Battle to Build Downtown Project Won by Developer

A plan to develop a prime slice of downtown real estate swept past the San Diego City Council Tuesday--three months after the same council vowed to condemn the land rather than see the project built.

The council unanimously approved developer Terry Nash’s proposal for a six-story office building and restaurant on a 10,000-square-foot parcel at Front and F streets between Horton Plaza and the Meridian condominium tower.

Several members said they had changed their position after learning more about Nash’s plans, and after realizing that there was little support for spending public money to block a private development.

“I’m grateful that the council and those members that reversed themselves had the courage to do that,” Nash said after the vote. “It’s not often you see that in elected officials.”

To some, Nash had become a contemporary David taking on San Diego’s real-estate Goliaths.

A developer whose only downtown work was the redevelopment of the old Senator Hotel, Nash had the support of the city’s planning commission and Center City Development Corp. (CCDC). He said he intended to use only private money.

But his project was opposed by Ernest W. Hahn, the developer of the $140-million Horton Plaza, and Walt Smyk, the developer of the $71-million Meridian. They suggested Nash’s project was too small and inappropriate for the site, described by developers as the premier block remaining downtown.

Last spring, the City Council, acting as the city’s redevelopment agency, voted 5-2 against Nash’s plan. It voted tentatively to condemn the property and buy it for $1 million. But before a final vote, members began changing their positions.

On Tuesday, six members were present for the unanimous vote. Those who were absent, Mike Gotch and Ed Struiksma, had indicated they supported Nash.

Gloria McColl, who changed her position, said afterward she had not fully understood Nash’s plan until recently. A spokesman for Uvaldo Martinez said Martinez preferred to spend public money to redevelop 4th Avenue rather than use it to condemn Nash’s land.

William Jones said he changed his position after learning that Nash’s plan would not impinge upon the city’s agreements with Hahn. Mayor Roger Hedgecock declined, through a spokesman, to comment on his change of heart.

Nash attributed his success to three things:

First, he said he had raised public awareness and stirred up controversy by setting up barricades and beginning to excavate his property even after the council rejected his plan last spring.

Next, he said, he had met with his opponents on the council. Nash said he was able to introduce himself and persuade them that his firm wanted very much to build the project. He said he wanted to do it with private money and wanted it to be good.

Finally, Nash said, he took legal action against the city in Superior Court late last month. He asked the court to look into the council’s action and order it to approve the project. The city’s deadline for answering the suit was to have been late this week.

Nash has agreed to drop that suit and to take no legal action over the delays so far.

“After three months and $35,000, I’m very gratified,” Nash said, referring to the money he said he spent to bring the council around. “After you fight so hard and so long, there’s got to be a big letdown. Now I have to go back to real estate development.”

While approving Nash’s plan, the council voted for a year’s freeze on considering any other proposals to develop the rest of the block. Only Smyk, who owns part of it, and Hahn, developing the adjoining property, may propose projects.

Gerald M. Trimble, CCDC’s executive vice president, said the purpose of the year’s freeze is to “buy ourselves a little hindsight.” That is, it will enable the city to measure the success of Horton Plaza and to decide whether it could attract a department store to the site.

Trimble said that site is the last remaining downtown block for a department store. A department store on that site would be the fifth in the redeveloped downtown.

Nash said he disagreed with the freeze.

“I don’t know why they have to pass a resolution. Maybe it was a way to make somebody else happy,” he said. “I kind of think we ought to get on with developing the rest of that block.”