3 Firms Woo CCDC For Right to Build Downtown High-Rise
It’s a sign of the changing times in downtown San Diego. On land where the city once went begging for developers, companies are now locked in fierce competition for the chance to build.
That was apparent again Friday when the Centre City Development Corp.--the agency in charge of downtown redevelopment--was faced with selecting one of three strong developers with which to negotiate for the construction of a 30-plus-story apartment building across from the Nordstrom store at Horton Plaza.
But the agency’s board of directors, not completely enamored with any single proposal but instead liking elements of all three, punted. It deadlocked, 3-3, over approving the project selected by an agency subcommittee: the 32-story, 334-unit, $36-million apartment complex proposed by Denver-based Broe Companies.
So in two weeks, on March 18, when the seven-member board will be at full strength with the return of a healthy Henri Lagatella, the agency will vote on the developers once again. It’s doubtful, however, given the tenor of discussions Friday, that any of the three projects will be capable of receiving unanimous approval, which normally results.
While CCDC was bogged down on the high-rise apartment issue, it had no such difficulties in approving a proposal that will cause the demise of the Swank and Apache Go-Go bars--4th Avenue saloons that stand as decaying vestiges of downtown’s honky-tonk past.
$2.7-Million Building
In their place, the Nexus Development Corp. plans to build a $2.7-million building housing the 25-person law firm of Sullivan, Cummins, McDade, Roberts & Wallace on the top floors and an Irish pub and restaurant on the ground floor to be called Reidy O’Neil’s, the name taken from Nexus President Mike Reidy.
Both the company and CCDC will spend the next 90 days negotiating a development agreement. Among items to be negotiated is what the company will pay CCDC for the property, though it will be between $350,000 and $450,000.
In yet another downtown development matter, the agency decided to give builder Neil Senturia and his new partner, Bruce C. Stark, until April 1 to complete their business agreement before it will consider extending Senturia’s negotiation agreement for the fourth time.
Senturia and his former partners first entered into a negotiation agreement with the agency in August, 1986, for construction of a large high-rise residential tower on a block bounded by J, 1st and 3rd streets and the railroad tracks, which is located across from the convention center now under construction. Since then, Senturia has changed partners more than once and the project itself is now radically different, consisting of two slender high-rise structures.
Back to the matter of deadlock, CCDC board members were effusive in their praise for the three projects. It is clear that had any of the proposals surfaced alone five years ago, when the investment climate downtown was still regarded as risky, CCDC would have gladly jumped at the chance of striking a bargain. But things are much different today downtown, and in many ways, CCDC is no longer the suitor but the courted.
Original Proposals
Five developers had originally made proposals to build the heavily residential high-rise mixed-use project on property bounded by 1st, Front, G and Market streets. That was whittled to three. And then a CCDC subcommittee--composed in part by three members of the board--more closely evaluated each plan, traveling over a weekend to Denver, San Francisco and Los Angeles to view first-hand other projects the developers had built.
The subcommittee, on a 2-1 vote, recommended the so-called Sea View Centre proposed by Broe Companies, a Denver-based builder that has an office in San Diego and which has bought the 400 Corporate Center at 1551 4th Avenue.
According to subcommittee chairman Tom Carter and Pam Hamilton, acting executive vice president for CCDC, the committee was impressed that Broe Companies President Patrick Broe was a “hands-on” builder intimately involved in his firm’s plans and that residential buildings the company has built in Denver “work” for the people who live in them and for the surrounding environment.
“The product in Denver is what we want in San Diego,” Hamilton said. “The feeling was that . . . (Broe) was an individual that was going to care about the project from day one and for forever.” And while the two other competing proposals may potentially provide the city with more money in the long run, Carter said the decision had to do with more than just dollars and cents. “I see it being built quicker and with fewer problems,” Carter said. “The (development) team is in place. . . . We have a hands-on developer.”
But for some board members the proposal has two weaknesses, weaknesses that are the strengths of the two competing plans. First, there is concern about the architecture of the project--even though it is still preliminary. Second, the other proposals not only cost more, up to $55 million, but one of them provides the city with about $3 million more in return.
The two other finalists are Beacon Place, proposed by the partnership of Urban Pacific Group and VMS Realty Partners, and The Entrada, a partnership of Tutor-Saliba/Paragon Group.
Beacon Place, consisting of a 31-story tower, an eight-story mid-rise and 375 apartments, was ranked by the subcommittee as having the best design and architecture, a sentiment also shared by the rest of the board, judging from Friday’s comments. While praising Beacon Place, board member Gil Ontai, himself an architect, said of the Sea View’s project, which entails a 32-story tower surrounded by several low-rise units: “I see six high-rise boxes with flat tops.”
Michael Reyes, president of Urban Pacific, told the agency board that his partnership wants to build the high-rise so badly, he offered at the meeting to increase his group’s initial land payment to the city by $600,000, bringing it to $1 million.
The Entrada was ranked first in the amount of money it will return to the city. Ron Tutor, the head of Tutor-Saliba, the company that is building the San Diego convention center, told the board that his company would pay the city at least $4.5 million for the property. “We’ve offered you far more money for this property than any of the other developers,” he said.
The trouble with The Entrada, according to several board members, is that while it is a better deal financially, they don’t like what it looks like, an imposing 36-story building containing 417 apartments. Tutor emphasized that the architecture was only preliminary and could be substantially revised to meet CCDC’s needs.
Apparently both his comments and the sentiment for Beacon Place led to the 3-3 vote on the Sea View project.
“What we want,” said CCDC President John Davies, “is for Pat Broe to build Beacon Place with Tutor’s financial terms.”
