Tuesday, Feb. 20, 2007 | After acquiring swaths of land in one of the few undeveloped locales near urban San Diego, several prominent builders are leading an aggressive campaign to allow for homes in Otay Mesa’s industrial hub. If approved by the city, the plan would produce a significant boon for the speculating developers.
Known as the Otay Mesa Planning Coalition, the federation of major developers is leading an ongoing charge to reshape the border community’s industrial hub so that it can accommodate the homes they are currently barred from building there. The coalition has spent upwards of $5 million on the analysis to be used by the city in the planning process, and, in exchange, has been guaranteed to have its projects serve as the focal points for planning scenarios that will reach the City Council as soon as November.
If successful, the developers, many of whom are prolific political donors, will have played an instrumental role in overturning the regulatory hurdles that currently prevent them from building the nearly 9,500 homes they want to construct on hundreds of acres that serve as drab scenery for the thousands of trucks that pass to and from Mexico every day.
A core group of businesses — customs brokers, cross-border truckers and manufacturers — that are hoping to preserve the mesa as an industrial bastion have cried foul, arguing that by hiring and choosing the consultants, the coalition is buying the plan. City officials defend their independent review of data the coalition-hired consultants submit, but lament the criticism.
“Yes, that’s a strange position to be in,” said Theresa Millette, a senior planner with the city, of the developers’ hiring of the consultants. “In the future, we would like to control the contracts.”
The debate is playing out in the ongoing discussion over updating Otay Mesa’s community plan, the blueprint that governs the scale and balance of development in the area. With several lobbyists and a self-described grassroots group it funds in tow, the coalition, whose roster includes big-name builders such as the Corky McMillin Cos. and Pardee Homes, has been prodding officials to rethink the sparsely developed, 9,300-acre San Diego neighborhood for nearly a decade.
The planning process will define the future of Otay Mesa. Homebuilders want it to become San Diego’s next residential enclave. But industrialists say it is uniquely poised to capitalize on trade with Mexico.
“There is a lot of money involved here,” said trade consultant Steve Zisser, past president of the Otay Mesa Chamber of Commerce. “Basically, if they are being allowed to get their properties rezoned, it will be a big windfall. It’s greed.”
Allies of the coalition stress that Otay Mesa’s dilapidated or missing infrastructure cannot be improved under the current community plan. Further, they see an opportunity to develop housing that is affordable and near jobsites and future public transit lines, a strategy that San Diego articulated in its “City of Villages” urban planning strategy.
“There’s way too much industrial and it doesn’t work for a variety of reasons,” said Tom Tomlinson, a McMillin vice president. “The city does not have time or the money to do it themselves. … We’re landowners, we’re stakeholders, and so we’ll work with the city to make this thing work.”
Tipping the Balance
Located in the most southeasterly stretch of San Diego, Otay Mesa boasts as much acreage as El Cajon. Residential subdivisions line the community’s western portion, while business parks, truck yards and manufacturers dot the central and eastern areas, closer to the Otay Mesa Port of Entry.
The coalition is pitching scenarios that would transform land currently planned for industrial uses into residential developments, including areas near Brown Field municipal airport and two future freeways that will accommodate around-the-clock trucking. The business community frets that the proposed homes would encroach on industrial operations at a time when business is primed to gain steam, mirroring the worries found in other corners of the city where residential development backs up to jobsites. Compounding their worry, business boosters say, is the risk that companies that can only perform work along the U.S.-Mexico divide will lose out.
Otay Mesa was home to another fiery debate over the balance of homes and industry when, in 2002, nearby residents rallied to gut the proposed conversion of Brown Field municipal airport into a full-fledged cargo terminal. Pepper Coffey, a Realtor who spearheaded the anti-Brown Field movement, now chairs the Otay Mesa Improvement Alliance, a self-described grassroots group that is funded by the homebuilders’ coalition.
With only a dwindling number of open-space areas left near the urbanized San Diego region, the dispute over the community’s future is being fueled by the increased demands for housing and industrial land. The competing demands play out every morning when rambunctious, fume-spouting 18-wheelers vie for position on Interstate 905 with students who are driving — and walking — to San Ysidro High School.
“If you look at the long run, there is a need for more housing, but there also is a shortage of land for industrial use,” University of San Diego economist Alan Gin said. “The South Bay is really the only place where there is enough land to be used for either purpose, which is probably why there is this battle.”
The clash spilled over into the recent elections at the Otay Mesa Chamber of Commerce, when several of the homebuilder coalition’s members and allies also tried to capture seats on the business group’s board. Members of the chamber said the coalition’s candidates campaigned aggressively to get on the board, but were unsuccessful.
But Coffey, a pro-coalition candidate for the chamber board, said the business group was persistent in shutting them out because the organization has already made up its mind.
“From the first planning meeting I ever attended, the line was drawn in the dirt: Industrial was separate from residential, and never the two shall meet,” Coffey said. “I think industrial has gone whole hog, and I tend to favor more balanced communities.”
The venture is promising for the residential developers, whose speculation on the conversion of industrial and commercial land into homes would generate significant profits. While experts say estimating a dollar amount for the windfall is complicated, the prospects for profit are no secret.
