Friday, June 25, 2010
GLORIA PENNER (Host): And this time we’re going to look at the City of San Diego. It faces a budget deficit of $72 million but you really wouldn’t know it because this week the city council moved from general conversation to consideration—with a price tag—for a new city hall, safety upgrades to railroad crossings downtown and a go-ahead to determine whether there’s still a need for the Centre City Development Corporation. Is downtown still riddled with blight? So, Ricky, let’s start with a new city hall for San Diego. Why is the mayor so vigorously supporting the idea?
RICKY YOUNG (Government Editor, San Diego Union-Tribune): Well, he continues to couch it in terms of we’ll do it if it makes sense and if it saves money as opposed to making grand visionary statements. I think there remains a recognition at the existing 13-story city hall that the public is not really wild about what goes on in there and that there’s not a great deal of trust that they need a new building. So the mayor did something smart this week, which is downscale it, and so instead of a 34-story building we’re looking at a 19-story building. Instead of $432 million, we’re look at $293 million. And, you know, it could be a way to make an unpalatable thing more palatable sort of like, you may recall, the Sunroad building in Kearny Mesa. They took a few stories off and then it became more acceptable to the public and so we’ll see that with city hall maybe.
PENNER: But the interesting thing is that the mayor has been negotiating with the developer, talking with the developer, for the last 8 months, according to your newspaper, the Union-Tribune. So what I’m curious about is first you negotiate with the developer and then you take it to the city council? I mean, how was this developer selected, Barbara?
BARBARA BRY (Co-Publisher/Opinion Editor, SDNN.com): Well, I’m not as intimately involved with that process but, I mean, there was a process to select the developer. I think in the end there were two finalists, Gerdling-Edlen (sic) and Hines, and, you know, Gerdling-Edlen (sic) was selected. I think you have to negotiate the deal and then take the deal to the city council. You’ve got to give the city council something tangible to look at. And so I think that was totally appropriate.
PENNER: Okay, so now there is something tangible to look at. It comes with a $293 million price tag. Tony, how can the city treasury fund a project when there isn’t enough money to keep the city from falling apart from broken streets and sewers, to house the homeless, or even to balance its budget without worrying about a deficit?
TONY PERRY (San Diego Bureau Chief, Los Angeles Times): Well, as grandma used to say, anybody can make payments. That’s why people have automobiles way beyond their means. We’ll make payments. We’ll float bonds. And we’ll get some income based on some commercial development and we’ll go on down the road. What I look at and I sort of wince when I see, oh, we’re going to build it smaller and cheaper, I think to myself, how very San Diegan. That’s how we got the current city hall, the current downtown library and the sports arena. We built them small, we built them cheap, and they were sort of outmoded and drab the day they opened. Now maybe that’s not going to happen here but I see what Jerry Sanders is doing as very much in the think small San Diego vein.
PENNER: And that’s bad at this point?
PERRY: I think it’s bad at this point. If this thinking had been extant generations ago, we wouldn’t have Balboa Park, we wouldn’t have Mission Bay Park. It’s in the teeth of bad times you have to think and be confident that those times are not going to last forever.
PENNER: So when you are in hard times you should think rather, how can I put it, think more generously?
PENNER: Oh, that’s…
PENNER: That is Tony Terry’s – Tony Perry’s take on our situation.
PERRY: Look at the Golden Gate Bridge.
PENNER: Well, okay. I want to look to our callers and see if you agree with him. So here San Diego is obviously having financial difficulties and the projects that we’re talking about would require public funding. I mean, even if you float bonds, you have to pay off the debt on the bonds and that comes out of our treasury. So is it better to think big in hard times? Or is it better to tone down your thinking and maybe say let’s wait to build this stuff until things look better as though the economy is really going to pick up. Our number is 1-888-895-5727, 895-KPBS. Ricky.
YOUNG: Yeah, the – One thing to keep in mind about the cost is the whole underpinning here is that it will save money over paying rent in offices they’re now renting downtown and over maintaining the current city hall. Now the mayor’s office has gone to great pains to make sure that those numbers pan out and they show $24 million in savings over the next 10 years. Out of that, they’re promising $1 million will somehow help the streets and infrastructure and things people are worried about.
PERRY: This is also a good time to float a large project. The contractors are hungry.
PERRY: They’ll work and they’ll work hard at an awfully good price. You wait until the economy is good and they’re building left, right and center, the cost of that building at the same size is going to go up.
BRY: Yeah, and…
YOUNG: I – I just…
YOUNG: I’m sorry. I just wanted to finish. About the numbers, the – there has been a lot of questions raised about whether the leasing savings are realistic and whether the maintenance is really necessary. San Diego, as you know, has a long history of deferring maintenance. So suddenly they’re going to do all this maintenance on city hall when you’re comparing it to buying a new one. So…
PENNER: Carl DeMaio is opposed to the project. He says you can renegotiate your leases and you can even build – or move city offices to places that are empty at the moment. That way you save money and in this age of technology you all don’t have to be in one big building. How do you respond to that, Barbara?
