This post originally appeared in the Aug. 24 Morning Report. Subscribe to the daily newsletter here.
San Diego Mayor Todd Gloria’s top staff revealed Wednesday that they planned to begin exclusive negotiations with a La Jolla investor who plans to gut the beleaguered 101 Ash St. tower and retrofit it into almost 400 apartments, at least 25 percent of which would be reserved for low-income residents.
Reven Capital was the only one to respond to the city’s call for housing proposals for the five-square blocks the city now owns including City Hall downtown.
The plan: Chad Carpenter, the CEO of Reven, told Voice of San Diego he plans to tear out everything inside of the building, including its major systems, but keep the building standing and turn it into apartments.
He said his firm has been focused on acquiring distressed office buildings. (Hard to imagine many more distressed than this one.)
“We’ve rebuilt office buildings inside and out and I know exactly what to do to this one,” Carpenter said.
Office Towers are Struggling
Carpenter says he has no interest in the politics and previous scandals around the building. He’s just been watching the market as companies adjust to workers who are operating remotely and downsizing.
“Right now, the asset class that includes office buildings is going through the worst downturn of my career and I have seen several recessions,” he said. “These towers are very expensive to carry just sitting there empty.”
What’s next: City staff will begin negotiations with Carpenter’s firm to get an exact plan including whether the city sells them the land or rents it. Then they will return to the Council with a proposal.
As for the rest of the five square blocks around City Hall, nobody bid on them in this round focused heavily on affordable housing. The city now has much more freedom to make a deal with developers that will require less of the new construction be set aside for low-income residents.