Thriving Hub May Be City’s True Mother Lode

When someone mentions the new San Diego, the image is of downtown. And with some justification. Its reawakening after a decades-long stupor has been extensively chronicled in picture and word, and it indeed seems on course to becoming one of urban America’s success stories.

But 15 miles north of the center city, off Interstate 5 and just inland from La Jolla, on land once covered with scrub brush, range grasses, jack rabbits and coyotes, a quiet but equally dramatic transformation is occurring on a scale that will rival, if not surpass, what’s happening downtown.

It is there, as much as downtown, where the city’s future lies, with high-rise office complexes, major hotels, extensive scientific research and development facilities, and thousands of expensive apartments, town houses and condominiums taking root on what was vacant property as little as three years ago.

Given the hundreds of millions of dollars invested there and the heightening allure this area seems to hold, it’s perhaps not surprising that it has taken the auspicious title Golden Triangle, a modern-day Mother Lode where land can cost more than $1 million an acre and development sprawls ahead with few constraints.

“Word is out: This is the place to be. That’s why we’re here,” said Ted Owen, vice president of the Greater San Diego Chamber of Commerce and director of the chamber’s recently opened Golden Triangle office. The evolution of the triangle into its own major, thriving business center is what spurred the chamber to divide its territory and locate a branch office there.

And although the triangle has provided developers with fertile ground, its phenomenal growth hasn’t been confined to bricks and mortar. The area is also the womb for those involved on the cutting edge of experimental medicine and science, embodied in institutions that, to a large degree, primed today’s building boom and that give the area a unique vibrancy.

Geographically, the triangle is just that--several thousand acres bounded by three freeways. At the bottom is California 52, as it runs through San Clemente Canyon. Stretching up the sides for 5 1/2 miles are Interstates 5 and 805, which then meet at Sorrento Valley to form the top.

But the real dimensions of the building boom reach north and east to Sorrento Valley and Sorrento Mesa, where huge industrial parks have been built or are taking shape along Mira Mesa Boulevard and Carroll Canyon Road. To the west, research and development facilities abound in the area off North Torrey Pines Road.

“From a development standpoint, it really is one big area connected by the freeways and the kind of companies going in there,” says Mike Philbin, a senior marketing consultant for Grubb and Ellis Commercial Brokerage who describes building activity in the area as nothing short of remarkable.

One technical but revealing yardstick used by developers and real estate companies to measure growth is square footage. And, for San Diego, the numbers in the triangle are impressive.

Counting both completed buildings and those under construction, there is about 12 million square feet of office and scientific research space in the greater Golden Triangle area. A second wave of high-rise buildings, hotels and industrial parks, with several millions more in square feet, is either planned or due to be started over the next several years. In contrast, there is about 7 million square feet of office space in all of downtown.

Within the freeway-bounded area of the Golden Triangle, the budding forest of shiny new office buildings is soon to get much thicker. By 1990, there will be 7 1/2 million square feet of such structures, ranging in height to 18 stories, compared to the 2 1/2 million square feet existing there now or under construction. That’s a tripling in just four years.

“In the last year, you have seen a lot come out of the ground . . . there’s just a tremendous amount of activity,” said Dan Pegg, president of the San Diego Economic Development Corp., who foresees more rapid growth for at least the next decade. “What’s happened up there is a market phenomenon . . . it doesn’t take a lot of information for developers to sniff out opportunities.”

Dry statistics about square footage, however, tell only part of the story. While boosters praise the triangle as testament to San Diego’s good fortune and pro-business environment, others, particularly those who live in the area, feel overwhelmed by the surge in development.

They’re asking questions about whether the cost of such prosperity is the degradation of their quality of life, as the routine of going to the grocery store or shopping becomes a long journey on traffic-clogged streets.

The pessimists in this group say it is already too late, that except for minor planning victories now and then, the war on sprawl has already been lost. To them, the Golden Triangle is an immovable object governed by the laws of money, demand, profit and politics.

