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Suggests moratorium

Grand jury faults rules complexity for Sunroad building debacle

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As leasing gets under way on the Sunroad Centrum I building in Kearny Mesa, the San Diego County Grand Jury says a moratorium should be instituted on the project's two buildings.

The grand jury report said the moratorium should be in force at least until a density transfer audit is completed. The audit would determine what height and density would be permitted in the remaining two buildings.

Sunroad began construction on the first building of the 25-acre project in October 2005 and topped out in the summer of 2006 (photo).

The Federal Aviation Administration ordered the 12-story, 180-foot building lowered by 20 feet last year due its proximity to Montgomery Field airport.

The building now has 273,000 square feet instead of the original 300,000.

Originally conceived as a three-building, 1 million-square-foot project with two free-standing parking structures, Sunroad Centrum would now have no more than 873,000 square feet at buildout, according to a Cushman & Wakefield 2008 Web site. Cushman & Wakefield is handling the project leasing.

The remaining two buildings would be about 300,000 square feet each and would be slightly taller than 10 stories, according to the Web site.

Eric Vann, a Cushman & Wakefield associate director who is also the son of Sunroad Enterprises principal Rick Vann, said while no leases have been signed in the building, there are numerous out for signature.

"We are very pleased with the activity. We are showing the property three or four times a week," Vann said.

Given the sluggish economy, it could be a while before the other buildings come out of the ground if Sunroad Enterprises, which could not be reached for comment here, builds them at all.

One problem at the Sunroad site, according to the report was there were three sometimes-conflicting manuals not to mention zoning differences, governing the development of the property.

The report said under a 1997 City Council-approved manual, the site would have allowed three-story buildings with a height of no more than 45 feet instead of the much larger project.

"The zoning (by contrast) did not contain any height limit but included a Floor Area Ratio (FAR) requirement. Rather than use an FAR, the manual called for density transfers ..." the report continued.

Major revisions to the manual that governed different parts of the Spectrum's 244-acre master plan, -- Lennar Partners is the master developer of the former General Dynamics (NYSE: GD) property in Kearny Mesa -- were made once in 2000 and in 2002.

While not spelling each of them out, the report stated that these changes were fundamentally different than the 1997 document; however, the older manual continues to be used today.

Increased residential density was one of the changes, but the report stated the uncertainty goes far beyond the number of housing units.

"It is clear that the 2002 manual is not the sole direct descendent of the 1997 manual. This rather bizarre outcome should be sorted out so there is only one manual covering the whole tract or that each of the current manuals (and any others in the future) be labeled to indicate which section of the tract is covered," according to the report.

With the 1997 manual dictating that commercial/retail development seeming to dictate the Sunroad buildings should be limited to three stories, the developer amended its application converting the project from commercial/retail to commercial/mixed-use, which has no inherent height limit.

"DSD officials told us that since both uses were permitted in the zoning code, the developer had the right to make the change without the approval process," the report continued.

That was when Sunroad began building its project in the middle of the decade, only to be stopped by the FAA and City Attorney Michael Aguirre.

Given this history, the report said the Development Services Department should have better controlled the processing, and required a separate environmental impact report for the Sunroad development.

Finally, the Grand Jury report deferred to last year's SawyerKnoll report on the city that stated there needs to be better liaison between the city and the FAA. That notes the report, is being done.

"We are thinking a lot more about this now," said Kelly Broughton, Development Services director. "We go out and get the FAA blessing even when we are talking about small buildings, now."

As for the differing manuals and zoning regulations, Broughton said it is also in his best interest that the process is as clear and streamlined as possible.

"We have taken 23 distinct processes and distilled them down to five. I think that's pretty good," Broughton said.

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