San Diego

Two downtown civic groups announced Thursday that they are dropping their opposition to the city’s proposal to build a civic center on East Broadway, near the new Police Department building.

Officials from San Diegans Inc. and the San Diego Taxpayers Assn. said they will support the Broadway site if the city goes ahead with plans to finance the project with certificates of participation. However, they also noted that the estimated cost of building the complex is $275 million, $89 million higher than the estimated cost of remodeling the existing building at 2nd Avenue and C Street.

Robert Lichter, first vice president of San Diegans Inc., explained that the city’s preference for financing the new project with certificates of participation made all the difference. The certificates are a funding mechanism, much like bonds, that will yield an average interest rate of about 6.5% over 35 years.

Using this alternative funding means, taxpayers would not have to help finance the project through increases in property or sales taxes. The city could also generate at least $4 million a year in rent from the lease of the existing facilities. The property could also generate property-tax revenue, Lichter said.

The city could offset the $89-million difference in construction costs by creating a redevelopment district on the existing site, he said.