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The Doriana Apartments in southeastern San Diego are among the apartment buildings being acquired by the Blackstone Group in a pending sale. / Photo by Adriana Heldiz

Last week’s announcement that the Conrad Prebys Foundation, a charitable organization, would be selling its massive real estate portfolio to a New York-based private equity firm is raising alarms.

As Lisa Halverstadt and Jesse Marx report, housing advocates are worried that the more than $1 billion sale of roughly 5,800 units to the Blackstone Group and its partners will take the affordable housing crisis throughout San Diego County from bad to worse.

That’s based in part on criticisms of the private equity firm in recent years. A pair of independent experts working on behalf of the United Nations in 2019 concluded that Blackstone’s turning of homes into financial instruments to be traded globally was making housing more expensive and displacing lower-income tenants.

Blackstone has vowed to invest more than $100 million in the properties while continuing to keep most of the apartments affordable based on a certain percentage of the area median income.

The foundation acknowledged that Blackstone wasn’t the only investor interested in its portfolio. Others said they would have been interested in potentially buying some of the apartments had they known about the deadline for bids much earlier. The stage was set for the sale in August 2019 but some weren’t made aware until a couple months ago.

The planned sale “highlights both the vulnerability of naturally affordable housing and the lack of requirements for owners of those units to notify local governments of plans to unload properties. That reality complicates outside efforts — whether by local governments or philanthropists — to quickly step in,” Halverstadt and Marx write. 

San Diego to Crack Down on Code-Violating Outdoor Dining Structures

With lifted mask mandates on the horizon and San Diegans toeing their way into restaurants and bars again, the San Diego City Council decided Tuesday to allow outdoor dining structures in parking spaces and lots to continue for another year even if COVID-19 public health orders go away completely. 

But that doesn’t mean many of them are good to stay as is. Though the city doled out hundreds of temporary permits to businesses allowing the takeover of immediate parking spaces outside their buildings, now begins a crackdown on anyone who set up more than just tables, chairs and umbrellas. 

These temporary outdoor business operation permits, called TOBOs in city hall-speak, didn’t allow businesses to build anything on the public right of way (the street or sidewalk). So any elaborate, wooden patios replete with strung lights, heaters and canopies likely have to go or come down. (There is one caveat: The city engineer did sign-off on a platform that could be built flush with the sidewalk. But businesses have to submit a separate permit for that.)

TOBOs will now be extended until July 2022. But businesses have until July 13 of this year to fix all their code violations or face fines or a revocation of their permit entirely. 

Little Italy restaurants, for one, built enormously elaborate structures that cost some businesses thousands of dollars, working off a design they thought was OK’d by the city. But none of those structures meets state building and fire codes either, city staffers told Voice of San Diego.

Still, as promised, city staff are working on a path toward permanence for any business that wants to expand their business into the street. The program, most unfortunately dubbed Spaces as Places, doesn’t have any details yet. Those are TBD until fall 2021, according to the city’s press release. 

There’s an online survey on the Spaces as Places website, which appears to be gathering feedback about how much people enjoy using the outdoor dining. 

Mayor Releases Revised Budget

San Diego Mayor Todd Gloria on Tuesday released his revised $4.6 billion budget for fiscal year 2022. It aims, he said in a statement, to lay the groundwork “for an equitable recovery” and get the city back on track “after years of budget mismanagement that resulted in structural budget deficits.” Burn!

The city had projected a $154 million budget deficit earlier this year before the city got word it would receive more than $300 million in federal American Rescue Act funds. Gloria has proposed using about 45 percent of those funds to help balance the budget for the year beginning in July.

Notably, and if approved by the City Council, libraries would eventually be re-opened for service seven days a week. That marks a shift from Gloria’s initial budget proposal, which called for library service to be cut to a Tuesday through Saturday schedule, a pitch that riled the city’s largest labor union and community groups.

Interestingly, the revised budget also includes money for the implementation of a surveillance ordinance that was approved late last year by the City Council but is still undergoing review by city staff and labor groups. 

Allegations and Legal Threats in the Craft Beer World

Some of the world’s most lauded brewers and breweries were accused last week of creating a toxic work culture, ranging from sexist comments to predatory behavior. The allegations, some of which came out of San Diego, appeared on the Instagram account of a Massachusetts-based production manager and were highlighted in a report over the weekend by Beth Demmon, a local freelance journalist.

Now, Good Beer Hunting reports that the decision to post the anonymous stories on social media without verifying them first raises serious legal questions. One microbrewery in Anaheim has threatened to sue for defamation. The outcome of any case would depend on a number of factors, including whether the posts are protected under federal law and the people accused are public or private figures. 

Later on Tuesday, the Modern Times founder announced he’s stepping down as CEO, apologized and said the company had “parted ways with an employee that was named in an online report last week.”

In Other News

The Morning Report was written by Jesse Marx, Maya Srikrishnan and MacKenzie Elmer, and edited by Sara Libby.

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