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Urban neighborhoods grow in popularity

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Imagine living in a neighborhood where everything you need is within a short walk out your front door. Just such places -- urban villages -- are being built throughout San Diego and the nation. The goal is to cluster housing, employment, shopping, entertainment, recreation and transit to reduce reliance on cars.

Located in the Ballpark District of downtown San Diego, Park Terrace is a mixed-use residential condominium development comprising 211 residential units, 20,000 square feet of commercial lease space, and a two-level subterranean parking garage with 280 spaces. It is slated for completion in the fall of 2005.

Downtown San Diego is one of the examples of a civic effort that created a revitalized downtown that blends office, residential, entertainment and shopping. People are trading their suburban comfort for the urban dream of an active 24-hour downtown residence.

"What characterized the 20th century for San Diego was suburbanization," said Gary H. London, a San Diego-based real estate economist and president of The London Group Realty Advisors Inc. "What characterizes this century is urbanization."

Fehlman LaBarre Architecture and Planning principal Michael LaBarre agreed.

"Throughout California, our firm has partnered with communities as well as developers to redevelop and revitalize our downtowns," he said.

LaBarre was the principal architect for the Uptown District in Hillcrest in 1990. When the concept of an urban village was conceived, this project was at the forefront of urban redevelopment and it provided the catalyst for the dramatic revitalization of the Hillcrest neighborhood.

Mark Fehlman sees a similar cycle of redeveloping communities.

"Whether in San Diego or San Mateo, each process has started within community leaders with vision," he said. "A vision and an urban plan are laid out. A catalyst such as an entertainment and shopping complex, ballpark or something as simple as new sidewalks and street trees is funded. During the next phase, the market place takes over and redevelops and revitalizes a community."

In San Diego, we are reaping the benefits of a 20-year planning process where visionary planning has been led by the Center City Development Corp. and catalysts such as Horton Plaza, the San Diego Convention Center, and the Ballpark are in place. Residential development is in high gear.

"People are choosing to be urban rather than suburban," London said. "They think about Europe or the East Coast, where the best restaurants and museums are, and they're trying to replicate those lifestyles. In San Diego, we're now starting to achieve the critical density milestones that will enable us to get there."

London, Fehlman, and LaBarre attribute the move toward urban lifestyles to a convergence of several factors: demographic change, land shortage, anti-sprawl sentiment and government incentives for high-density development.

A shift in lifestyle needs for the country's largest generation -- the baby boomer -- is one factor. Many of the same people who moved to the suburbs decades ago to raise their families are now empty nesters and ready to move on. Their needs have changed and this is reflected in their housing choices.

"There's a tremendous population that's coming of age," LaBarre said. "They no longer need a house to raise 2.5 children and they want a different lifestyle. They are active and want to be close to the activities they enjoy such as opera, theater and dining."

At the other end of the spectrum are the baby boomers' young children. National research has shown that they are waiting longer to settle down and start families.

"Those young professionals often can't afford, or don't yet want, the single-family homes suburbia has to offer," London said.

Simultaneously, builders are responding to a shortage of buildable land for new development as well as government incentives that favor urban infill and redevelopment.

"We've basically run out of land to develop," London said. "So we don't have any choice but to build where the government wants us to go. Fortunately, the market has responded."

And cities are waking up to the enormous financial benefits of urban revitalization.

"For the past 20 years, California law has allowed cities to keep the tax revenue generated by new projects in dedicated redevelopment districts," said Sherm Harmer, president of Urban Housing Partners Inc.

Harmer explained that cities can only keep 13 percent to 17 percent of property tax revenue generated by a new development outside of a redevelopment district. However, a city can retain 100 percent of the revenue generated by new development located inside such a district.

"We have a slogan: 'Redevelopment Pays'," he said. "It pays big dividends for cities, and it's a way for local governments to keep the new revenue they generate instead of giving it to the state."

Municipalities may further capitalize on redevelopment with careful planning. By bonding new property tax revenue at a scale of 10 to 1, a city can raise enough revenue to make major infrastructure improvements or add attractions.

"Let's say you have 25 projects that are each worth $100 million, and from it you get $25 million worth of tax increment. You could get $250 million worth of bonds," Harmer explained. "So now you see how we can afford a new ballpark at $450 million and a library that costs $156 million."

He added that San Diego and San Jose are the most aggressive about taking advantage of state law regarding redevelopment. San Diego's CCDC started a residential redevelopment program in the late 1990s that assisted builders by helping put money into land acquisition.

"There have been more than 10,000 new homes started in downtown since 1999," Harmer said. "Cities throughout the state are pursuing similar goals: In the past 14 years, the number of redevelopment agencies has tripled."

"We'll see a tidal wave of redevelopment in California," LaBarre added. "We're at the forefront of it."

Fehlman pointed out that the change already is notable. When the firm began working on urban redevelopment, he said it created urban planning strategies for various communities such as North Park, La Jolla and downtown. Then the firm moved to urban entertainment and catalyst projects throughout the western United States. Finally, it has designed numerous residential projects throughout downtown.

"For downtown San Diego, the redevelopment process has been very successful in creating a positive sense of environment," he said. "People see that they can have a quality of life downtown that is probably much richer than living in the suburbs."

For more information, visit Fehlman LaBarre Architecture and Planning's Web site, www.fehlmanlabarre.com.

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