BRY: Well, first of all, I think Carl DeMaio’s favorite word is no. Reminds me of my children when they were two years old, no-no-no-no-no. Now, having said that, I think it’s always good to ask questions to make sure that this project pencils out, and given, as Tony said, that construction costs are probably lower than they’re going to be, you know, they’re very low right now and also interest rates are low, so this is a great time – and the city has a good credit rating. So I want to look at the numbers to make sure that the interest that they’re going to pay on the bonds is, you know, lower than the lease money they’re going to spend, you know, and, you know, you also then do – you are going to have to do something to city hall. It is about to fall down and I certainly wouldn’t want to be in city hall if there’s an earthquake in town of any magnitude. So – And I think moving to different office buildings around town isn’t really feasible and I think having a city hall chamber that seats 400 people so the community can really come and participate in government is useful and I don’t know any – To retrofit a downtown office building to have something like that, I think, would be very costly. So, I mean, I still want to do my own examination and analysis of the numbers but I think it is a good deal for the City of San Diego, and I think Jerry Sanders is going to, you know, leave a legacy, a good one, for this community.
PENNER: Aha, is that the key here? I mean, he’s also helping to fundraise for the new library.
YOUNG: There is an amazing amount of activity downtown. I did want to make one note of caution since Barbara is so gung-ho for this. You know, one of the things they did was lower the price to this $293 million. Now this is a city that also this week approved the quiet zone, Gloria, that you mentioned, which is this idea of making some safety upgrades so that the trains coming through downtown don’t have to blow their horns and the people in the hotels and the condos can sleep. That project in 2005 was supposed to cost $3.5 million and upon approval this week it’s costing $17.9 million. So this is not necessarily a city with a record of keeping to low cost estimates.
PENNER: And also, didn’t the city council approve $500,000 to go out to see whether there is still blight in downtown San Diego?
PERRY: That’s an incredible amount, and for fear of being cast as the big spender, let me play the other side of the street. I find it really odd that the Centre City Development Corporation started a generation ago with a defined area and a defined time limit and a defined amount of money on the theory that we’ll pump a lot of money into downtown and then those areas around it, the wonders of the private sector, will take over and, boom, we’ll have a great city on our hands. Now we’re a generation later and we find, well, I guess the private sector really hasn’t done that outside of the redevelopment area as much as we’d like. Let’s keep doing it, let’s keep subsidizing it, one theory goes, for ad infinitum, I suppose. But if you were to hold that cap to its original level, you could pump, by the figure I read, $300 million a year into the starving San Diego general fund—$300 million a year into a what, a $1.1 billion. You could pump up that budget by a third. Now people say, yeah, but if you don’t get those additional projects you’ll rob yourself of additional money down the road. But, again, I thought that downtown redevelopment was supposed to be finite and then the miracle of the private sector would take over. Apparently that miracle has not occurred.
PENNER: Okay, we’ve just about run out of time. I’m going to try to take one call but, George, you’re going to have to make it really brief. Go ahead, George.
GEORGE (Caller): I’m calling in to support the point of thinking confidently and spending in tough times with the confidence that it’ll turn around and – and it’s the best time to be spending that type of money because the costs are lower and contractors are hurting. So it’s a great idea, it’s a great concept to be confident in times when the spending needs to be made as much as possible.
PENNER: Okay, thank you, George. Ricky, you’re going to get the last word but I want to pose that to you. How much of a boon will this be to downtown business interests and the building industry and, potentially, the Chargers that want a new stadium downtown?
YOUNG: This may all be fine but I want to point to a lesser publicized thing moving forward, that $700,000, because there’s always a lot of money going around, and that is to put these Portland Porta-Potties downtown, which I think would go a great ways toward making it a less unattractive place because of the horrible homeless population or, excuse me, the horrible homeless problem down there, and it might clean up the streets a little bit.
PENNER: All right but I’m going back to you on this Ricky because you didn’t answer my question which is how much of a boon will this be to downtown business interests and the building industry?
YOUNG: Well, they’re certainly pushing for all these projects, which through incremental step after incremental step are definitely moving forward and, you know, I assume if they want it, it’ll be good for them.
PENNER: Okay, and you heard Tony, I was going to say haranguing but he wasn’t doing that, he was holding forth on not raising the cap for the redevelopment agency. What would that mean to the Chargers stadium potential downtown?
YOUNG: Well, they went through great pains this week to say that this study had nothing to do with the Chargers but this thing took off immediately when they started to want to look at a stadium downtown.
YOUNG: So that, I think, is what’s really driving it.
PENNER: Well, I thank you very much. That’s Ricky Young, San Diego Union-Tribune. And thank you, Barbara Bry from SDNN.com, and also Tony Perry from the Los Angeles Times. Thanks to our callers and our listeners. This is the Editors Roundtable. I’m Gloria Penner.