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New City Hall On Manchester’s Waterfront Could Gain Traction

Aired 11/1/12 on KPBS News.

With a new administration and a brighter financial picture, the prospect of moving San Diego city hall to the Navy Broadway complex could be an option.

Congressman Bob Filner and City Councilman Carl DeMaio square off at the KPBS...
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Above: Congressman Bob Filner and City Councilman Carl DeMaio square off at the KPBS mayoral debate on Oct. 1, 2012.

— When the next mayor of San Diego takes office, he’ll be confronted with the problem of housing more than 2,000 city employees who are working either in run-down buildings or in rented offices.

Mayor Jerry Sanders nearly closed a deal on a new city hall two years ago. The $290 million proposal would have replaced the deteriorating, 50-year-old building on C Street. But the city’s dismal finances were still front and center, and faced with putting the issue before the voters, Sanders took it off the table.

At about the same time, behind closed doors, another idea was proposed. It went nowhere, but under a new administration and a brighter financial picture, it could gain traction as the debate over a new city headquarters resurfaces.

KPBS and Investigative Newsource have learned one of the city’s most powerful developers -- local media mogul Doug Manchester -- suggested city hall move to the Navy Broadway complex, a mega waterfront development he’s building downtown. And at least one mayoral candidate suggests it’s an option.

The Navy Broadway complex is considered among the most prime waterfront real estate in the country; an eight-block chunk of land between the Star of India and Seaport Village. Manchester likes to call it San Diego’s front porch.

The development, which has been in the works for more than 20 years, obligates Manchester to build the Navy a new $162 million headquarters, free of charge, in exchange for the right to develop hotels, retail, and more office space at the site. It’s a big deal with a big price tag - more than $1.2 billion.

The development has been mired in litigation for years, but when the bulldozers converge, Manchester will need tenants to make it profitable. Perry Dealy, Manchester’s point man on the project, thinks a government complex on the waterfront could be a winning proposition.

“If we look at the analytics with Civic San Diego, and with the mayors office, and the planning department, I think that there will be some great options that evolve, working together, one of which will be putting city hall on the corner of Pacific and Broadway,” Dealy said.

“The potential would be there, and certainly from a visionary standpoint, it would be off the charts cool,” he said.

Cool factor aside, securing city hall as a tenant could also attract investors to the project, according to several development experts.

Hotelier and U-T San Diego owner Doug Manchester is pictured at The Grand Del...

Above: Hotelier and U-T San Diego owner Doug Manchester is pictured at The Grand Del Mar, Oct. 15, 2012.

Dealy said Manchester has been contemplating the idea for four or five years. The Investigations Desk has learned Manchester met with Sanders April 2009 and asked him to consider moving city operations to his waterfront development.

Phil Rath, the mayor’s former deputy director of policy, remembers the discussion.

“We didn’t have many meetings between Doug and the mayor. In fact, I think that might have been the only one,” he said.

He recalled Manchester pointing out that the city needed to resolve its space needs, and then said “what more appropriate place would there be for the seat of city government than on the waterfront.”

Rath said, “The result of the meeting was ‘Thanks for bringing that to our attention, but we have another plan that is being pursued.’ ”

That plan was to build a new civic center complex on the C Street site. Charles Black was the development consultant the mayor hired to manage the deal.

The city was facing a $37 million bill to repair its aging buildings between 2010 and 2020, Black said. “And that’s not to make those buildings nice or to make them work well. It’s just to keep them minimally habitable.” The deal also would have eliminated the need for overflow city offices in rented space.

Black said the winning proposal, forwarded by West Coast developer Gerding Edlen, would have saved taxpayers $21 million in repairs and rent in the first 10 years, $42 million over 20 years. Black does not believe the city could find a cheaper alternative.

The City Council needed six out of eight votes, a supermajority, to approve the project but decided to put the question to a public vote.

According to people close to the project, the mayor didn’t think enough money could be raised to mount a viable campaign in support of the initiative. So despite supporting the project, he used his veto to pull it from the ballot.

“All the city did … was defer the issue because the fact of the matter is when you look at those buildings where we house our city employees you know its just a temporary solution,” Black said.

Tony Young as San Diego City Council President in 2011.
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Above: Tony Young as San Diego City Council President in 2011.

Council President Tony Young resurrected the problem of space and expense in his New Year’s address in January.

Council will be “deciding on spending million of dollars to patch-up and maintain a perpetually eroding city hall building or instead building a new civic facility,” Young wrote.

The clock is also ticking on the city’s 24 leases, with the seven biggest ones--worth a total of $12.4 million--expiring in the next two years. They include Civic Center Plaza, which costs $4.6 million a year, and 600 B St., where city offices occupy half of the 24-story building for about $4.2 million a year.

It will be up to the new mayor and council to come up with a long term solution.

Councilman Carl DeMaio has financial and political ties to Manchester that date back to 2003, not long after DeMaio arrived in San Diego. Manchester’s U-T San Diego endorsed DeMaio on the front page, and the newspaper owner gave DeMaio’s political action committee $49,000 in the last reporting cycle.

