2 Firms Join Forces in Downtown Development

Having decided to join forces, two companies competing for the right to develop a key block downtown have asked the agency in charge of downtown redevelopment to delay a critical vote on the property while they try to hammer out a partnership agreement.

Crystal Galleria and Starboard Development Corp. each control about half of the block bounded by Broadway, C Street, India Street and Kettner Boulevard. Each had submitted opposing office-hotel-retail development proposals that would incorporate a San Diego trolley station and the Bay Side Line trolley extension that by 1989 will run diagonally through the block.

By teaming up, the developers will create a “win-win situation” and, by combining each other’s property, eliminate the delays involved in using the city’s condemnation powers to assemble the block, Crystal Galleria spokesman Rob Adatto said Thursday.

And time is of the essence in the economics of the project. Starboard President Bradford Saunders said the developer of the block must have the trolley line available for operation by June, 1989. The further along construction has progressed by then, the less the project will cost to build, he said.

Centre City Development Corp. was to have voted today on recommending one of the two projects for consideration by the City Council, which sits as the city’s redevelopment agency. In a preliminary decision earlier this month, a CCDC subcommittee had recommended that the Crystal Galleria proposal be approved over Starboard’s.

Crystal Galleria, whose development group includes several of the block’s landowners, proposed building two 27-story office towers connected by a 400-foot glass-paneled atrium. In addition to the trolley station, the $84-million project would include galleria-style retail space on the first three floors. One of the towers possibly could be a hotel, Adatto said.

Starboard had proposed a two-block project, incorporating the full block to the north bounded by Kettner, India, C and B streets. The Starboard project would include a 365-room hotel on the southerly block and, connected by a pedestrian mall, a combination office tower-government center on the northerly block.

Starboard’s proposed 200,000-square-foot government center would consist mainly of Superior Court rooms.

Both parties stressed that while a partnership was in both’s best interests, no deal has been reached. And while Adatto said that his top priority was in getting a one-block project approved by the city, Saunders said that Starboard’s participation in the project would be contingent on CCDC approving a two-block project.

Adatto and other members of the Crystal Galleria team submitted their proposal in response to the Starboard proposal, unveiled last summer. State law provides that landowners in a redevelopment area have the opportunity to submit counterproposals. The Adatto family has owned a 10,000-square-foot chunk of the block fronting Broadway since 1939, Adatto said.

Besides other landowners, the Crystal Galleria team includes the Deems, Lewis & McKinley architectural firm, the project’s designer, and Mellon Stuart Construction Co. of Pittsburgh.

Bowlen Corp., the firm that developed the First Interstate Plaza office tower downtown, was initially a part of the Crystal Galleria team but has since dropped out, Adatto said.

Starboard built the San Diego Police Department’s new administrative center and will break ground next month on the 180,000-square-foot Metropolitan Transit System headquarters building at 12th and Island avenues.