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ULI discussion looks at East Village boom

The transition from a California with property tax increment-funded redevelopment to one without it is still very “chaotic,” according to speakers at a recent closed panel discussion hosted by the Urban Land Institute.

Staged in a part of town transformed through the last decade by redevelopment, the discussion focused on the East Village’s boom, from high-rise residential development to new businesses and a new atmosphere.

Commenting on the discussion after its conclusion, panel moderator Dan Johnson, vice president of SCS Engineers, didn't discount anyone's ability to adjust, but said that redevelopment has taken on a new meaning. And figuring out how to do things without redevelopment as it once was is a challenge.

“The consensus from the panel was that — fast forward 15 years, and it’s still a brilliant project,” Johnson said of the development that stemmed all over East Village, with the construction of Petco Park as its catalyst.

There’s been talk from some in the public that the growth in East Village would have happened in time, even without the ballpark, Johnson said.

The panelists — which included Dennis Cruzan, of Cruzan Monroe; Brad Richter, of Civic San Diego; Richard Opper, of Opper & Varco LLP; and Charles Black, an integral player in the Petco Park development — generally agreed that while some development could have happened, it wouldn’t have had the dramatic effects seen from making Petco Park the centerpiece of the deal, Johnson said.

Black, a former president and COO of the San Diego Padres who once served as the team’s legal counsel when it was pitching a new ballpark to the city, said that from the $474 million investment in Petco Park — $301 million of which was public money — there has been around $1.5 billion in private investment through the neighborhood.

But the investment wasn’t just in dollars, Opper said, adding, “That changes the character of the city.”

Petco Park’s development became the cornerstone of one of the most successful redevelopment projects in the nation, Black said, and a catalyst for more than $5 billion of construction and operation expenditures through the last 10 years.

“Generally the structure of this project … was to make the development of the ballpark as much about urban planning goals — and urban planning outcomes — as it was about baseball,” Black said. “And baseball, unlike other sports, celebrates not only the sport but the places where it’s played.”

San Diego was receptive to the discussions of integrating a new ballpark into a grander urban planning scheme, he said.

Larry Lucchino, who was the CEO of the Padres at the time, "got redevelopment," Black added.

But now that the city has seen a return on investment in East Village, it has to figure something out now that redevelopment — or as Johnson referred to it, reinvestment — is left to the private sector.

The factor that’s going to drive the maturation of downtown San Diego, Black said, is going to be residential development.

“I also try to work on office development at times,” he said. “Office development is dead down here. And the only hope for office development here is for substantial residential development, because that will drive the need for offices.”

Opper said that cause-and-effect can be seen today in the Marina District, where Centre City Development Corp. — now Civic San Diego — completed one of its first large-scale efforts after the redevelopment of Horton Plaza.

Cruzan emphasized during the discussion the need to make the East Village attractive to the Generation Y-class business developers, Johnson said.

“There’s a vibe associated around the East Village and what’s happening with the ballpark,” Johnson said, “and it wouldn’t have happened but for all of this.”

One of the reasons Nat Bosa has committed so much capital in San Diego is the city’s commitment to the construction of the new downtown library, Black said. The other was its commitment to develop a vibrant ballpark district.

“Those two things, in very close proximity,” Black said. “Look at what’s happened. Look at the law school that’s been built one block up.”

Adjusting to the new world of redevelopment is chaos, Johnson and Opper said.

"But I think out of chaos, there’s an awful lot of very smart people that are trying to be creative,” Johnson said.

The need to redevelop blighted neighborhoods hasn’t gone away, he added, saying the same of affordable housing and economic development.

Opper said that while there is interest in the private sector to take over the job and even invest just as much in it, the private sector doesn’t have the same tools that sanctioned redevelopment provided, including the power of eminent domain.

“The project would not have happened if we had not had that power of eminent domain,” Opper said.

When redevelopment agencies were killed, so was the Polanco Redevelopment Act, Opper added, which helped redevelopment agencies move forward on brownfield properties by limiting their liability.

“One of the reasons why the private sector wouldn’t pursue properties that were problematic … is because there was always a better way to do it," Black said. "The better way to do it was to use the power of the government. And now, those governmental powers aren’t available. And the private sector’s gonna figure out another way to do it.

“The private sector is always innovative, and when the government provides a path, that kind of shuts off innovation," he added. "So I think we’re looking at a period where you’re going to see significant innovation from the private sector.”

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