DeMaio strongly supports Manchester’s Navy Broadway development project. It’s part of his Pathway to Prosperity, his 86-page job creation plan.

“DeMaio proposes that the City include as part of its federal legislative outreach an effort to secure additional funding for the project... and a commitment to expedite all reviews of permits for substantial conformance with the development agreement,” he wrote on page 23.

DeMaio also led the opposition against the last proposal to build a new city hall.

“It's the wrong project at the wrong time,” he told KPBS These Days in 2009.

It’s a position he is proud of, and one he maintains.

“No, I do not support a new city hall,” DeMaio said Monday. “I do not think it’s the right priority for San Diego.”

But would he support leasing space for city employees in Manchester’s waterfront project?

On Monday, he said no. On Wednesday, his campaign said maybe.

Both answers were in response to comments KPBS and I-Newsource learned DeMaio made at a meeting of downtown business people on July 24.

Councilman Todd Gloria was there.

Gloria said he and DeMaio were speakers at the board of directors meeting of the Downtown San Diego Partnership. Gloria, whose newly drawn council district includes downtown, said he’s long supported replacing the antiquated city hall, which he believes will save money.

When DeMaio was asked for his position on a new city hall, Gloria said DeMaio acknowledged his opposition to the last project, saying he favored reducing the number of city workers and renegotiating leases.

“He ended his answer by suggesting the city should consider relocating city hall to a future waterfront office building at the Navy Broadway complex,” Gloria said, “and that if it were done we could redevelop the old city hall site, sell it for a mixed use project.”

When the Investigations Desk asked DeMaio about those comments on Monday, he insisted: “That was not what I said. What I said was that we need to be locking in lease rates in our current location.”

On Wednesday, the Investigations Desk fact-checked the statement with DeMaio’s office. Its response, in part: “It is accurate to say that Carl DeMaio has "suggested" that this proposal, along with many others, be studied/considered as possible options.” (emphasis included)

Mayoral candidate and congressman Bob Filner opposes the Navy Broadway development because he says the high-rise buildings in the plan would block access to the bay. He’d rather see parks at the location.

As for a new city hall? Filner says a new building could save money, and despite opposing Manchester’s development, didn’t rule out the waterfront as a possible location.

The Navy Broadway project has been tied up in litigation for years. It cleared a major legal hurdle last month when a federal judge rejected claims the Navy did not address threats of terrorism in its original development plan. The case could be appealed.

Another hurdle is the California Coastal Commission. It contends the original development design, created 20 years ago, is dated and needs to be revised. The Navy and Manchester disagree, creating a “standoff,” according to Mark Delaplaine, a federal consistency supervisor with the commission.

Perhaps the biggest obstacle to the project is the market itself. There is a glut of office space. Recent published reports put the downtown vacancy rate at more than 17 percent.

A government tenant could help sell the project to investors, development experts say, but they caution that renting government offices at top dollar, no matter the view or “cool” factor, would be a tough sell for any elected official.

Manchester himself says he still likes the idea of a waterfront city hall, but contends it’s premature to talk about tenants when he’s still at least two years away from construction. He also says he’s not worried about attracting investors because he already has something better to offer than the city as a tenant.

“There’s not a lot of office space downtown that’s on the waterfront,” he said. “Matter of fact, there’s zero, so we do a hold the key for some incredible opportunity for some of the existing tenants in the downtown market to move to the waterfront.”

This story was written by Lorie Hearn, of Investigative Newsource, and reported by Joanne Faryon, of KPBS, and Brooke Williams, of Investigative Newsource..

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Avatar for user 'laplayaheritage'

laplayaheritage | November 1, 2012 at 8:52 a.m. ― 4 years, 4 months ago

Manchester, DeMaio, the Port of San Diego, CCDC now Civic San Diego, and the City have conspired to hide scientific evidence of active faulting in the Navy Broadway Complex for the last six years.

On the UT San Diego's new article linked above, please note the 2006 rendering the 7 dense high-rise buildings for NBC are shown at the left side of the drawing.

On the right side of the drawing are 2 to 3 new mid-level structures that we never built south of Harbor Drive due to active faulting on liquefiable soils.

Due to constriant from active faulting, the Port had to create the open space Ruocco Park instead of the 2006 planned midrise structures.

However, the Port has refuse to confirm or deny active faulting. And their failure of oversight were approved by the California Coastal Commission.

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Avatar for user 'lparkste'

lparkste | November 1, 2012 at 12:25 p.m. ― 4 years, 4 months ago

Re: soil conditions/ faults on the site

Is this the reason the contractor was drilling down with massive steel beams on the road construction site at Broadway and Pacific? They are currently putting in all the improvements, perhaps someone should check the soils report, since it is adjacent to the Manchester Navy complex.

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Avatar for user 'JohnAGordon'

JohnAGordon | November 1, 2012 at 12:26 p.m. ― 4 years, 4 months ago

So now, let there be no doubt. Carl DeMaio is a lapdog of the old money, conservative interests. Throughout his entire career, Carl has "cozied up" to older conservatives like Newt Gingrich, Grover Norquist and now Pap Doug and John Lynch.

