Otay Mesa and San Ysidro: New Hopes, Old Neglect : Huge Tract Poised for Long-Term Building Boom

San Diego’s Otay Mesa is no stranger to hype. But the $130,000 show put on earlier this month in an open field by developer Roque de la Fuente III was like nothing this dusty mesa has ever seen.

There was a 12,000-square-foot red and white tent. Beneath it was enough lobster, jumbo shrimp, pate, cheese and other food to feed 3,000 people from noon to past 7 p.m. For drink there was hard liquor, Mexican beer, French and domestic wines, and fountains dispensing margaritas. Outside in the bright sunlight, the sky was smudged with special pastel-colored fireworks, heralded by exploding dynamite.

A variety of local and state politicians attended. Assembly Speaker Willie Brown, a Democrat, arrived by helicopter, accompanied by David Malcolm, a young Republican and Chula Vista city councilman who is a Brown appointee to the California Coastal Commission.

The hoopla was for the ground-breaking of De la Fuente’s 312-acre business park. But the event was noteworthy for more than its extravagance.

Although the mesa’s history is littered with dashed hopes and broken promises, there is evidence that this time they may come true, and that the optimism emanating from developers, real estate brokers and government officials will remain long after the circus tents are packed up and gone.

“For a long, long time this place just drifted. The City of San Diego considered everything south of Division Street--the Mason-Dixon Line--a no-man’s land,” said Alex Struthers, who heads his own real estate company with land on the mesa. “Right now is the first time we can say we’re in the land development business. If you had told me in 1967 it would take 20 years to get to where we are, I would have said forget it.”

But now no fewer than nine industrial parks totaling 1,024 acres are in various subdivision stages and waiting for final city approval.

One of the first to break ground is Sanyo Industries America Corp., a subsidiary of the Japanese corporation. The company has started construction on the first of two 350,000-square-foot buildings to accommodate the assembly, storage and distribution of electric fans, small refrigerators and other consumer products.

With the Sanyo project, Otay Mesa has taken its first visible step toward shedding its agricultural past. Already, farming is dead because of the extraordinary costs of water and land.

Within weeks, other developers, such as those behind the 440-acre Otay International Center adjacent to the second border crossing, are expected to join the surge by building new roads to service their projects.

And there is more, including plans for an international raceway and a state-operated 1,300-acre off-road vehicle park, which are wending their way through the bureaucratic process.

Adding to the activity is work on the $146-million Donovan Correctional Facility, a 2,200-bed medium-security state prison scheduled to open its first 500 beds in December.

In most places, a prison wouldn’t be viewed as an amenity. But in a place as huge and unpopulated as the 20,000-acre Otay Mesa, the prison is seen by landowners, developers and government officials as something positive, adding to the momentum and go-go development psychology washing over the area. It also doesn’t hurt that the state is helping build a vitally needed sewer line, without which building on the mesa would be impossible.

“Otay Mesa is the largest industrially zoned contiguous land in the state of California,” said Mike Murphy, president of California Structures, which is building San Diego Business Park, where Sanyo will be located.

“The land is affordable and there is a wealth of available labor,” Murphy said. “The biggest problem we’ve had with Sanyo and others is that they’ve heard Otay Mesa was going to come on line for five years. So they said, ‘Show us the buildings. The real plans.’ But until now, there weren’t any.”

A combination of three essential ingredients has brought the mesa from the realm of fantasy to the threshold of reality:

- The opening last year of the second border crossing with Mexico--around which the first industrial projects will be grouped.

- The building of an 11-mile sewer line connecting the mesa to San Diego’s sewage Metro system.

- Agreement by the city and developers on an approximately $86-million financing plan requiring developers to pay for such mundane but essential things as new and widened roads.

The new border crossing is of paramount importance for two reasons. First, it gives the mesa--which one longtime landowner likened to living inside a horseshoe--another outlet. And second, it provides the link between “twin plants” just across the Mexican border in Tijuana and those slated for construction on the mesa.

An example of that is Sanyo, whose new warehouse will work in tandem with an existing Sanyo plant in Tijuana, where low-paid workers will assemble products and then ship them to the American side for final assembly, storage and distribution.

The problem with sewage was that there were no sewer lines in place and the city couldn’t afford to put them in. This obstacle was overcome when the Otay International Center, a partnership controlled by Canadian Abe Simkim that owns 440 acres next to the border crossing, agreed to spend $7 million to build the line.

The sewer line, with a capacity of 5 million to 7 million gallons a day, is nearly complete. It runs 11 miles from the border, north through the mesa to the Otay River Valley and then west, past Interstate 5, and connects there to the city’s Metro system, which ends at Point Loma. The state is paying $1.4 million for its portion of the line.

“Before we came, there was no one there like OIC that was willing to put the money up,” said Gene Kountz, project manager for OIC. Unlike the big bash by De la Fuente, OIC has worked quietly, first selling property to the federal government three years ago for the border crossing and then paying for the sewer line. The company will be repaid by other developers when they connect into the system.

“Our way is to go about our business quietly,” Kountz said. “I think we’re substantially ahead of everyone else.”

Two large downtown San Diego developers, Trammell Crow Co. and the Koll Co., have expressed interest in the development.

