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Developers agree that urban density is the current wave of the future

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Developer and architect Paul Buss says the city's failure to "embrace" the City of Villages plan with its density provisions two years ago was nearly as critical a mistake as the ongoing pension fiasco threatening to throw the municipality into bankruptcy.

Buss, chief development officer with OliverMcMillan, made this pronouncement Tuesday during an Urban Land Institute meeting at the University Club. OliverMcMillan specializes in urban mixed-use projects such as Uptown District and Village Hillcrest, both in Hillcrest.

The goal of the City of Villages effort is to bring together adequate housing, retail, employment uses and public transportation so the long commutes that clog freeways and pollute air are significantly reduced. Buss said the plan was gutted when the density measures were removed.

"The failure of our leadership to embrace the City of Villages plan as it was is almost as serious as the city's financial condition," said Buss. "The plan would not only upgrade our neighborhoods, we would get the housing supply we need, and we would not be developing things haphazardly and poorly as we are now."

Buss said that while everything begins with a problem, therein is a solution. For example, when OliverMcMillan was told that the community would not accept the exterior loading docks for the Ralphs grocery store, the developer had them enclosed.

"The problem is not mixing uses. It's how you do it," Buss said.

When asked if the City of Villages plan is workable without the high densities that were excised in 2003, Gail Goldberg, San Diego planning director, said it is possible in theory. However, she added that it also is important to educate the public to welcome density.

According to Buss, Goldberg and Douglas Wilson, this can be done if projects are done in a sensitive manner that conforms to a community's character. Wilson is the developer of the Symphony Towers mixed-use complex downtown and the ParkLofts condominium in the East Village.

Barry McComic, a developer at the forefront of the creation of Rancho Bernardo 35 years ago, said while there's no question density wasn't desired a generation ago, things are beginning to change.

Wilson, who also is developing The Mark condominium in the East Village, is banking on this change and is committed to develop at least one other project at an unidentified site in the city of San Diego, as well as projects in Chula Vista and Orange County.

Wilson isn't alone in looking outside of San Diego proper. The city of Oceanside has been developing urban high-density projects in its downtown for years, and National City has made an effort to revitalize itself with urban mixed-use projects.

McComic may have been the master of the master-planned community, but the developer says they are a nearly extinct species, particularly in this county.

"The future of San Diego is in the urban environment," McComic said.

That may be, but density, for better or for worse, continues to scare surrounding residents as it did when McComic developed his first 17,000 units in Rancho Bernardo under the banner of Avco Community Builders in the 1970s. When he wanted to develop an additional 3,900 units in another part of the same community, he was forced to settle for 900.

Downtown San Diego is undeniable evidence of the strength of urban development and thousands more units are in the works. But developers seemed to agree that skyrocketing material costs could put the kibosh on this urban renewal.

"The cost of construction is sky high. If your cost is, say, $200, you need to sell that unit for $400 if you are going to get your money back...." McComic said. "It becomes a matter of what people are willing to pay. Can you sell a high-rise condominium in Chula Vista for $500 a square foot?"

McComic said an insatiable demand for Chinese construction products and dwindling supplies will keep those prices high in San Diego.

He said the forward commitments on lumber today are so askew that it is possible to make more selling a forward commitment on lumber to China than to sell the actual commodity domestically.

Developing a high-rise condominium in Chula Vista may not happen soon, but Wilson said the city has warmly received his plans for a new condominium complex.

"That city has a phenomenally cohesive plan, and I was actually thanked for bringing such a quality plan to the city," Wilson said.

Each of the developers has had to deal with significant community opposition, however.

"If you're in a community that doesn't have the political will to support your project, you have to look at communities where you could get that support," McComic said.

Sometimes projects begin one way and end up going in a totally different direction. Goldberg asked the panelists to comment on what happened with the Ballpark Village project, which initially specified that all affordable housing would be onsite. Now, after what was deemed a "secret" meeting between developers Lennar Corp. (NYSE: LEN) and JMI Realty with labor leaders, environmentalists, community leaders and others, it seems that some of the affordable housing component will be developed offsite on land owned by St. Vincent de Paul in another part of the East Village. The meeting angered the Centre City Development Corp. whose officials felt previous work had been circumvented.

"I'm on the East Village Association board," said Wilson, "and I've never understood a covert process."

The developers have argued that the proposed changes are needed to make Ballpark Village financially viable.

In another vein, McComic emphasized that no dreams small or large can be realized without an adequate water supply. As per a measure in 2002 authored by State Sen. Sheila Kuehl, D-Santa Monica, housing projects with 500 or more units are now required to show that they have at least a 20-year water supply.

"A golf course uses enough water for 4,000 houses," McComic said.

Looking back to the days when he considered Rancho Bernardo a distant outpost, McComic commented on how much things have changed yet have stayed the same.

"When I came to San Diego as a young practicing lawyer in August 1968, I went to Rancho Bernardo on Highway 395. I thought I was going to the ends of the earth," he said. "I stayed at a little 50-room hotel that had black angus cattle outside. That hotel became the Rancho Bernardo Inn."

One thing that hasn't changed, however, is what to do about an international airport with a single runway that will be maxed out in about a decade.

McComic argued that the port and the San Diego Regional Airport Authority have wasted millions of dollars on studies, and are no closer to a solution than when they started.

"As long as you're alive, that airport's not going to move," he said.

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