Carl is not a "businessman", he was a federal contractor throughout his career or worked for government associations.

Carl is not a reformer, he is a demigod similar to the disgraced Sen. Charlie McCarty.

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Avatar for user 'laplayaheritage'

laplayaheritage | November 1, 2012 at 12:43 p.m. ― 4 years, 4 months ago

Hi lparkste.

CCDC, now Civic San Diego, the City, Port, and California Coastal Commission voted to ignore the State requirement to confirm or deny active faulting for the construction of the $28 million publically financed North Embarcadero Visionary Plan (NEVP). They got the Court to declare that San Diego has NO Seismic hazards, because the State has not released ANY Seismic Hazard Maps for the full San Diego County. Utilities in these areas are suppose to last 100 years. Instead movement on active faults in liquefiable soils results in broken water and sewer pipes within one to five years. The Coastal Commission also ruled that PVC Pipe is flexible. When in reality PVC is very Rigid and toxic in areas with a shallow water table.

The solution is to Reconvene Caltrans' Coronado Tunnel Technical Advisory Panel (TAP) for engineering recommendations on the waterfront. The Port gave dangerous advice.

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Avatar for user 'Len'

Len | November 1, 2012 at 12:55 p.m. ― 4 years, 4 months ago

JohnAGordon hit the target dead center. Developers have run San Diego for far too long. In a review of the book Armed Madhouse--about political corruption--a political scientist named San Diego the most corrupt city of its size in the U.S.
This from the article says it all:
"Councilman Carl DeMaio has financial and political ties to Manchester that date back to 2003, not long after DeMaio arrived in San Diego. Manchester’s U-T San Diego endorsed DeMaio on the front page, and the newspaper owner gave DeMaio’s political action committee $49,000 in the last reporting cycle.
DeMaio strongly supports Manchester’s Navy Broadway development project." (As my granddaughter might put it, "Duh!")

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Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | November 1, 2012 at 8:22 p.m. ― 4 years, 4 months ago

Agree, John A. Gordon did hit the nail on the head.

Papa Fibber and Carl DeMaio are both dishonest and don't mind lying, cheating, and misleading the public to get what they want.

Manchester blatantly lied about his newspaper circulation and was caught in that lie this very week.

Carl blatantly lied about his meetings with with Manchester and KPBS exposed that a few weeks go.

Do we really want these LIARS controlling our city?



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Avatar for user 'franciscocroquer'

franciscocroquer | November 2, 2012 at 7:01 a.m. ― 4 years, 4 months ago

If they are doing all this before the elections, it is scary to think what they could do if they get elected.

Politicians used to do things for the people, but according to the new definitions, corporations are people too.

It is sad to see how the name of an honest person as Irwin Mark Jacobs, the Qualcomm founder, could be associated from now on to somebody so opposite of his Philanthropical convictions.

What a shame that a bridge is more important than integrity. And let’s hope Jacobs legacy won’t be stained with scandal and corruption.

There is still time to stop endorsing this immorality.

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Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | November 2, 2012 at 10 a.m. ― 4 years, 4 months ago

By the way, this is proof that DeMaio puts developer interests above city finances.

An really good city hall development was proposed in 2008, there was a bid and Gerden Elden of Portland, Ore. presented the winning bid:

The building was designed to actually SAVE the city money over the long-term, as it includes extra space the city would be able to lease to cover costs.

But DeMaio and his ilk blocked this project because it was not a Manchester/local good 'ol boy developer, and instead left San Diego's finances on the road to disaster when the leases are up on the cheap rent they currently get that is projected to go up dramatically when the leases expire.

But now DeMaio suddenly is in FAVOR of a shiny new city hall, this time on the waterfront, because one of his cronies is the developer!?

It's disgusting.

DeMaio is bad news for the city of San Diego.

He is against projects like the main library and improved civic infrastructure that our city really needs, but when one of his good 'ol boy friends in big development wants to molest our coast with poorly designed vanity towers that block off our waterfront, he is all for it.

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Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | November 2, 2012 at 10:11 a.m. ― 4 years, 4 months ago

franciscocroquer, I agree with you 100%.

I have no idea what Mr. Jacobs is thinking, but I am really disappointed because he has done a lot of good for our city but he seems to be flushing his reputation down the toilet by associating himself with the greedy development crooks who don't care who they trample on as long as they get their billion-dollar projects off the ground.

Our city's media has already been hijacked by Mr. Manchester.

Let's not let our city hall get hijacked by him as well through his cronie Mr. DeMaio.

Vot for someone who is not afraid to stand up to "Papa" and his money - Mr. Bob Filner.

I have been impressed in the campaign with the way Mr. Filner is not afraid of Manchester, his money, or his henchmen, he is not afraid of being smeared in Manchester's yellow journalistic "news"paper - - instead he publicly calls out Manchester and the damage he is doing to our community!!

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