40-Story Apartment Tower for Downtown Wins CCDC Backing
A striking 40-story apartment tower that will be San Diego’s tallest building was endorsed Friday by the city’s downtown redevelopment agency.
In doing so, the Centre City Development Corp. ended the fiercest competition it has yet encountered among private developers vying for a foothold in the increasingly attractive downtown market, which just several years ago repelled developers.
The proposed $52-million complex, including a tower reminiscent of the renowned Chrysler building in New York City, would consist of 400 one- and two-bedroom apartments, 80,350 square feet of street-level commercial space and a large open public plaza.
Called the Courtyard, the building would take up the block bounded by Front, First, G and Market streets, catercorner from both the Nordstrom store at Horton Plaza and the high-rise Meridian condominium building.
Ironically, just three months ago the developers of the Courtyard were chastised by CCDC because their original design was considered too massive and box-like for the budding residential neighborhood known as the Marina Redevelopment Area.
But the developers, a joint venture of the Los Angeles-based Tutor-Saliba Properties and the Dallas-based Paragon Group, did a complete reversal, dropping its former architects--Rob Wellington Quigley of San Diego and The Nadel Partnership--and replacing them with Pereira Associates, a large firm whose projects include the Transamerica pyramid building in San Francisco.
The new design encompassing the 40-story, 450-foot-tall tower provided the developers with the winning edge over its two other highly qualified competitors, the Denver-based Broe Cos. and the partnership of the Urban Pacific Group and VMS Realty Partners.
From a financial standpoint, CCDC acknowledged that from the beginning Tutor-Saliba/Paragon had submitted the strongest bid. And that didn’t change Friday, even though the two other competitors had increased the money they were willing to pay the redevelopment agency in exchange for exclusive rights to develop the block.
Tutor-Saliba/Paragon has agreed to pay CCDC a minimum of $4 million, the most any developer has ever paid to the agency. That amount, combined with a new architectural design, was just too good for CCDC to pass up.
Technically, Friday’s unanimous decision by the CCDC board of directors means the agency and Tutor-Saliba/Paragon will now begin six months of exclusive negotiations to come up with a contract detailing the responsibilities and obligations of the two sides. After the contract is signed, the developers can begin construction.
If everything goes as scheduled, the structure will be completed in 1991. Rents for the apartments are expected to range from about $560 for a 450-square-foot studio to about $1,365 for a 1,100-square-foot, two-bedroom apartment. A review committee composed of Marina-area residents, while effusive in its praise of the building’s design, suggested that the structure could be improved by adding large three-bedroom units.
Good Luck Played a Role
While the redevelopment agency is satisfied it has extracted the best design and financial package it could from the three developers, CCDC Chairman John Davies said the choice was the result of “serendipity” and “good luck as (much as) good handling.”
That’s because this was the first time CCDC was faced with a “hotly contested” battle among major developers over a property. As a result, the agency found itself in unchartered waters and extended its deadlines to accommodate objections lodged by the developers, two of whom asked for more time in March, when the proposal by the Broe Cos. appeared to be in the lead.
A representative of the Broe Cos. told the CCDC board Friday that the firm had spent close to $200,000 on the project.
“Next time we have to set hard deadlines,” Davies said. “It shouldn’t cost $200,000 to get to this point.”
For Tutor-Saliba, this marks its second large San Diego project. The company’s construction arm is building the city’s $150-million, bay-front convention center. The Courtyard promises to the company’s largest residential project. Its partner, the Dallas-Paragon Group, has extensive experience both developing and managing residential projects nationwide.
Friday was a busy day for the CCDC board of directors. In other action, it:
- Approved a contract with HSD/Horton Associates and Oliver McMillan Fourth Avenue to build apartments, offices and retail stores on what is now the open-face facade on the 4th Avenue side of Horton Plaza.
The new development will include 34 apartments, 18,000 square feet of offices and 16,000 square feet of retail space in the narrow, barren spot of land that has been the focal point of much criticism from area merchants, who say the shopping center’s garage facade is an eyesore that detracts from the neighborhood.
CCDC will help subsidize the approximately $9.5-million project by providing about $1.5 million, according to agency spokeswoman Kathy Kalland. In return, CCDC will receive 25% of the project’s net cash flow. Building is not expected to start until next year.
- Approved a contract with developers Bud Fischer, Chris Mortenson and Shawn Shrager to build a $7-million, 221-room single-room occupancy hotel for low- and moderate-income people at the corner of J and 2nd streets.
The redevelopment agency will help subsidize construction of the project by providing about $1 million. In return, the hotel promises to rent to low- and moderate-income people for 30 years.
- Gave final approval to Nexus Development Corp.’s plans to build a $2.7-million building on 4th Avenue in place of the Swank and Apache Go-Go bars, two saloons that stand as decaying vestiges of downtown’s honky-tonk past.
In their place will be built a four-story building housing lawyers’ office on the top three floors and an Irish pub and restaurant on the ground floor. The property is now owned by CCDC, which will sell it to the developers for $400,000.
