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Late last week, I got an e-mail passed along to me that had been sent to some former buyers in the Vantage Pointe project, downtown San Diego’s biggest condo project.
The e-mail invited the buyers — who received their 5 percent deposits back last month and this month — to purchase a unit in the revamped project.
So I was surprised to read this in the e-mail to the buyers:
How Does the Re-Phasing Affect Me?
The Department of Real Estate has given us permission to move forward with our new sales program. As one of our original buyers in the Center Tower, we would like to give you priority before releasing information to the general public. Initially, sales efforts will be focused on the homes in the South Tower and the 2-story townhomes. These homes will be known as CityVibe. The South-facing S plans, now referred to as Seascape, will also be a part of our initial sales program. The homes in the Center Tower will be referred to as Horizons and will be available for lease at this time. Depending upon market conditions, we anticipate commencing sales in the entire North Tower at a later date.
Yesterday, I called Bob Gilmore, district manager of the subdivision section of the Department Real Estate for southern California, to check on the revised plans. I read him the paragraph I posted above.
“I haven’t heard of any of that,” Gilmore said. He said in order for those changes to get the DRE’s permission, the developer would need to file a request to amend its public report, the official record for a residential project. The developer hasn’t yet done that, he said.
The developer’s attorney, Susan Daly, offered an explanation to me last night.
First, Daly emphasized that the changes are still in proposal stage. But she said that the DRE has, in concept, approved the developer’s plan to split the Vantage Pointe project into smaller pieces — some of which will house condos that will be offered for sale, some of which will comprise for-rent apartments and one of which will be a commercial space.
In all, the developers are planning right now to split the project into six mini-projects, she said, though eventually they’re hoping to make the whole project a for-sale project. But plans for those six mini-projects have not yet been submitted to the DRE.
“This whole project is so huge that we have to break it down to make it more feasible,” she said.
Here’s some background:
Vantage Pointe, under development by Canadian company Pointe of View, was originally planned as a 679-condo development comprising the block between 9th and 10th avenues and A and B streets. Many buyers placed deposits on units in 2004 and 2005, only to find in 2009 that they couldn’t get a mortgage because too few buyers had committed to the project. Add the scope of the project to the impossible financing hurdle and place it in the context of a struggling economy, and you can start to see why this building has had trouble. You can read more of the back story in this post.
But with the project due to finish construction soon, that leaves Daly and the developers, trying to figure out how to cut the building into pieces, to make each of the six mini-projects separate legal entities. While there are other projects in downtown that have mixed uses under the same roof — hotels, restaurants, condos — this appears to be a unique route for San Diego developments.
“Yes, this is creative — probably the first of its kind — but we have to be creative and think outside of the box when dealing with this economy,” Daly said.
I asked Daly about the management of the building’s wings or sections. There are three clear towers and facades on the building, though they’re all attached. How would this six-piece project work?
One of the chief functions of the homeowners association of a condo project is to care for common facilities — the roof, the lobby, the windows, the elevators. Daly said she’s trying right now to draft the agreement for how the management of the projects would work. She said the developers will likely propose having a master association that would oversee everything for the project, but the details of that are still being worked out.
She said she hopes the former buyers, and interested observers of the project’s success, recognizes the amount of money that the developers have invested in the project.
“They’re not going to walk away,” she said. “Our client basically had to figure out a way to make it through this, so that the buyers will be able to get financing.”
Daly said the DRE has made its primary goal clear — to protect the buyer and make sure none is left holding the bag, adding that the developer will be proposing these plans with that in mind.