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Wednesday, Sep 28, 2022

Cities Would Lose Some Luster Without Redevelopment Agencies

Downtown San Diego was awash in tattoo parlors and sailor’s bars in 1984. “The area was nothing but abandoned warehouses and drug dealers on the streets. If you parked your car, you were fearful it wouldn’t be there when you got back,” said Jeff Graham, vice president of redevelopment for the city’s redevelopment agency, Centre City Development Corp.

The opening of the Horton Plaza shopping center in 1985, San Diego’s first major redevelopment project, was a tipping point. “Up until then, hardly anyone came here unless they worked for the government,” Graham said.

Oceanside and Chula Vista also grappled with inner-city decay. “People forget what used to be in downtown Oceanside — until they see the old historic photos with railroad switching yards, oil refineries and packing plants just a few blocks from the beach,” said City of Oceanside Redevelopment Manager Kathy Baker.

Relocating the switching yards from Oceanside to Marine Corps Base Camp Pendleton in 1985 freed up 25 acres of coastal land for redevelopment and linked downtown to the waterfront.

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The Oceanside Transit Center, home to Amtrak, the Coaster, Metrolink and Greyhound Lines Inc. bus transportation, was completed in 1983.

In South Bay the urban redevelopment process, which began in 1976, “has leveraged public and private investment,” said the City of Chula Vista’s Redevelopment Manager Eric Crockett. He reckons that public money used to remove the junk yards and auto-wrecking yards from the bay front made projects such as the Chula Vista Marina and the Chula Vista Nature Center possible.

Revitalizing Blighted Areas

Under California law dating back to 1945, a city or county government can form a redevelopment agency to revitalize economically and socially blighted areas. The redevelopment agency can sell bonds to help finance improvements, and the city or county government has the legal power of eminent domain (the taking of private property for public use). When property values rise, the redevelopment agency can use the increased property tax, or tax increment, to repay bonds and other debt. At least 20 percent of this revenue must be earmarked for increasing, improving and preserving affordable housing.

In the case of Horton Plaza, CCDC used its funds and legal clout to assemble the 6½-city-block site. “In downtown areas this can be a very expensive and time-consuming process,” said Graham, particularly if one or more property owners refuse to sell at any price. Streets were closed off to provide sufficient space for the complex. The city subsequently sold the site to retail mall developer Ernest W. Hahn for a below-market price. Hahn’s company paid for the mall’s construction while the CCDC partially funded the project’s parking structure.

When it opened, Horton Plaza was in a tough neighborhood. “The mall was designed to be very introverted — like a fortress, so that people felt safe and didn’t have to worry about crime,” said Graham. But times and neighborhoods change, and Westfield Group, which currently owns the 740,000-square-foot complex, is contemplating a redesign. “They’re looking at opening up the mall and wrapping it with retail to make it more integrated with the city streets,” said Graham.

During the past 35 years, according to CCDC, downtown redevelopment projects — including Horton Plaza, the San Diego Convention Center, the Gaslamp Quarter and Petco Park — have generated $1.54 billion in public-sector investment and $12.8 billion in private-sector investment. Every dollar the city invested in the public realm has been matched by 8.4 private dollars invested in private development downtown. Roughly 35,000 people now live downtown, and the work force is approximately 75,000.

In Chula Vista, Crockett credits redevelopment agency and public development money with relocating BFGoodrich storage and equipment-cleaning facilities away from the bay front, which opened up future development opportunities.

“It is debatable whether the Chula Vista Center would have been able to survive in the 1990s without the agency bringing stores,” he said, “and we wouldn’t have the Chula Vista auto park, which produced an additional $2 million in annual sales tax revenue for the city.”

By building a parking structure at the already-failing Chula Vista Center, the agency was able to attract Mervyn’s and a theater chain to the complex. The agency has also created 1,117 affordable housing units.

Affordable Housing a Priority

Chula Vista is in dire need of affordable housing, said Crockett. During the next five years, the city’s redevelopment agency will leverage $5 million of its funds —already in the bank — for constructing 200 affordable housing units in Western Chula Vista. So far, the agency has leveraged $20 million in affordable housing money for $166 million in projects.

Synergy is the key to redevelopment, said Baker. When the city of San Diego committed dollars to building a downtown library, a number of other donors came forward.

“Property owners say, ‘If the city is going to invest a couple of million dollars, maybe I should redo my storefront,’ ” said Baker. If public money had not been invested in Oceanside’s redevelopment, then private investors such as Wyndham Hotels and Resorts LLC and Cohn Restaurant Group Inc. would not have ventured into the downtown neighborhood, she believes. Oceanside’s gross tax increment is $11 million, $2.2 million of which goes to the development district’s affordable housing fund.

Tough economic times and Gov. Jerry Brown’s intentions to abolish redevelopment agencies do not bode well for Oceanside’s redevelopment plans. “A large beach resort, which urban planners in Oceanside have been trying to get built for the last three decades, finally gained Coastal Commission approval — and then the economy hit the skids,” said Baker.

She reckons that cutting redevelopment agency funding and redevelopment projects might not be cost-effective in the long run. “As the tax base goes up you can better afford to meet your obligation and pay back the bonds,” said Baker. “It’s like a student loan. As your income goes up, you can make those payments, but you struggle for a while during those early years.”

An Uncertain Future

Eliminating redevelopment agencies would be hurtful to downtown San Diego’s future, said Graham. In 2006, the City Council adopted a community plan anticipating high-density population growth in the urban core and the addition of 1 million people in San Diego overall by 2050.

Downtown could alleviate the impact on surrounding historic communities such as Mission Hills, Uptown and Golden Hill that favor low growth.

“Downtown people love density,” said Graham. “They have actually recommended denial of projects because they are not high enough or big enough.”

Accommodating an estimated 90,000 downtown dwellers — including families with children — and 160,000 workers by 2030 requires more parks, fire stations, open space and rehabilitation of old buildings. “We haven’t had a new fire station in downtown San Diego since 1974 — even though all these new high-rises have popped up,” said Graham.


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