Still others wonder if both the Golden Triangle and downtown can coexist equally, without the triangle sapping downtown’s new-found strength.

The triangle’s defenders, however, say it is simplistic to believe the region can maintain its former rural character while at the same time undergoing intense growth--growth that brings with it jobs, a stronger tax base and, it is argued, the intangible of prestige.

“This type of conflict is most pronounced in the Sunbelt,” explained James Cloar, executive vice president of the Urban Land Institute, a nonprofit research and education group based in Washington that studies questions of land-use and development. “We’ve traditionally thought of protest (about growth) in areas closer in to the cities. But more and more, we find much greater conflict is now occurring in suburban areas.”

As for downtown, most supporters of the triangle claim that while competition between the two will exist, it won’t be of the magnitude that makes one site’s success dependent on the other’s demise. Each location, they say, has its special strengths and attractions, and government employment forecasts point to increased jobs in both areas into the next century.

Others, however, are more blunt. Jack Naiman, president of the Naiman Co., a national conglomerate involved in land development, health clubs and real estate, and owner of the Naiman Technology Center in the Golden Triangle, predicts boldly that “the tail will one day wag the dog.” His belief is that the triangle is so strong that it is already the “financial power center of San Diego, period.”

Bravado and debate aside, the Golden Triangle is charging ahead. As a job center, mainly for high-paying administrative, management, corporate, medical and scientific research workers, it’s estimated that more than 50,000 people are either now employed there or will be shortly as new offices open. That compares to downtown employment that was about 60,000 in 1980.

The work force now settling into the triangle has created its own demand for accountants and attorneys, restaurants and neighborhood convenience stores, as business in the triangle has in turn created more business.

“There’s a huge economic engine at work there. Economically, it’s a separate entity now,” said R.H. Hamstra, a management psychologist who served on one of the area’s earliest community planning groups in the late 1960s and early 1970s. The group helped draft the development blueprint for what has evolved into the Golden Triangle.

The fuel for that engine, say planners, developers and community residents, is the UC San Diego, the 25-year-old institution located in an idyllic setting of eucalyptus groves and chaparral smack in the middle of all the activity.

Begun as a small school of science and engineering, the university is now San Diego’s third-largest employer and one of America’s top research universities. Its impact on the Golden Triangle has been nothing short of immense. It has attracted and spawned the high-technology and biotechnology companies--both large multinational corporations and small “incubator” start-ups--that are the triangle’s backbone.

“There’s no doubt that our presence has attracted firms to the area and that some other companies have been established here by ex-faculty members involved in computer science and engineering,” says Patricia Collum, a campus-community planner for the university. “If we weren’t here,” the triangle’s rapid development “wouldn’t be occurring at the level it is now.”

Collum is quick to note, however, that although high-tech and bio-tech companies have a symbiotic relationship with the university, more and more new businesses moving into the area have no direct links to the university. “As this area matures, we see more of what is just general office space, with no real connection between what’s there and the university,” she said.

Back in 1958, when the Board of Regents of the University of California decided to build a campus in San Diego, one of its main concerns was the future of the thousands of acres surrounding the new university. The regents wanted to avoid a repetition of what happened at UCLA, where encroaching urbanization gradually encircled and hemmed in the campus.

Later, in the late 1960s and early 1970s, the regents presented an additional concern. Faced with growing student activism at its other campuses that often spilled over into adjacent neighborhoods, they directed UCSD to become more involved in community land planning in an effort to head off potential incidents in San Diego.

The idea in San Diego was to create a master plan ensuring organized growth. A community group was formed and given the responsibility to forge the new plan.

Until that time, the vision for the area was of another Clairemont, the suburban development directly to the south of the triangle, characterized by acre after acre of single-family homes, neighborhood shopping centers and strip zoning.

In 1961, one year after the university opened, the new master plan was completed. It called for the creation of a so-called “urban node,” a planner’s term for what is essentially a mini-city, with high densities for residential, mass transit corridors and job centers located near housing.

