Recalling Kevin Faulconer’s Failed Real Estate Deals
A huge redevelopment deal remaking the area surrounding San Diego’s sports arena into an entertainment district with housing, retail and public parks collapsed yesterday.
There is no small amount of irony in that the news broke as his gubernatorial campaign sent out a press release boasting of his "proven leadership as Mayor of San Diego."
An all-new sports arena along with 5 acres of public parks, 2,100 housing units and 590,000 square feet of retail space proposed by Brookfield Properties won’t be happening for the simple reason that former Mayor Kevin Faulconer’s administration failed to do their homework.
Rather than admit the deal was on shaky ground, they chose to proceed, hoping for a new interpretation of the state’s Surplus Land Act, which dictates how localities should dispose of properties. The Metropolitan Transit System – including the four San Diego Council members who sit on its board – openly discussed and agreed to abide by the changes to state law.
Beyond questions about the legality of any deal, there was a significant amount of political capital expended on a ballot measure to lift building height restrictions, and the lack of any promise to include affordable housing in the redevelopment.
It’s fortunate for San Diego taxpayers that Faulconer’s administration never got around to signing any contracts. Otherwise we’d be looking at litigation not unlike what the city is going through with the failed attempt to acquire 101 Ash Street as a space for city employees.
Looking back at the Faulconer years, it would seem as though real estate dealings were the administration’s achilles heel. Here are few of his greatest hits:
Flip flopping on plans for expanding the Convention Center (where an option on a key piece of adjoining real estate lapsed)
Asbestos problems for city employees at 1010 Second Avenue
A functionally useless skydiving building bought as a homeless navigation center
Kearny Mesa industrial property leased in 2017 for about $80,000 a month to use as a maintenance yard for the city’s fire trucks which couldn’t accommodate those vehicles.
It’s not like the past administration should have been surprised.
From Voice of San Diego (which deserves a ton of credit for staying on top of these issues):
The city has long grappled with real estate challenges. They were documented in a blockbuster 2006 Union-Tribune story revealing the city’s inability to accurately track its various properties and in a 2014 outside consultant’s report that also called for the department to better manage its properties and better communicate with other city departments.
The real estate guy hired in 2014 to address these issues left under a cloud. The guy who replaced him got the boot over the 101 Ash Street deal.
There are more “deals” deserving of a second look. Given that the Sports Arena/Midway District proposal was touted by the former Mayor as an example of how he got things done, perhaps the bidding process for the property formerly occupied by Qualcomm Stadium and the Tailgate lot near Petco Park deserve more scrutiny.
Meanwhile, San Diego’s going to try again to find a private partner to redevelop the area, which could end up sitting in the shadow of buildings under consideration for a redo of the SPAWAR site on Pacific Highway.
Mayor Todd Gloria says he plans to restart the process:
“This is yet another example of a flawed real estate deal from the previous administration where San Diegans are now left with little to show for a significant investment of time and resources,” Mayor Gloria wrote in a Thursday statement. “I am committed to work quickly to restart this process in compliance with the Surplus Land Act. It is critical that we do not squander this once-in-a-generation opportunity to build a modern arena through a process that prioritizes the affordable housing our region desperately needs.”
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