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Developers sought for two downtown mixed-use parcels

A Jan. 22 deadline has been set by Civic San Diego for developers to submit qualifications with regards to two blocks for major mixed-use developments in the East Village.

Civic San Diego, on behalf of the city of San Diego, is seeking one or more developers for the two high-profile properties near Petco Park.

One property is a 55,000-square-foot parcel bounded by Market Street and Seventh, Eighth and Island avenues (the Seventh and Market site). The property is across Island Avenue from where Cisterra Development is building a 300,000-square-foot office tower for Sempra Energy (NYSE: SRE).

The second site (Park and Market) is a 52,030-square-foot property on the block bounded by Park Boulevard, 11th Avenue, and G and Market streets in the center of East Village.

The development on each site must provide a minimum of 200 rental or for-sale residential units with an affordable housing component of 10 to 15 percent depending on income.

Developers on the Seventh and Market site have the option of boosting the employment-generating figure up to 150,000 square feet if they want to get extra points -- an option that isn't available on the Park and Market property.

The developers for both will also be required to set aside 10 percent of their sites for a park or plaza.

The selection process will be divided into two phases. In Phase I, Civic San Diego will identify a shortlist, anticipated to be no more than three development teams for each site based on the team’s qualifications, a written narrative of the team’s vision for the development of each site, and the team’s ability to envision the desired Downtown Community Plan objectives.

In Phase II, the selected teams will be asked to submit fully developed project concepts, preliminary design drawings and financing strategies before a final selection is made.

Both sites have their challenges. The 55,000-square-foot Seventh and Market property is adjacent to the 5,000-square-foot Clermont single-room occupancy hotel that is designated as a historical landmark pertinent to black history here. The Clermont is under a separate ownership and isn't part of the project. Still, any developer will have to account for the fact that the recently renovated SRO is part of the block.

What lies beneath the mixed-use site and the SRO at Seventh and Market may be another cause for concern. Previous environmental studies indicate soil and groundwater are contaminated with petroleum from former gas station operations on the site. The soil also likely has elevated levels of metals. In 2010, remediation activities were completed on portion of the site, but not the entirety.

"Additional remediation work likely would be required for the remainder of the site as part of a future redevelopment effort …, " CivicSD writes. "CivicSD does not anticipate that a development team will need to conduct further site investigations in order to prepare an RFQ response."

Currently, the Seventh and Market site is a public parking lot.

As is the case with Seventh & Market, the Park and Market property has undergone substantial remediation due to leaking underground petroleum tanks.

Park and Market has its own historical landmark that, unlike the Clermont hotel, will have to be incorporated within the project itself.

The Remmen Building is on the northeast corner of Park and Market and is expected to be rehabilitated and retained as part of any development. The building, which was also recently restored, is an apartment property that dates back to 1907.

While ground floor retail is expected in each of these projects, the Park and Market developer will have the option of bonus points if it is able to line up a 15,000-square-foot or larger "destination retailer" as part of that plan.

In the meantime, approximately 28,500 square feet at Park and Market is proposed to be used under a short-term lease for temporary outdoor activities for public, private and corporate events "in an effort to activate the site until construction begins on the proposed development project."

While the selection date for the developer or developers has yet to be set, Feb. 12 has been set as the selection date for the semifinalist teams.

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