Downtown Building Left a Skeleton by Bankruptcy
The future of one of the key corners in downtown San Diego’s redevelopment effort has been dealt a setback because the developer, Richard Watson, has filed for bankruptcy.
The bankruptcy petition means that Watson’s attempt to restore a two-story, 19th-Century building at 4th Avenue and E Street is shelved, at least for the moment. Watson had planned to transform the building, across from the Balboa Theater and Horton Plaza, into Horton Court, a complex of high-rent offices, restaurants and shops.
Watson bought the property in July, 1985, for $2.8 million.
Last year, he put up construction barricades and gutted the 38,000-square-foot building, displacing some tenants such as the Sandwich Factory, a restaurant known for its giant sign and large variety of sandwiches.
Work was stopped after the building was gutted, and it now stands like a skeleton of pillars and bricks across from the pastel glitz of Horton Plaza. When previously asked about the progress of the restoration, Watson had said he was close to reaching agreements with major tenants.
Watson declined to accept calls Wednesday. His bankruptcy attorney, Ardelle Williams, said the Chapter 11 petition for protection from creditors and reorganization was filed Friday. She said Watson’s financial plight stemmed from several properties, of which Horton Court was one of the largest.
The petition noted that Pioneer Mortgage Co. had threatened to foreclose on the Horton Court project. In addition, Watson listed more than 20 creditors, including Allied Iris Bank of New York, which is owed $3.9 million.
Officials at the Centre City Development Corp., the agency in charge of downtown redevelopment, said they were unaware of Watson’s petition, although they knew he was in a financial predicament.
The petition for bankruptcy is also a setback for CCDC, which is in the midst of an ambitious effort to rehabilitate 4th Avenue south of Broadway.
“We knew that when he purchased the property . . . the amount he paid for it, made it difficult to put it (Horton Court) together,” said Pam Hamilton, the CCDC official who has worked most closely on the 4th Avenue restoration project.
CCDC approved Watson’s plans for the corner and encouraged its redevelopment, but the agency has no financial interest in the property.
“Sure, we’re disappointed, but people do get out of bankruptcy,” Hamilton said. “It’s a well-located property . . . so while there might be some more delay, we think someone will develop it.”
Watson has 15 days to file a list of assets and debts with the bankruptcy court.
