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Monday, April 24, 2006 | For more than 15 years the city of San Diego’s Redevelopment Agency, the College area Community Planning Board and San Diego State University Foundation (SDSUF) worked on a redevelopment plan to organize the land use around the university grouping similar uses in the same area.

It was an excellent example of cooperation between the community and the university. SDSU President Tom Day recognized that the university staff was not the team to negotiate with the community because of past differences between the university and community. He assigned the task to the senior management of SDSUF. With the community, they agreed to a plan to redevelop south of the campus between 55th and College Ave.

Both President Day and current President Stephen Weber were informed about the progress of the plan and the developments that SDSUF would undertake. Weber also had a committee of the university’s senior management that also reviewed the progress.

I served on the SDSUF Board for over 12 years and also chaired the Finance Committee that oversaw the financial and real estate aspects of SDSUF. The SDSUF completed two elements of the redevelopment plan: Piedra del Sol an apartment project and Fraternity Row. Both developments provide cash flow to SDSUF. The cornerstone of the redevelopment effort was The Paseo, a Jerde-designed mixed-use development including offices for SDSUF, student housing and more than 200,000 square feet of retail space that included 60,000 square feet of theatres that were to be used by the university in the morning as lecture halls.

The development was selected as a model for “smart growth” for San Diego’s City of Villages and recognized by the Urban Land Institute as an example of good planning.

People ask what happened?

SDSUF was informed by the California State University (CSU) Chancellor that the financing for a CSU auxiliary/foundation had to go through the CSU financing mechanism. For The Paseo project, the SDSUF had put together a non-recourse financing where the lender only takes the real estate as security. But it was rejected by the CSU system for reasons I never understood.

SDSUF worked with the CSU and the university on the financing through the State Revenue Bond (SRB) program and sought optional financing through conventional financing. SDSUF was able to secure a commitment to finance The Paseo with CitiBank, the nation’s largest bank. It was considered by the lender and CSU to be an economically viable development. The progress slowed for more than one year as we wrestled with the financing issue and in the spring of 2005, President Weber announced that he was moving the management of The Paseo project to the university’s Financial Services Department.

The Paseo project as we know it has been discarded and as the university says some “Paseo-like” development will go forward. It is not hard to envision what that will look like.

So, my university steps to the threshold of doing something significant that would have mended fences with the community and received positive national attention for the town-and-gown cooperation only to step back to the same old boring development of the campus.

San Diego in general continues to not reach to be the best; Ernie Hahn showed what you can do with good development with Horton Plaza. The Paseo development on the south side of the campus would have cleaned up an eyesore and led the continued improvement of the College area. CSU and SDSU, institutions owned by the taxpayers, should not ignore the legitimate requests of their owners, the taxpayers. Whether a public institution is a state or local government, we, the residents and taxpayers, expect the managers of our public institutions to work together to solve mutual interests.

They are our dollars that the managers of our public institutions handle and they should be accountable. That is one reason that I resigned from the SDSUF Board, as it was apparent that the university administrative staff did not understand the financial impact to the SDSUF when it shut down the redevelopment program. In my opinion, they will waste close to $20 million of the SDSUF reserves due to their lack of knowledge about financial matters.

In summary, The Paseo, as we know it, is gone. The community should gear up to battle the university on its expansion plans. Should SDSU grow to 45,000 to 50,000 students?

SDSU/CSU says they will not mitigate the impact on the surrounding communities of the expansion of the university. Our state legislators need to address this issue as the potential impact on the community is serious.

Tom Carter is general partner of Carter Reese & Associates and can be reached at

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