“I think that in the next 10 years, Otay Mesa will become known as an international trade mart . . . we’ll see materials from the western Pacific, technology from the United States and labor from Mexico,” said Kelly Burt, a leasing agent for Trammell Crow who specializes in the South Bay. “Most people in the U.S. think the world ends at the border, when in fact it’s at the center of two very large populations.”

With the completion of the Big Three--the new port of entry, the new sewer line and a development funding agreement, the mesa is now ready to take advantage of its best asset: relatively cheap land that is flat and available in large parcels.

It was the low price of land that first prompted speculation and the hype.

William Rick, owner of an engineering firm that worked on the Otay International Center, said that in the past, there was no substance behind the grand promises.

“The problem was there were no real builders involved,” Rick said. “The mesa was an easy thing for politicians to praise because there was no one to object. People were buying and selling properties. They remembered Kearny Mesa and Miramar, where, if you came in on the ground floor, you made tremendous profits. No one was going to get caught short.”

Carl Roll, a farmer who was born on the mesa 75 years ago, remembers selling property in 1968 for $6,000 an acre. Today, an acre on the mesa can cost as much as $75,000. But even with that appreciation, the price generally is still lower than other parts of the county.

Like his neighbors, Roll--who can recall watching his brothers as they worked in a field with a team of mules pulling scrapers to build the first runway at Brown Field--is ready to sell the remaining 160 acres of his family’s land.

“I’m happy with what’s happening,” he said. “Why not? I don’t mind sitting and watching the tide for awhile.”

Of the 20,000 total acres on the mesa, the city has designated 3,500 of them for industrial development, which primarily will involve warehouse, assembly and light-manufacturing facilities supplying--depending on who’s making the estimate--40,000 to 70,000 blue-collar jobs.

An additional 5,800 acres are set aside for about 18,000 residential units, all west of Brown Field, where major firms such as Pardee Construction Co. and Robinhood Homes Inc. own large parcels.

It’s because of this massive size that city planners talk about a build-out scenario of 30 years or more. When 5,000 acres in the easternmost section of the mesa under county jurisdiction is included, the estimate increases to 50 years.

“There are a lot of acres and a lot of years to develop this. When it all gets done depends on which prophet you want to listen to,” said Fred Morey, the official in the city manager’s office responsible for overseeing the mesa’s development.

Because it will take so long to fully build up the mesa, planners and developers say it will provide them with a cushion against immediate problems such as traffic and lack of future sewage capacity.

One of the several traffic scenarios being analyzed by the San Diego Assn. of Governments estimates that traffic congestion on Otay Mesa may duplicate the 200,000 cars a day found on Interstate 8 in Mission Valley.

“We have a brand new area, and we want to make sure we do have good planning and avoid problems like those in the Golden Triangle and Mission Valley,” said Mike Hix, the Sandag transportation analyst.

One of the main freeways contemplated for the mesa, California Highway 125, which would run from the border north about 11 miles to California 54, is not included on the state’s five-year funding list, according to Jim Larson, a Caltrans spokesman. The cost of the freeway is estimated at $7 million to $9 million a mile.

But the state has signed agreements with the federal government, Larson said, for construction of a five-mile freeway designated as Interstate 905, which would start at Interstate 805 near its intersection with California 117 and angle east to the port of entry.

While Brown Field, a 900-acre commercial and general aviation airport, is viewed as a strong asset, some home builders with property west of it are on hold because of revisions in the airport’s noise zone that might limit residential development.

“Currently our building plans are in abeyance until this thing is resolved,” said Mike Madigan, a vice president of Pardee Construction Co., which owns 700 acres in Otay Mesa.

Because Otay Mesa is on the border, officials from the Immigration and Naturalization Service are concerned that development will make it harder to keep out illegal aliens, who, the INS says, will be able to escape detection by blending into the bustle on the mesa.

In response to that concern, the city is asking developers adjacent to the border to leave a 150-foot buffer zone--which will probably be fenced--between them and the border.

“We’d much rather have 300 feet, but we recognize development is coming to Otay Mesa,” said Alan Eliason, chief Border Patrol agent for the San Diego sector. “We expect that as people move in, there will be more and more complaints about us doing our jobs, things like noise from helicopters and our vehicles. That’s guaranteed.”

One person with firsthand experience of that is Andrew Campbell, a Sweetwater Union High School District administrator who lives in an isolated part of the eastern mesa in a three-home community that includes his mother-in-law and a neighbor. He says what occurs on the mesa will probably surprise future residents unaccustomed to the flow of humans venturing from the south.

“Most (illegal aliens) are just passing through--I can show you a six-foot path in our barley field that they use--but once in a while something happens,” the burly 41-year-old Campbell said. He has seen undocumented workers walk into his house while he was watching a football game on television.

Two years ago, three illegal aliens were robbed and one of them was shot in Campbell’s backyard. “Businesses coming out here can put up a 14-foot fence or large steel bars, but most residents, I think, don’t want to do that,” he said.

But the mesa’s boosters say there is enough time to work out the problems, human and mechanical. Former Mayor Roger Hedgecock, who pushed to open up the mesa and who today works part-time as a consultant to De la Fuente, said the area “has its own dynamic.”

“From 1965 to 1980 it was all happening in North County. But the ‘80s and the ‘90s,” he said, “will belong to . . . the border.”