CCDC Gives Luxury Condominiums the Edge in Bid for Downtown Site
It’s exaggerating to say that developers are falling over themselves to get a crack at downtown San Diego’s building boom. But not by much.
That was made clear again Friday, when downtown redevelopment officials found themselves in increasingly familiar territory: sorting through competing multimillion-dollar proposals for a small piece of city-owned property, this one at the southwest corner of Broadway and State Street.
“It’s a nice position to be in,” said Pam Hamilton, chief of Centre City Development Corp., the agency in charge of downtown redevelopment.
Three Different Proposals
Competing for a chance to build on the 33,321-square-foot site are three development groups. The front-runner, selected by a committee of CCDC directors, is called The Huntington, a 38-story, $91-million luxury condominium project with 196 units. It is proposed by the Koll Co. and Davidson Communities Inc.
The other two are a 30-story, $44-million high-rent apartment building with 287 units called 900 State Street, by El Dorado Asset Management Inc. and Trammell Crow Co., and a 16-story, 296-room, $25-million all-suites hotel called City Suites, by First Integrity Hotel Corp. and Sandor Shapery.
After hearing from all developers, CCDC delayed a decision until May 19, because board member Tom Carter was absent and board president John Davies had to leave the meeting early.
Under the Huntington proposal, CCDC would be paid a minimum of $2 million for the site and receive $912,000 a year in special redevelopment taxes, more than double its closest competitor, 900 State Street. Aside from the financial return, some CCDC board members and staffers like the look of the 500-foot-tall building, which resembles a 1930s tower.
Cost Up to $1 Million
The condominiums, which are expected to cost $350,000 to $1 million, would range in size from two-bedroom, 1,525-square-foot units to three-bedroom, 2,565-square-foot units. They would include wooden floors and 9-foot ceilings. The Koll Co. also is building two high-rise office towers on the property next door.
“The time is perfect to be looking at downtown housing,” said Bill Davidson, president of Davidson Communities, who last year was president of the Building Industry Assn.
The 900 State Street project would pay CCDC a minimum of $3.2 million for the property and generate $442,000 in special redevelopment taxes annually. El Dorado Asset Management recently added Trammell Crow, one of the nation’s strongest and most-experienced real estate developers, as a 50% partner, to help counter fears about El Dorado’s strength as a developer. The apartments would range from 467-square-foot studios to 1,892-square-foot, three-bedroom units priced for “downtown yuppies,” in the words of the developer’s spokesmen.
A.J. Lirot, of El Dorado Asset Management, and Daniel Golozato, of Trammell Crow, maintained that an apartment complex would be easier to finance and would fill up with tenants faster than a condominium such as The Huntington or downtown’s first luxury condominium high-rise, the Meridian, which after nearly four years is about 80% sold.
“We can adjust rents . . . we can make it fill up,” Lirot said.
The building includes a child-care center for up to 60 children, and, at 20,000 square feet, much more ground-floor retail and commercial space than either of the other proposals.
Hotel for Extended Stays
The third project, City Suites, appears to be in last place among the competitors. Sandor Shapery said the hotel would provide extended-stay accommodations to business travelers who must live in San Diego for less than a year and often return home on weekends. He likened the concept to the services provided by the Oakwood Apartments chain.
The rooms would rent for $60 to $70 a day, he said.
Shapery also is familiar with the site. He is a developer of the Emerald-Shapery Center high-rise office and hotel complex under construction directly across Broadway.
Tokyu Corp., a Japanese firm that is putting up the $130 million for the Emerald-Shapery Center, has expressed concern about the height of some of the proposals, since it had been told that nothing higher than a 16-story hotel would be built on the Broadway and State Street property.
The Huntington project, for example, would be about 100 feet taller than the Emerald-Shapery hotel. A Tokyu Corp. official, in a letter to CCDC, said that, if views from its building are blocked, the company would “suffer (a) substantial economic loss.”
Hamilton, CCDC’S head administrator, said the agency has neither guaranteed protection of private views nor, as she specified in a letter to Tokyu, “is it recommended that such a practice be instituted.” CCDC plans also call for tall high-rises in specific areas of downtown, such as on Broadway.
Mike Stepner, San Diego city architect, had recommended that The Huntington be reduced to 400 feet, but the developers said they couldn’t cut the height and keep the project financially feasible.
That CCDC is in a position to be picky is another example of how things have changed. For years, downtown was an urban desert. The opening of Horton Plaza almost four years ago helped signal a transformation.
Even after Horton Plaza, though, the common practice was for a development-hungry CCDC to call for bids and then find itself working with a single developer. But in the last two years, there has been more interest in property designated for some of the city’s tallest buildings.
It began in 1987, with competing proposals for property at Broadway and Kettner Boulevard, where the victors, Starboard Development Corp. and Great American Development Co., plan to build a $200-million plaza consisting of a 33-story office tower and 15-story hotel.
Then there were dueling development proposals for the block between 1st Avenue and Front, Market and G streets, eventually won by the Tutor Saliba/Paragon Group, which plans to build a 40-story apartment tower.
