Downtown Housing Development Becomes Success Story : Construction: San Diego’s redevelopment zones reflect city center’s newfound viability as a housing market.
After 10 years of fits and starts, the downtown San Diego housing market finally seems to be hitting its stride.
Downtown’s four redevelopment zones are alive with construction of apartments and condominiums of every size and price range, from million-dollar penthouses at the sleek, twin-towered and soon-to-open One Harbor Drive to single-room occupancy hotels for the economically disadvantaged.
The development pace is accelerating. Of the 3,000 new housing units that have been completed in the city’s redevelopment zones over the past decade, about 700 have opened over the past year, Center City Development Corp. executive vice president Pam Hamilton said Monday.
Another 345 units are under construction, she said, and projects totaling 900 units are on the drawing boards.
There are several reasons for downtown’s new viability as a housing market, said Bruce Stark, developer of the 202-unit One Harbor Drive. There is the Horton Plaza shopping mall, open seven years now and a fixture in San Diegans’ shopping habits. The San Diego Convention Center has attracted many San Diegans to downtown and reacquainted them, he said, with its amenities.
The Gaslamp Quarter now gives downtown residents legitimate options in food and entertainment, Stark said.
“What’s happened is there is a realization in the marketplace that downtown is alive, and an exciting and fun place to live,” Stark said. “It’s synergy. One thing by itself wouldn’t do it.”
The apparent success of downtown housing developments provides a measure of satisfaction to Hamilton and other staffers at the city’s redevelopment agency.
The agency looked on helplessly in 1982 when its first two sponsored redevelopments, Park Row and Marina Park, opened in the midst of a deep housing slump and sky-high mortgage rates. The city floated mortgage revenue bonds to raise low-cost financing but, even so, mortgages still featured 13.5% interest rates.
Park Row and Marina Park, which together totaled 446 units, took more than five years to sell out, Hamilton said. Although those projects have since appreciated in value, the sluggish market for the units worked to stall downtown housing redevelopment efforts.
“There wasn’t anything to do downtown then. Gaslamp was just getting started. Horton Plaza was supposed to be finished but wasn’t,” said Max Schmidt, CCDC’s assistant vice president for planning and engineering, referring to the fact that Horton Plaza opened three years behind schedule.
“In the last 12 years, the amenities and ambience have improved greatly and developers have had confidence in the city’s redevelopment effort,” he said.
“And perhaps there is a more sophisticated market out there.”
Stark said he has already sold half of the units at his 41-story One Harbor Drive project two months before the units are officially completed. Prices range from $275,000 to more than $2 million per unit.
Stark, who has built more than $1 billion worth of luxury condominiums in Hawaii, said he is moving his U.S. construction operation to San Diego. He controls another full downtown San Diego block and is considering his development options.
If there is a common thread among Stark’s buyers, it is that many are part of a “move down phenomenon.” That’s how Stark describes owners of expensive homes who are empty nesters, approaching retirement and desirous to unburdening themselves of their large houses.
“They’ve had it with traffic, are worried about security and maybe approaching retirement,” Stark said. “They are thinking about travel and want mobility and to be close to the job. They want to walk to entertainment. It’s all right here.”
Stark isn’t the only developer with large-scale projects. Cityfront Terrace, a 321-unit condominium project on Market and Union streets, is scheduled to be open by Spring. The 387-unit Seabridge Apartment Villas on G Street has just been completed.
