Developers faced a deadline of Friday at 2 p.m. to submit proposals for redeveloping five blocks of city-owned property in downtown San Diego.
The City Council in April declared the properties — which include the City Administration Building, Golden Hall, the Civic Theatre and 101 Ash St. — "surplus land." That kicked off a process laid out in state law of seeking developers to build a mix of market-rate and affordable housing.
Former city COO Jay Goldstone, who is advising Mayor Todd Gloria on the redevelopment, said he had not seen a huge amount of interest in the project. He suggested that high interest rates could be putting a damper on redevelopment ideas. Downtown also currently has a surplus of office space. Office space can help make large developments economically feasible, but only when there is demand in the market for that space.
"I think people are maybe waiting a little bit on the sidelines to see what happens here," Goldstone said. "We may get proposals for one or two of the blocks. But, as I've stated in the past, I would be very pleasantly surprised if we get any proposals for all five blocks."
Another explanation could be a requirement in state law that any housing development on the land set aside 25% of the homes as low-income housing. The subsidy required to keep those rents below market rate could prevent a project from penciling out.
Goldstone said he would publicly announce the bids received by the city — if any — after he briefed the mayor on Tuesday.
Josh Callery-Coyne, vice president of policy and civic engagement at the nonprofit Downtown San Diego Partnership, said the large size of the development area presented big opportunities for housing, green space, and arts and culture attractions.
"We're excited to see the world-class amenities that this space deserves," Callery-Coyne said. "Being patient is challenging at times in construction when you see a blank canvas. But this is all part of the process. And we're excited. As the downtown market will show you, there's a lot of opportunity for investment."
