Redevelopment Area Downtown May Be Tripled

The San Diego Planning Department has recommended that nearly all of downtown--defined as most of the 1,200 acres west of Interstate 5 from Laurel Street on the north to Harbor Drive on the south--be made into one big redevelopment area.

If approved by the City Council, the expansion would nearly triple the domain of the Centre City Development Corp., the agency in charge of downtown redevelopment.

It would take about two years for the massive expansion to become reality because the city and the CCDC would have to undertake the preparation of time-consuming studies, hearings and reports.

The matter, as outlined in a city planning report, will be discussed today by the Centre City Planning Committee, a group led by shopping center developer Ernest Hahn to evaluate land use in the entire downtown.

Formal Approval Next Summer

If the committee approved the expansion idea, it would set in motion a more detailed evaluation of the plan by both the Planning Department and the CCDC, leading to a request for a preliminary approval from the City Council in late spring, followed by the council’s formal approval in the summer.

“We’re trying to test the waters and see if there’s concurrence” with Hahn’s committee, said Mike Stepner, the city’s assistant planning director.

The idea of expanding the downtown redevelopment area has been kicking around since at least 1976, when the city identified the entire downtown as ripe for such a designation, Stepner said.

More recently, the city has placed much emphasis on expanding redevelopment to Centre City East, an area roughly bounded by 6th Avenue, Interstate 5, Russ Boulevard and San Diego Bay.

But upon closer examination of the proposed Centre City East expansion, the city Planning Department felt it was better to encompass the rest of downtown.

“It seems to make sense from a staff standpoint to do it all in one step,” Stepner said.

The power behind redevelopment is money. Once an area is designated as blighted and thus eligible for redevelopment, the law allows special tax incentives. It works like this:

Take a vacant lot. Property taxes generated by the vacant lot are “frozen” at their current rate, say $100 a year. This means regardless of what happens to the property, government agencies such as the city, county and school districts continue receiving the $100 in taxes from the property.

Tax Increments Fund Other Projects

When the vacant lot is improved with a high-rise, the property’s value increases. Annual taxes increase to, say, $1,000. The $900 difference between the old tax amount and the new tax amount--known in bureaucratic jargon as a tax increment--goes to the redevelopment agency to fund other improvements in the blighted area.

In theory, redevelopment thus funds itself.

However, critics of the process say that redevelopment works to the detriment of other taxing agencies, such as school districts, which don’t receive any of the new, increased taxes for many years. The tax windfall is traditionally used to pay off bonds, many of them 20 years in length, that help fund redevelopment area improvements, which run the gamut from fixing streets to buying property for projects.

As recommended by the Planning Department, the downtown would be merged into the city’s existing Columbia Redevelopment Project Area. Included in such an expansion would be the current Marina Redevelopment Project Area, as well as areas known as Bayside, Centre City East, the Cortez Hill area and the Harbor View neighborhood.

Excluded would be the Gaslamp Quarter and the Horton Plaza areas, which are already set aside in separate redevelopment areas. Also excluded would be portions of already fully developed blocks, such as exist on the budding B Street corridor, the site of many office high-rises.

Also, all the areas next to the bay that are considered tidelands would remain under the jurisdiction of the San Diego Unified Port District. But, according to a Planning Department report, the higher taxes derived from new development on the tidelands would be used to help finance improvements in the redevelopment area.

Among the benefits accrued from the expansion and outlined in the report:

- Allowing the city “greater guidance over the future quality of life and the environment, i.e., the physical and economic shape, form and fabric of downtown.”

- Helping the county finance the construction of new courts and office space.

- “Developers will benefit from being able to obtain extraordinary treatment on their projects,” including the reduction of risk and help in the form of subsidies.

- A general “upsurge in property values” that would benefit property owners and investors.

- The ability to provide new, affordable housing for “the economically weaker sections of the population.”

Pam Hamilton, CCDC’s assistant executive vice president, said the idea behind making downtown one big redevelopment area is that it gives an agency such as the CCDC more flexibility to use property-tax money for improvements throughout the entire area.

In practice, she said, the CCDC would probably work the way it does now--even though its territory would increase from about 325 acres to about 1,200.

“Our strength is that we’ve been extremely focused . . . . I think in any expansion, we’d establish target areas and priorities” instead of working on a large number of multiple projects simultaneously.

Hamilton said it is important that Hahn’s committee approve the concept of expansion today, but it will be up to the CCDC board of directors to decide whether the Columbia Redevelopment Project Area should be merged.

“The CCDC board deserves first crack,” she said, explaining that a special workshop would probably be held soon to discuss the proposal. Such a session, she said, would also entail how many more people CCDC would have to hire to oversee more territory.

Not to be overlooked, Hamilton said, is the reaction of other government agencies and of people who live in Harbor View and Cortez Hill, who until now have not been involved in discussions concerning the proposal.