Incorporates Trolley Station : Proposal for High-Rise Complex to Revert to Original Developer

The effort to build a high-rise complex at the foot of the trolley line in downtown San Diego has taken yet another twist, and the original developer--who was told to take a back seat when a more attractive proposal came along--is now expected to win an exclusive negotiating agreement Friday with the city’s redevelopment agency.

Finding itself back in the winner’s circle is Starboard Development Corp., which wants to build a $120-million, two-block project that includes both a high-rise hotel and office building on two blocks east of the Santa Fe depot.

And finding itself without a project is Crystal Galleria, which had proposed an $84-million pair of towers connected by a 400-foot, domed atrium on one block bounded by Broadway, Kettner Boulevard, C and India streets.

Crystal Galleria, which had been the choice of a Centre City Development Corp. subcommittee, dropped out of the competition on Monday, an act it expects to make official Friday at the CCDC board of directors meeting. CCDC is the agency in charge of downtown redevelopment.

Firm Dropped Out

Initially, the Bowlen Corp.--the firm that developed the First Interstate Plaza office tower downtown--had been part of the Crystal Galleria development team, but dropped out.

As a result, a little more than three weeks ago, both Crystal Galleria and Starboard Development asked CCDC to delay a critical vote on the matter while the two sides attempted to work out a partnership agreement.

Now, according to CCDC documents and interviews, Crystal Galleria’s project is dead and Starboard Development will “acquire” the main property involved in Crystal Galleria’s proposal. That property is a 10,000-square-foot parcel at Broadway and India owned by the Adatto family under the corporate name of Cethron Inc.

The CCDC board of directors, according to documents, will be asked to approve a 150-day negotiation agreement with Starboard Development for the development of two blocks bounded by Broadway, B Street, Kettner and India. The proposal calls for construction of a 365-room hotel, 544,500 square feet of office space, 77,820 square feet of retail space and 462,000 square feet of parking space.

Reluctance to Talk

Rob Adatto, spokesman for Crystal Galleria, was reluctant Wednesday to talk about the details of his arrangement with Starboard Development, saying “we’re in a sensitive stage right now.” And a spokesman for Starboard Development was equally reticent, saying that the company plans to hold a press conference Friday to discuss the project.

Starboard Development President Bradford Saunders said, however, his company’s original proposal has been significantly refined architecturally and has more substance than the one his firm first presented to the public in June.

“We hope to have all the work completed by Friday, all the documents and things,” Saunders said.

Two of the project’s most striking features, though, remain.

Trolley Part of Plan

The first calls for the San Diego Trolley to run through the center of the hotel’s ground floor, creating a three-story galleria of shops and restaurants as well as a central trolley station for the Bay Side Line extension, which by 1989 will run diagonally through the block.

The second feature involves turning as least the first five floors of the office building into a 200,000-square-foot county government center, primarily to house about 20 courtrooms and offices for prosecutors, court clerks and judges. As first proposed by Starboard Development, the county would “buy” space, using tax-exempt private financing. The rest of the office tower would be leased commercially and financed by the developer.

Starboard, which holds an option to buy half of the land in its project, announced its plans in June. By state law, landowners in the redevelopment area--in this case the Columbia Redevelopment Area--have the opportunity to submit counterproposals, which is what Crystal Galleria did in September through the Adatto family’s property holding.

In October, a CCDC subcommittee evaluating both proposals recommended the Crystal Galleria, primarily because it offered better financial terms to CCDC and was more appealing architecturally.