The Morning Report
Get the news and information you need to take on the day.
Mayor Kevin Faulconer is about to start taking an active role in developing southeastern San Diego.
The mayor’s office agreed to partner with the Jacobs Center for Neighborhood Innovation in the foundation’s plan to remake the area surrounding Market Creek Plaza into a pedestrian and transit-friendly urban village.
The Jacobs Center is already drawing up a blueprint to turn the almost 60 acres of vacant or underdeveloped land it purchased during the 2000s into a model of urban revitalization, with homes at a mix of income levels and stores and neighborhood amenities surrounding the Euclid Avenue trolley station. In April, it will release the outline of its final vision, and hopes to implement it within eight to 10 years.
Now, Faulconer wants to use his authority over city staff to make it cheaper, easier and more attractive for private developers to invest in the historically under-invested community.
The agreement between the mayor’s office and the Jacobs Center has two primary components.
The first is for projects within the Jacobs Center’s neighborhood plan to get special treatment from city planners checking to see if they fit within city and state development regulations.
Developers in the area will have a dedicated staffer in the mayor’s office who will make sure plans are reviewed as quickly as possible. That staffer will also coach developers to make sure their plans are ready-to-go right away.
“This is a priority for the mayor,” said Mike Hansen, Faulconer’s point-man on land-use issues. “It’s a nonprofit organization doing a great deal of development in an underdeveloped area, so we think it warrants having their concerns raised to this level.”
The other major piece of the agreement commits mayoral staff to working with the Jacobs Center to find new money that can be used to improve things like streets and sidewalks in the area.
That part is already bearing fruit. In late October, the state department of transportation gave the city a $4 million grant to make the area more bike and pedestrian friendly. Together, the city and Jacobs Center will try to identify other, similar opportunities in the future.
Altogether, the hope is that getting special treatment in getting city approval and improving the neighborhood’s infrastructure will be enough to attract private investment an area that’s traditionally been ignored, unless there was a direct government subsidy to build something there.
“We expect private investment, but the public partnership will be critical,” said Reginald Jones, CEO of the Jacobs Center. “We’ve been very fortunate to form with Mayor Faulconer a philanthropic partnership that will aid this community, given the historic lack of investment here.”
Part of the investment Jones is looking for could come from Civic San Diego, a city-owned nonprofit corporation focused on redevelopment. That group is in the process of launching an investment fund from private financial institutions that it would use to finance projects near transit hubs. The Jacobs Center’s project area could see some of that money.
The area has already benefitted from public investment as well. At the end of the year, the city approved a new set of development restrictions for the community that will increase the number of homes that can be built on the land surrounding the Euclid Avenue Trolley station.
In addition to increasing what developers can build in the area, the new restrictions are themselves intended to speed up the time it takes to get new projects approved. That’s also expected to increase developer interest in the area.
New development restrictions for southeastern San Diego passed quickly. They were written and approved in just three years. For comparison, planners have been working on an update of North Park’s restrictions for six years, and still aren’t finished.
An Uncertain Model
It isn’t clear how much Faulconer’s pledge to give the neighborhood development plan preferential treatment will result in major changes.
The agreement between the mayor’s office and the Jacobs Center doesn’t stipulate any specific results.
It says that the mayor’s office will hold developers’ hands to get their projects approved faster, but it doesn’t, for instance, commit the city to approving projects in the area 10 percent faster than other similar projects. Nor does it say the city will help secure, say, $2 million per year in new public money to neighborhood infrastructure projects.
Perhaps the agreement doesn’t include such promises because the city knows it can’t be sure it can deliver on them – or that it isn’t comfortable taking the actions required to make good on such promises. And if you dislike such heavy-handed public involvement in private development, maybe you’d prefer to keep the arrangement vague.
But Erik Bruvold, president of the National University System Institute for Policy Research, said he isn’t sure the commitment to streamline approvals in the area can change developer decisions that much.
That’s because so many of the required steps developers that take the most time aren’t negotiable. The city might not be able to save much time just by making sure projects don’t languish in City Hall bureaucracy.
“There are some things that a new czar for certain projects can’t change,” he said.
There’s a group of city staffers in the city’s economic development department that does similar work for small businesses dealing with the city. Bruvold, who used to work for the San Diego Economic Development Corp. and for Mayor Jerry Sanders in economic development, said in his experience, staff was always most valuable prepping businesses for what they needed to do, not in fast-tracking things within the city.
The agreement is reminiscent, Bruvold said, of a toned-down version of the public-private partnership that led to the nine-block City Heights Urban Village. There, public agencies clustered the development of new projects like a new police station, school, library and recreation center, while private developers – with the help of redevelopment money – built housing and retail projects.
“I don’t know that it works as an economic development strategy,” Bruvold said. “It clearly created a nice urban amenity in City Heights, but City Heights was and remains a low-income neighborhood.”
Picking Winners and Losers
There’s other reason for hesitation.
Donald Cohen, executive director of In the Public Interest, a policy and advocacy group that’s generally wary of public-private partnerships, said he would need to see the final agreement before saying whether it was a good deal. The agreement won’t be finalized until April, when the Jacobs Center rolls out its vision for the neighborhood.
However, he said cities commonly make the same mistake: they let the promise of private money, often a small amount of money, lead them to spend public money on things they wouldn’t have invested in otherwise.
“It’s a typical tension,” Cohen said. “We urge policy makers to make sure decisions are guided by public priorities, not what private investors believe could generate a return.”
That doesn’t appear to have happened so far. The $4 million grant the city secured to make transportation improvements in the area scored well on the state’s rubric used to determine how warranted the public expenditure was.
The other issue, Cohen said, is that the government is selecting one neighborhood over other ones as the target of new development. Logan Heights, for instance, which also just got a new set of development restrictions and also has been historically neglected by private development, might wonder why it doesn’t warrant special attention from the mayor’s office.
Bruvold doesn’t see much threat of such moral hazard. So far, the city is looking to bringing in new money, not shifting any from one area to another.
And, he said, it’s not all that uncommon for the city to make certain areas more attractive for developers.
“The city plays winners and losers all the time,” Bruvold said. “That’s nothing new in terms of making choices on where the city benefits on choosing where areas are more attractive for investment.”