recommended the sale even without an updated appraisal. They point to a letter to the editor in the Union-Tribune by real estate investor Casey Brown, calling it "a great deal for the city." Brown did not respond to a request for comment.

"We don't anticipate major tenant improvements," Faulconer spokesman Greg Block said. "It used to be a skydiving center. It's now a building with a lot of space that can be used to help guide people into permanent and supportive housing."

McDonald writes for the San Diego Union-Tribune

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