Tierrasanta Builders Won’t Raise Prices

The builders of the Tierrasanta Norte development promised Friday that they would not attempt to increase home prices for about 250 home buyers with sales contracts if the San Diego City Council refuses to create an unprecedented assessment district to pay for the project’s infrastructure.

The Lusk and William Lyon companies had told the home buyers by letter that closure of their escrow agreements would be held up until the council decided whether to approve the $23-million assessment district. They hinted that home prices might have to be increased if the council rejected the plan.

Those letters caused home buyers to demand council action at an emotional hearing Monday. Some said they had sold their previous homes and are living with relatives while they wait to move into their new homes in the 1,693-unit development.

Conceptual Approval

By a 5-4 vote, the council gave conceptual approval to the assessment district, which would raise the revenue needed to pay Lusk and Lyon for construction of roads, sewers and other infrastructure. The council will make a final decision on the issue at a May 9 hearing.

In the meantime, the companies will begin to close escrow with about 30 home buyers whose homes are nearing completion, said Don Steffensen, executive vice president of The Lusk Co.

The assessment district plan would allow the builders to remove the infrastructure costs from home prices and pass them on to home buyers via the new mechanism. The average home buyer will pay $1,700 to $2,000 in taxes annually. An additional 11 residential developers have asked for the establishment of assessment districts that would generate more than $270 million.

Steffensen said Friday that, if the council turns down the assessment district, the developer will attempt to recoup the cost of infrastructure construction by increasing the prices of homes to be built in later phases.