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The historic Woolworth building in North Park has been sitting vacant on a prime piece of real estate along University Avenue for years, despite the city of San Diego’s attempts to renovate it. But the city is ready to try — once again — to redevelop the property.
It’s still a long way from going anywhere.
The city on Friday listed the Woolworth building among the properties it considers “surplus land,” a required first step for any redevelopment. Developers now have 60 days to express interest in renovating it and would need to reserve 25 percent of the homes in the project for low-income residents if they jump on it.
That’s because of the Surplus Land Act, a decades-old law that the California Legislature amended in 2019 to give affordable housing developers a leg up on redeveloping public land, in hopes of alleviating the housing crisis.
Previously, the Woolworth building was exempt from the Surplus Land Act’s affordable housing requirement because the city had a deal in place with a development group called North Park Gateway LLC that was nearly a decade old, before the law was changed.
When the developer backed away from the project in December 2021, so did the deal’s grandfathered status.
Originally selected in 2011, North Park Gateway LLC walked away from the project late last year, arguing it no longer penciled out. One of the principals, Lyda Cohen, said the company had already spent hundreds of thousands of dollars on consultants, historical asset management and more.
“I am a small investor,” she said. “I am not going to [go] broke on this project.”
One of the initial and major causes for the delay was California’s dismantling of redevelopment agencies across the state shortly before the city struck a deal with North Park Gateway LLC. Those agencies were created in the mid-20th Century as a means of helping local governments eliminate blight in commercial and residential districts by using growth in property tax revenue to subsidize continued improvements in the area.
After redevelopment ended, San Diego had a handful of projects tied up somewhere in the process, but without the certainty of the subsidy they had been counting on when they inked the agreement.
“I gave up thinking anything was actually ever really going to happen with the Woolworth building a long time ago,” said Vicki Granowitz, former chair of the North Park Planning Committee. “Especially after redevelopment fell apart.”
Still, Jerry McCormick, a city spokesman, said the pandemic helped kill the project, too, after it contributed to North Park Gateway being unable to close escrow on the project along the terms of its agreement with the city.
Before the agreement was terminated, the plan designated the first floor for commercial use while the top would make room for 10 residential units — one of which was considered affordable, meaning it would have been set aside for low-income tenants. If no developers express interest in the property during the current 60-day period, the city will be able to seek a traditional sale of the property, with any subsequent housing project above 10 units needing to set aside 15 percent for low-income residents.