Downtown San Diego’s busiest transit hub is about to undergo a dramatic makeover that will include new bus bays, expanded trolley boarding platforms and a six-story apartment building with rent-restricted rents.
While the project was praised Thursday as something that will make the area east of Petco Park more vibrant and help solve the housing crisis, some local transit officials said they’re frustrated the apartment building won’t be taller.
“I’m concerned about missed opportunities on these scarce public resources — we’re only going to get to develop this once,” said Chula Vista Councilmember Jose Preciado, who serves on the Metropolitan Transit System board. “I’m just dismayed we’re not looking for partnerships that would take us to 20 stories, because the housing need is extraordinary in our region.”
MTS officials said they also would have preferred a taller building as part of the 12th and Imperial Transit Center expansion, but that it didn’t make financial sense for a developer to build a subsidized project any larger.
“It really came down to the financing,” said Karen Landers, MTS general counsel. “The cost to construct a building of that size and height — there is not a market or a funding source to do it.”
While the city and state have loosened zoning rules enough to allow buildings up to 40 stories tall in downtown, construction costs for buildings that tall make it financially infeasible, Landers said.
“Does MTS wait 20 years to see if the market changes, or does it build something now?” she said. “We don’t want to wait 10, 15, 20 years for that to be feasible and have this be vacant. We want a project that can come in now.”
Sharon Cooney, MTS chief executive, stressed that the transit center expansion will free up a second vacant parcel on National Avenue where MTS hopes to build a larger housing development in coming years.
“The project we’re looking at today does not preclude that larger project in the future,” Cooney said. “This is not precluding future development that maximizes the air rights or the zoning of this site.”
County Supervisor Monica Montgomery Steppe, another MTS board member, said she supports this project but would like MTS leaders to explore ideas that aren’t dictated by developers.
“As we look forward, I would ask us to broaden our scope and our creativity and our minds to think above and beyond what the market is dictating to us,” said Montgomery Steppe. “Somebody is walking away with cash at the end of this, and it certainly isn’t MTS.”
More than 150 apartments will go up by the 12th & Imperial Transit Center, shown here on Oct. 16, 2025, in San Diego. (K.C. Alfred / The San Diego Union-Tribune)
The housing project, which is being subsidized by the San Diego Foundation, will be part of a new housing corridor east of Petco Park that could dramatically change the character of that area.
The Logan Yards housing development will include 900 units, a project on the site of a former skydiving center will include 164 homes and the Tailgate Park project will include 600 homes and 1.4 million square feet of office and retail space.
Landers said the six-story project at 12th and Imperial, which will have 161 homes, was difficult to negotiate because of challenges at the site.
Several utility lines must be relocated, a large storm drain bisects the site diagonally and multiple sections of street must be eliminated on 13th Street, Commercial Street and National Avenue.
“It’s a much more complicated project than everybody thought at the beginning,” she said. “It’s required a lot more work and a lot more thought.”
She said the San Diego Foundation will likely partner on the project with Cypress Equity Investments, a developer based in Santa Monica that focuses on projects in areas slated for growth.
The project is slated to include 74 one-bedroom units, 55 two-bedroom units and 32 three-bedroom units. No details on income qualifications or rents have been disclosed.
Landers said the expansion of the transit center is crucial for MTS because 12th and Imperial is its largest and busiest station and is expected to become even busier with all the new housing planned nearby.
The $13.6 million expansion will increase the number of bus bays from four to 13, add more shelters and benches, improve the lighting and add new platforms for trolley service.
All three trolley lines — blue, green and orange — stop at the station, which also serves more than a dozen bus routes.
Most of the project will be paid for with a $10.9 million state grant that MTS was awarded under the Transit Intercity Rail Capital Program.
Landers said design work is nearly complete on the transit center expansion. MTS will likely solicit construction bids early next year.
The housing project, which will require federal tax credits, likely won’t break ground until 2027 and likely won’t be complete until 2029, Landers said.
During Thursday’s board meeting, the MTS board also unanimously re-elected board chair Stephen Whitburn and vice-chair Steve Goble to new two-year terms that extend through the end of 2027.
Whitburn is a San Diego City Council member, and Goble is an El Cajon City Council member.