“It’s a large profit, but that’s the main motivation for anyone, including the chamber and the trucking industry,” said Paola Avila, executive director for the grassroots alliance, which shares its mailing address with the Tierrasanta offices of coalition lobbyists.
Pushing their Plans
After purchasing plots of land throughout the last 10 years, homebuilders began seeking individual land-use changes for their specific housing proposals. After shrugging off their individual pleas, former city Planning Director Gail Goldberg mandated that requests be made as part of a comprehensive update to the area’s community plan, which was initially crafted in 1981.
But a few years into the planning process, funding for the update ran dry as a result of the city’s fiscal problems. The seven developers — McMillin, Centex, D.R. Horton, Pardee Homes, Sunroad Enterprises, Integral Partners and Murphy Development — agreed in 2004 to pay for the community plan’s completion. In exchange, Goldberg and Development Services Director Gary Halbert promised that at least one of the developers’ proposals would have an audience before the City Council and agreed to begin reviewing their building proposals.
City officials and the developers insist that there was no promise that any proposal would be approved. “(Goldberg) told us, ‘This doesn’t guarantee you a damn thing.’ She said that over and over,” Tomlinson said.
Since then, the city and the consultants have produced three proposals for the plan. Two include all of the coalition’s projects, with one adding the capacity for even more housing on existing industrial lands. Those scenarios could shift the makeup of Otay Mesa’s acreage from 15 percent residential to between 18 percent and 20 percent at the expense of industrial zones. A third scenario allows for mildly more homebuilding, but confines residential areas to Otay Mesa’s west side where less industry exists.
Business leaders criticize the consultants’ studies — which pertain to Otay Mesa’s geology, traffic, biology and other aspects government officials want analyzed — as having produced biased information that bolsters the coalition’s argument. They claim, for example, that the analysis overestimates the availability industrial land in Otay Mesa, allowing the homebuilders to claim that plenty of potential jobsites would remain under the coalition’s proposal. Additionally, they claim the reports have understated the area’s truck traffic — a potential health and safety hazard for residents.
“It always leans in their favor,” Zisser said. “It’s not neutral data at all.”
Bill Anderson, the city’s planning chief, said his staff has corrected information found in the reports, but dismisses the allegations of bias. The errors have not necessarily always favored the developers, said Anderson, who was an outside consultant to the community plan before arriving at the city.
“Frankly, I think the homebuilders have been good at keeping their distance from the city’s analysis and the consultants,” Anderson said. He said the coalition’s various attorneys and policy advocates who are registered as coalition lobbyists are involved in the ongoing work, but have no editorial control over city-produced reports.
Anderson contends the cash-strapped government should continue to seek private funding for community plan updates, but on the condition that the city would independently hire the consultants with the developer’s money.
David Nielsen, a lobbyist for the coalition, emphasized that the city has been heavily involved in its analysis and will have final say on all decisions. “For anything with a city seal on it, the city has been heavily involved. What makes this work is the quality of the city’s supervision.”
Change of Scenery Sought
Nielsen said the expectations of the Otay Mesa Chamber of Commerce, not the consultants’ data, are wrong. The city cannot stand patiently for business to bloom as hunks of land lay idle and the demand for infrastructure and housing soars, Nielsen said. “It’s hardly the economic engine we thought we’d have in the ’70s,” he said.
Nielsen added that a shortage of residential land is exacerbated by the city’s preservation of western Otay Mesa’s vernal pools in 1997, a move that eliminated the possible construction of about 6,000 housing units that were proposed in the community’ original design.
Business leaders in Otay Mesa said they want to offer a counterproposal or conduct their own analyses, but can’t afford to. Instead, they speak anecdotally about their own experience or borrow from others’ studies.
The upcoming opening of another border crossing, they said, will allow for a freer flow of trucks that now suffer delays and cause what the San Diego Association of Government says is a $131 million loss to the local economy. The truck traffic will only expand because of fluctuation in the maquiladora industry and the possibility dredging of a seaport near Enseñada, they predict.
Other dynamics will contribute to curtailing land availability, business officials said. A proposal to construct a cross-border terminal to Tijuana’s Rodriguez Field International Airport could also drum up demand for hotels and car rentals. In addition, they note that manufacturers not related to the border trade, such as shipbuilder Nassco, are finding the wide-open spaces they seek in Otay Mesa.
But the coalition’s backers claim other opportunities are lost under the existing setup. Avila said the only way to provide new infrastructure — sidewalks along major streets, parks and sewer lines — for the area is to build residential units, which generate higher developer fees for those improvements. Additionally, it is less expensive to convert moderately priced industrial land into the affordable housing the city government has been desperately trying to encourage, Avila said.
Ben Hueso, the city councilman for Otay Mesa, said he is undecided on the proposals, but agreed that new infrastructure cannot be financed by industrial development alone.
As for the homebuilders’ role in funding the plan, Hueso said he is aware of critics’ concerns and is proposing that fees from future development, regardless of the type, would be used to reimburse the coalition for its expenses.
“I want to make it very clear that their investment is an effort to help the process along, but not to own the process,” Hueso said. “There shouldn’t be hard feelings either way. But this is not about just a few privileged, wealthy members of the community.”