On paper, it was quite a transformation. In practice, say critics of the plan and its revisions, there was too much emphasis on growth and not enough regard for the people who would live and drive in this new mini-city.

Defenders of the early plan say higher housing densities are not only the best way to use expensive land but are essential to support a future light-rail mass transit system--which is planned but unfunded--thus making the area less dependent on cars.

For most of the 1960s and early 1970s, not much happened, at least in comparison to today’s hectic development pace. The university was gradually growing, as were portions of Sorrento Valley, where the first wave of bio-tech companies were locating. Some of these new firms were spin-offs from the university, while others were spawned by General Atomics (today known as GA Technologies), an advanced-science research facility located across Genesee Avenue from the university.

“None of the developers realized what this was all about . . . they had visions that this was an extension of Clairemont,” Hamstra said. “They didn’t understand the university at all, the economic power it held for the area. They were thinking in terms of it being some little college up there in the eucalyptus trees.”

But it didn’t take long for developers to catch on.

Much of the land in the Golden Triangle was then owned by two entities. One was Penasquitos Inc., owned by the late Irving Kahn. The other was the City of San Diego, which controlled thousands of acres of pueblo lands once belonging to the King of Spain. The city took title to the pueblo lands in 1874.

Both began selling their property, Penasquitos for profit, the city, in part, to pay for the maintenance of its police substations scattered throughout town.

By the mid-1970s, large, well-known developers began buying property. These included people and companies such as Ernest Hahn, the shopping center magnate; Harry L. Summers, the developer of Rancho Bernardo; Genstar Southwest Development, part of a multinational corporation, and Bren Investment Co., to name a few.

The first major project, and certainly one of the most controversial at the time, was Hahn’s University Towne Centre shopping mall, opened in 1977. Set in the heart of the Golden Triangle on La Jolla Village Drive, UTC is 1 million square feet of stores and community-use buildings, the area’s cultural centerpiece.

“It was really the beginnings of what has occurred out there. It set the tone,” according to John Fowler, San Diego deputy city manager, who has lived in the area for 25 years.

UTC, spread over 68 acres, was more than a retail shopping center. It was one of the first centers anywhere to offer a large mixture of uses, from a museum and ice rink to community meeting rooms and a day-care facility, plus high-density housing. Not only was its function a source of contention, but its location and size were worrisome to people who felt that it would prompt sprawl and hurt commercial businesses in nearby La Jolla.

As the triangle’s shopping/cultural center, UTC joined the university as one of two anchors for the area, which was now also experiencing high-tech growth in Sorrento Valley and feeling the impact of expanding institutions such as the Scripps Clinic and Research Foundation, which opened the first of its new facilities in 1976, and the Salk Institute, opened in 1960.

While a few, relatively modest office developments followed, the economic downturn of the late 1970s and early 1980s, accompanied by high interest rates, hampered large-scale construction. But with economic recovery came a release of pent-up development, the ramifications of which are clearly evident today in the Golden Triangle.

“It’s the old saying--activity breeds activity . . . it’s become the place to be,” said Gordon Dunfee, division vice president for John D. Lusk & Son development company. Dunfee’s firm, which is developing 720 acres into business and industrial parks east of I-805, alongside Mira Mesa Boulevard, is basing its success on “incubator” companies.

This is the description given new companies that are predominantly involved in biomedical, high-tech and other applied-science endeavors. They start out small, often as offshoots from the university or other companies, but expand rapidly.

“The growth is in quantum leaps, from needs of 1,000 square feet, to 5,000 to 15,000 in a year or so,” Dunfee said.

One such firm is Integrated Software Systems Corp. Founded by three UCSD students in 1970, the company had its origins in the students’ homes. Its first office was in a small building in Sorrento Valley. Today, the company employs 300 people at its 60,000-square-foot headquarters building in Sorrento Valley and conducts business worldwide.

