Michael Smolens: San Diego faces big moments on big properties

San Diego seems to be trying to overcome uncertainty on moving forward to redevelop iconic properties. The reluctance is understandable.

Recent real estate debacles, often self-inflicted, have made the public wary of the city’s ability to handle big projects.

The city’s purchase of the troubled office building at 101 Ash St. is the poster child for bad land transactions, but there have been others. Even well-reasoned decisions have sometimes resulted in fits and starts.

Meanwhile, immediate financial challenges have preoccupied City Hall.

Those clouds loom amid recent actions and discussions about overhauling and enhancing valuable properties. They include a quiet and underutilized corner of Mission Bay at Quivira Basin, the massive Midway Rising proposal for the sports arena and surrounding land, and the former Horton Plaza mall in the heart of downtown.

There is movement on all these properties, though the pace varies greatly. All face challenges and doubts. Some private development and city officials have recently suggested that the city get over its obsession with its 101 Ash St. failure, while retaining lessons learned.

“Ash Street was a fiasco,” Nate Bosa, a major downtown developer, told the Union-Tribune’s Jennifer Van Grove. “They’ve got to get over that. That’s what it was, period. But they have an opportunity now to do the opposite right here (at Horton Plaza), which is make an incredible deal.”

San Diego Planning Commissioner Matthew Boomhower recently focused on successful projects such as Petco Park, Liberty Station and the emerging SDSU Mission Valley that have improved their locations.

Echoing others, he said Midway Rising could join those “iconic projects” when the commission last week unanimously endorsed the sweeping residential, commercial and entertainment venue proposal.

Not everybody foresees such a positive outcome for Midway Rising, with critics maintaining some of the buildings will be too tall and heavy traffic will clog the area, affecting nearby neighborhoods.

There’s also skepticism about what the city will get out of the eventual lease. The project will be so far down the line when the terms are formally agreed upon that the city’s leverage will be in question.

But the development team is committed to constructing 2,000 residential rent-restricted housing units for people earning up to 80 percent of the area median income. In all, the project calls for 4,254 residences, a 16,000-seat replacement arena, 130,000 square feet of commercial space, 8.1 acres of parks, and another 6.4 acres of plazas and public space on 49.2 acres of land.

At Quivira Basin, the city wants to see its properties redeveloped into a conference center and hotel with public amenities, which is allowed under Mission Bay’s master plan. Currently, the aging Marina Village conference center, Dana Landing marina and nearby Sportsmen’s Seafood restaurant occupy the land.

However, San Diego’s hopes have run into a conflict with state law demanding that affordable housing must be prioritized at public “surplus property.” Housing is forbidden in the master plan for the area.

Still, the city initially sought to declare the property surplus land, apparently with the expectation that developers wouldn’t bite because the hurdles to build housing would be too onerous, particularly at the California Coastal Commission. That would drop the Surplus Land Act housing requirements.

But even before then, one developer pitched a project with a hotel, conference center and 900 homes, raising more than a few suspicions about the city’s intent. The Mayor’s Office said the proposal was unsolicited and rejected it. The city decided against the surplus lands designation.

Now, San Diego is again seeking an exemption from the surplus land requirement, either through the governing state agency or legislation.

Unlike the Midway and Mission Bay sites, the future of Horton Plaza is just at the talking stage. But the conversation has heated after Van Grove’s recent story in which development experts envisioned the abandoned property filling a void downtown and solving the dilemma of finding a replacement for the 60-year-old City Hall.

Opening in 1985, the mall, with its unique design and variety of offerings, became an attraction throughout the region and beyond. It was the linchpin to successful downtown revitalization. But decades later, the mall had seen its day, was sold and was to become an office and tech hub with some retail and housing.

The pandemic hit, the market changed, the project faltered, and the property fell into foreclosure.

Downtown insiders see a public-private development opportunity, particularly because of the potential for a cut-rate price on the property. Mayor Todd Gloria has kept his distance from the discussion so far, at least publicly.

Meanwhile, some council members and others have requested a study to look at possibilities involving redevelopment of the Civic Center.

(UPDATE: The previous paragraph has been corrected to reflect that the study would be focused on the Civic Center, not Horton Plaza.)

For many years, San Diego has been trying to replace its old, worn-out City Hall and adjoining Civic Center properties a block north of Horton Plaza. Facing a budget shortfall and backing several unpopular fee increases, Gloria some time ago said he was putting the brakes on the pursuit of a new City Hall and redevelopment of the Civic Center.

But private and nonprofit groups continue exploring long-term options for that whole core area, with support from some council members.

The mayor and City Council understandably are focused on addressing immediate fires before they grow into full-blown conflagrations. Amid all this, there’s a question of whether the city can, or should, move ahead with big things in the long term.

But Midway Rising appears to be happening after false starts, though it’s not a done deal. The redevelopment of Mission Bay and a reimagining of Horton Plaza are tantalizing, though they face problems and uncertainty.

Liberty Station, SDSU Mission Valley, Petco Park and the Horton Plaza mall had their doubters and opponents but overcame seemingly intractable hurdles.

And, fingers crossed, even the infamous 101 Ash St. may have a new life with a proposed transformation into hundreds of affordable housing units.