City Council To Vote On Plan To Turn Horton Plaza Into Tech Offices
Speaker 1: 00:00 Is it time for Horton Plaza to become the campus at Horton San Diego City Council members. Today we'll consider a plan to convert the faded downtown shopping mall into a mixed use office campus for tech companies. The new developers have pledged to $275 million makeover of this site, but they need the city councils. Okay. To move forward. Journey me as Jennifer ran grove who covers growth and development for the San Diego Union Tribune. Jennifer, welcome to the program. Hi Maureen. Now the new owners, Stockdale capital partners, bought the property from Westfield last summer. Can you remind us what the new owners of Horton Plaza wanting to Speaker 2: 00:41 do with it? So they want to turn the Horton Plaza Mall into a office campus primarily for tech companies. And so the idea would be to what's called in developer parlance, adaptively reuse the buildings, but they would strip it down at two. It's not some bolts and kind of rebuild around their, their office vision and have pretty much everything on the site be office except for the ground floor, which would be retail and in their vision, retail is food. And Beverage, some fitness boutiques and, and maybe some shops, but, but mostly food and beverage. Speaker 1: 01:18 What is Stockdale need the, okay. The city council to move forward? Speaker 2: 01:22 Well, it's very complicated. So when they bought the property, they inherited what's called a owner participation agreement. And that agreement in various shapes and sizes dates back to 1981. But the reason that it's there is because the city's sold the land where Horton Plaza is today to Ernie Han who developed the shopping mom and in that document where restrictions on how that that land could be used in part because the city sold the land for $1 million in it, spend about $33 million acquiring the buildings on that site. And so they wanted to make sure that there was primarily we tell on that site so that they could generate in a separate, through a separate agreement, um, income from, from rental rates with the tenants at Horton Plaza. And so the agreement has changed hands over the, uh, over the time and now Stockdale is coming in and their concept is very light on retail. But in order to change the documents and, and get the retailers striction um, removed, they have to get approval by city council. Speaker 1: 02:34 So according to negotiations that have already been underway with the city staff, what could the city get out of the deal in terms of security and density at the side? Speaker 2: 02:45 So it's, it's nuanced but uh, Keyser Marston associates, um, they put together a report that tries to estimate the value of this deed restriction changed. So that's what we're talking about here. Um, we're talking about changing the restriction from 600,000 square feet of retail to 300,000 square feet of retail with provisions that allow the developer to reduce retail to 200,000 square feet and even zero depending on density. So that value Keyser Marston and placed at 6.7 $6 million. And so essentially that's a loss to the city through whatever council votes today could be replaced by Stockdale in the agreement that the council will be voting on is essentially through Stockdale paint, paying for additional security at Horton Plaza Park. And also through, by extending the lease of the lyceum theater, which is in the basement there at Horton Plaza, they pay a dollar rent per year and they have a longterm lease in effect. But if Stockdale, um, extends that elite lease, then there'll be given credit and there's this very complex formula. But essentially the number, the magic number that stock deals trying to get to with security and extending the lyceum lease is the 6.7 $6 million. Speaker 1: 04:02 No. From the experts you've spoken to, what do they say about what kind of impact the campus at Horton project might have on the rest of the area and the rest of downtown? Speaker 2: 04:13 Well, there are, you know, there are a number of people who believe that the impact to downtown will be significant. So right now we have a mostly dead retail space. Um, and urban planners agree that dead space attracts negative, you know, negative use. Right? And so, and adaptively reusing that there is, you know, not only the potential to just make that area nice, but as far as, you know, bringing in a high caliber of company that maybe doesn't already have a presence in San Diego. Um, if one big tech whale, if you will have one of those comes to San Diego signs a lease at the campus, they'll Horton, then the thinking is more will follow. And so there will be this trickle effect of where we have, you know, very high tech, very celebrated companies establishing a presence in downtown and somewhat changing the character and, and uh, creating jobs for workers who already lived downtown, which in theory could affect, um, traffic for, for the better. And, and kind of, so a lot of downtown leaders talk about this reverse commute where people work downtown and they commute to the Golden Triangle. Will this would effectively help to reduce that? Speaker 1: 05:27 There must be obstacles of facing this project. What are some of those? Speaker 2: 05:32 No, that, you know, anything's really going to get in the way of city councils vote today, but there are going to be vocal opponents at the meaning and that includes Jimbos and Macy's, which our tenants at the mall right now, they are still in their spaces and they don't oppose redevelopment. However, both feel that they've been left in the dark as to the developers planning here. And there are some, um, contentious issues, uh, between the tenants and the developer. And those will play out for the public today. Beyond that, I think some of the historical preservation is here in town still have concerns that they might voice through, um, the saver heritage organization, which will probably have representative to speak today. And, and their concerns are about the buildings. Um, so that group is in contact with the developer and they are talking. However, there's, there's concerns that maybe some of it's postmodern features will disappear if too much changes in, in this redevelopment. Speaker 2: 06:34 Do you have a sense how the council members are feeling about the proposal? Well, I think the biggest indicator is the, um, Edi are so the economic development and in our governmental relations committee, they voted unanimously about a month ago to send this on to council for consideration. And so I would say that we should look to that, um, as an indicator of what's going to happen today. That would be my best guess is that most likely this is going to pass and it's going to pass, maybe not unanimously about with most council members voting strongly in favor of it. I've been speaking with San Diego Union Tribune reporter Jennifer van Grove, and Jennifer, thank you so much. Thank you.