30-Story Tower in Joint Venture With Santa Fe : Great American to Build a New Headquarters

Great American First Savings Bank plans to move its headquarters to a 30-story structure that it will build in a joint venture with Santa Fe Southern Pacific Corp. at Broadway and Pacific Highway, the savings institution said Thursday.

The project is one of six high-rise proposed projects for downtown San Diego aimed at what developers say is a market “window” that will open over the next two to three years as office vacancy rates shrink. The project also is part of a migration by high-rise developers away from the B Street financial district and toward sites closer to the waterfront, brokers said.

Adjacent to Train Depot

Planned for a 1.5-acre site--now occupied by a parking lot--immediately west of the Santa Fe Depot, the office building would be the first phase of as much as 4.5 million square feet of office, retail and hotel space that Santa Fe plans to build on 16 acres it owns next to the depot.

Construction on the Great American headquarters building, which will have about 500,000 square feet of rental space, may start early in 1988 and be completed by 1991, Great American said.

The joint venture, however, will not begin building until 50% of the structure is leased, said Ed Levine, project manager for Santa Fe Pacific Realty Corp., Santa Fe Southern Pacific’s wholly owned development subsidiary in charge of the project. Great American plans to occupy at least 100,000 square feet, or one-fifth, of the structure.

Levine said the joint venture has not yet chosen an architect for the building and therefore could not estimate the cost of the project or discuss design details. The Great American deal is Santa Fe’s second major joint venture in the bayfront area. The railroad holding company and Embassy Suites have begun construction on a 337-room hotel on Pacific Highway at Martin Luther King Way.

The Great American-Santa Fe proposal is one of several office projects proposed for the West Broadway area, which is becoming a preferred development site because of its unobstructed view of and proximity to San Diego Bay.

The site lies cater-corner across Broadway from a two-tower 600,000-square-foot office-hotel complex planned by Koll Co. slated to begin construction in January, said Kraig Kristofferson, a downtown office broker with Coldwell Banker. The site is two blocks west of the site where developer Sandor Shapery plans a 30-story 375,000-square-foot building and hotel to be operated by Emerald Hotels of Japan.

Three blocks to the northeast of the Great American site, Cabot, Cabot & Forbes plans a 19-story 343,000-square-foot office tower on which construction will begin as soon as the project is 35% leased, Kristofferson said.

Of the six office buildings proposed for downtown San Diego, the closest to starting construction is Symphony Towers, a 34-story structure on B Street between 7th and 8th avenues. Construction financing is close to being completed, sources close to the project say, and steel could start going up within four weeks.

Vacancy Rates Still Falling

Developers seem to be accelerating their plans as downtown vacancy rates continue to drop from the record high levels of three years ago, Kristofferson said. As of March 31, downtown San Diego’s office vacancy rate was 14%, down from 16.8% on Dec. 31, and from 20.2% in March, 1986.

Although the rate is still high, Kristofferson said, tenants looking for spaces of 10,000 square feet or more with an ocean view have little to choose from.

Santa Fe received city approval to develop its nine-block holdings around the depot in June, 1983. It postponed construction plans after a glut of new office space pushed downtown vacancy rates above 24% in 1984.

“Vacancy rates are down considerably from what they were two years ago, and, in creating a joint venture with Great American and getting a statement of intent from them to anchor the building . . . that’s what I mean by the market being right,” Levine said.

Great American has had its main offices at its headquarters building at 6th Avenue and B Street since the building was completed in 1974. The 24-story 300,000-square-foot building was sold to Kowa, a Japanese investment firm, in 1982.

A Great American spokesman said Thursday that the savings institution plans to maintain offices at the building after the headquarters are transferred.