“There are so many different types of high-tech companies out here that you can’t keep track of them all,” says Mark Forster, spokesman for Integrated Software. “We were founded in San Diego, and we’re a San Diego-based company that intends to stay that way.”

Major companies with household names have also begun to call the Golden Triangle home. TRW, Johnson & Johnson, Eastman Kodak, NCR and E.F. Hutton have opened offices there. Early next year, IBM will follow, when it closes its Mission Valley office and moves 400 employees into University Center, a new complex just east of I-5 next to La Jolla Village Drive.

IBM officials say their move of administrative, sales and service personnel is spurred by the need for more space, and the Golden Triangle provides that. “It really is strictly a business decision on our part,” IBM spokeswoman Margot Desannoy said from the company’s Los Angeles office. “We need a growing area that gives us flexibility, and this addresses our needs.”

Another aspect to life in the Golden Triangle is image. More so than anywhere else in San Diego, major developers and companies there are attempting to create an image through architecture. From Regents Park, where office buildings are covered by a mirrored cylindrical skin, to Equidon Research Park, with its waterfalls and lush, jungle-like courtyard, the accent is on making a statement, a sign of success to go along with the BMWs and Mercedes-Benzes in the parking lots.

The striking architecture, however, seems the domain of large, stable companies and developers who can afford it. Much of the rest is dominated by the dreary two- to three-story tilt-up, bunker-style design that turns buildings into glorified warehouses of the kind prevalent in places like Silicon Valley.

The combination of the triangle’s wealth, promising future and the comments of boosters has some people worried the new San Diego won’t be downtown, where more than $100 million in public subsidies has been pumped into its revival. Some developers believe it’s only a matter of time before the Golden Triangle eclipses downtown, but others are more delicate, saying there is plenty of room in San Diego for both a successful downtown and the booming triangle.

“San Diego is not a city that’s going to have just one central hub for all its concentrated activity,” said former Mayor Roger Hedgecock, who spearheaded downtown development. “We will have a revitalized center city and other important centers, in effect other downtowns, in Mission Valley and the Golden Triangle.”

Already, some downtown businesses have moved to the triangle, either in whole or in part. One of those is the insurance firm of Barney and Barney, a downtown business for 76 years, the last decade at 5th Avenue and Ash Street.

On Monday, the company is moving its 100 employees and 14 partners to a new triangle office called La Jolla Gateway II.

“I’d be reluctant to put it (the move) on the basis of one over the other,” said Larry Shea, Barney and Barney’s managing partner. “The move gives us the opportunity to have all our people on one floor.”

Shea said his firm probably could have found a building downtown to suit its needs, but not one to accommodate its future growth while also providing ample parking: “Out there you get four spaces per 1,000 square feet. Downtown it’s one per 1,000 square feet.”

With the cost of renting office space nearly equal between the two locations, it’s things like parking that can sway the balance to the triangle, businessmen say.

The theory expounded by businessmen, city planners, politicians and developers is that downtown will remain vital and thriving as a center for tourism, waterfront activities, cultural amenities, banking and businesses that revolve around City Hall, the courthouses and banks.

Others, such as Gerald Trimble, executive vice president of the Centre City Development Corp., the agency in charge of downtown redevelopment, say the fight is for real.

“We’re in head-to-head competition with all parts of San Diego,” he says. “We have to compete. It’s a matter of providing an environment that’s interesting, attractive and has a mixture of uses.

“We have a walking environment in downtown, with multiple uses and mixed uses that just aren’t in the Golden Triangle.”

Sometimes overlooked in the debate about competition between the two locations is that all the indicators show that both areas will burgeon at least for the next decade, underscoring San Diego’s overall economic health.

“San Diego has its own economic base now,” says Harry L. Summers, one of the triangle’s most prominent developers. “Before, when San Diego (county) only had a million people, it couldn’t do it. We looked to L.A. and Orange County. But now San Diego has finally reached the 2-million level, and it’s made all the difference. We’re our own metropolitan area now, and the Golden Triangle is a reflection of that.”