City Bond Issue Urged for Balboa Theater Conversion

The Centre City Development Corp. has recommended that the City Council issue $4.5 million in bonds to fund the conversion of the downtown Balboa Theater into a contemporary art museum.

CCDC Executive Vice President Gerald Trimble recommended in a memorandum dated Aug. 12 that the industrial development bonds be used to “enhance the financial viability of the project,” which would convert the historic building to a combination retail complex and downtown art mecca to be known as the San Diego Art Center.

A group of citizens known as Save Our Balboa has fought the conversion on the grounds that there are equally viable sites that do not require the destruction of a useful theater.

Previously, Trimble had reported to the City Council that the Art Center backers were confident of obtaining private funding for the project, estimated to cost $5 million.

Questioned Monday about the move to acquire public rather than private financing, Trimble spoke quickly to dispel thoughts that the financial position of the Art Center group was in any doubt.

“It (a bond issue) is to (CCDC’s) best interest,” he said. “We like to use it as much as we can. It reduces cost. There’s no public cost to the city or the agency,” he said of the tax-exempt bonds, which are sold at a lower interest rate than private bank financing. The bonds would be paid off by lease payments to the city from the developer.

Kenneth Winslow, a partner in Art Center Redevelopment Ltd., said that the chief benefit of the bond financing was a lower interest rate. “I haven’t figured it out exactly,” he said, “but it would be about $100,000 a year in savings.”