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San Diego
Wednesday, May 22, 2024

Kearny Mesa Planners Object to Zone Updates In General Plan Proposal

As San Diego pens updates to the city’s General Plan, industrial and office property owners are concerned how it will affect Kearny Mesa.

The Kearny Mesa Planning Group, the local community planning advisory board; the San Diego chapter of the National Association of Industrial and Office Properties; and a handful of large property owners are concerned that the city’s sweeping final draft of the General Plan update issued last month could have negative economic consequences if implemented.

Buzz Gibbs, chairman of the Kearny Mesa Planning Group, says all parties, including the city, have the same objective: to protect employment land. But there is a real difference of opinion on how to achieve this goal.

“The Kearny Mesa Planning Group by consensus supports the city’s goal to prevent incompatible sensitive receptor uses, which are schools and day-care centers and acute-care hospitals,” said Gibbs. “We really want to keep Kearny Mesa, especially the areas where there is still manufacturing industries, free from these encroaching, non-industrial uses that can potentially hurt or curtail existing companies from making their products.”

Currently, most of Kearny Mesa is zoned for light industrial uses and allows other uses such as commercial and retail. The city’s final draft General Plan update includes a zoning map overlay that limits use to primarily industrial in a significant portion of Kearny Mesa. This industrial map would limit land use to research and development, multi-tenant industrial and office.

“Office properties right next to industrial properties are concerned they may not be able to rent space to future tenants and are also concerned of the potential loss in land value,” said Gibbs. “Everyone wants the highest and best use of land.”

The local chapter of NAIOP, consisting of 450 members, including architects, brokers, developers and investors, notified members about the proposed update in an effort to attract more invested voices to planning group meetings.

Several property owners, including Arden Realty Inc. of Los Angeles, Collins Development Co. of San Diego, Equastone real estate investment advisers of San Diego, Menlo Equities LLC of Palo Alto, and the RREEF real estate and investment management firm, have asked to be excluded from the industrial map overlay proposed by the city in its draft General Plan. The Kearny Mesa Planning Group says it will send this request to the city.

Land-Use Squabbles

John Turpit, an architect with RJC Architects Inc. of San Diego, says this industrial map overlay has turned the commercial real estate world upside down.

Turpit, also a member of the Kearny Mesa Planning Group and NAIOP, emphasizes that the city, industrial landowners and office landowners are on the same side of the fence.

“We all want to preserve and protect employment land,” he said.

Rob Merkin, senior vice president with CB Richard Ellis, said the city’s map “down zones” properties. Restricting use to manufacturing will not necessarily attract or retain manufacturers to use space in Kearny Mesa, he says.

“Our economy has changed,” Merkin said. “Our world has changed. We are a high-tech and office marketplace. We are not a manufacturing marketplace.

“And those manufacturers are not going to go here because it is zoned industrial or because the price is less. It is not the price of real estate. It is not the price of labor. It is not the cost of housing. It is the global trend that is dictating why this is happening. Manufacturing is going elsewhere.”

Burnham Real Estate research noted in its most recent industrial market report of San Diego that higher industrial rental rates are causing some locally based manufacturing companies to outsource to Mexico. The shift to outsource manufacturing south of the border is opening space in the market.

Peak Rental Rates

But even with this available space, rental rates are at their all-time highest levels for industrial product, particularly in Kearny Mesa, according to Burnham.

Countywide, asking rents for available industrial space in Kearny Mesa are 85 cents per square foot for light industrial, $1.02 per square foot for multi-tenant and 76 cents for warehouse and distribution space, according to Burnham.

CB Richard Ellis’ midyear report released last month also noted Kearny Mesa to be an attractive choice for developers, investors and tenants of corporate headquarters, industrial and R & D; space. The report indicated that office development is the best use of vacant business park land and potential redevelopment sites.

Developers, investors, landowners and tenants are waiting to see how land can be used in the future under the city’s General Plan update. Gibbs says the Kearny Mesa Planning Group will be submitting recommendations to the city this month.


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