San Diego stands to benefit substantially should it vacate City Hall and make its central downtown real estate available for redevelopment, according to a new report financed by a philanthropic organization with a vested interest in the area\u2019s renaissance.<\/p>\n
Tuesday, San Diego\u2019s Prebys Foundation released a report prepared by its consultant, urban planning firm U3 Advisors, that identifies the long-term, regional economic impact associated with a Civic Center that is remade with 4 million square feet of new development. The study also estimates the cost savings associated with the city\u2019s lease or purchase of a new City Hall.<\/p>\n
The report \u2014 titled, \u201cSan Diego Civic Center Revitalization: Quantifying Transformative Economic Impact\u201d \u2014 determined that the annual impact of a fully redeveloped Civic Center to the local economy would be $428 million. The sum reflects direct spending at the site alongside money that ripples through the community because of the creation of 941 permanent jobs and the addition of 4,500 new downtown residents.<\/p>\n
The economic impact was calculated using the U.S. Department of Commerce, Bureau of Economic Analysis\u2019 regional input-output model, and is based on a development program that calls for 2.1 million square feet for residential use (or 2,375 apartments), 252,000 square feet for hotel use (or 400 rooms), 186,500 square feet for retail use, 140,000 square feet for educational use, 200,000 square feet for theater use and 1 million square feet for parking.<\/p>\n
The report evaluated separately how to handle City Hall, finding that the city would save more than $325 million over two decades if it were to secure a replacement facility in lieu of substantially refurbishing the 1960s-era building it has now.<\/p>\n
\u201cThe important takeaway is that (the report) doesn\u2019t just look at a theoretical perfect development. It looks at what we\u2019re actually looking to do, and what it finds is that (the Civic Center redevelopment) could have a really significant impact on downtown,\u201d Prebys Foundation CEO Grant Oliphant told the Union-Tribune. \u201cThe idea of having thousands of more residents downtown could be absolutely transformational. Not only do we need the housing, but when you think about it, we always talk about housing as though it\u2019s disembodied from people. And here, we would have thousands of downtown residents who would animate the streets and change the behavior and what gets utilized.\u201d<\/p>\n
The economic impact report is nearly two years in the making, building on the Prebys Foundation\u2019s initial commitment in April 2024 to fund a big-picture vision<\/a> for the city\u2019s Civic Center real estate. At the time, the well-heeled organization teamed with the Downtown San Diego Partnership to supply a compelling conceptual plan that the city could use when putting the blocks on the market for a second time.<\/p>\n San Diego\u2019s Civic Center is the four-block, municipal compound bounded by A Street and C Street to the north and south, and First Avenue and Third Avenue to the east and west. The quad includes the City Administration Building (aka City Hall), the Civic Center Plaza office tower, Golden Hall, the Evan V. Jones Parkade parking garage and the Civic Theatre.<\/p>\n In May 2023, San Diego put its municipal complex on the market as part of Mayor Todd Gloria\u2019s plan to lease or sell the real estate to fund the construction or purchase of a new City Hall. The solicitation failed to attract developer interest, and Gloria intended to put the assets back on the market. In December 2024, he tabled the two-part plan<\/a>, called the Civic Center Revitalization plan, because of a substantial structural budget deficit.<\/p>\n Prebys Foundation, in concert with the Downtown Partnership, continued with the visioning work. In May, the nonprofit\u2019s consultant, U3 Advisors, put forward a mixed-use plan that is dominated by housing<\/a> but themed around arts, education and open space as attractions. The philanthropic organization then agreed to underwrite an analysis of the vision\u2019s impacts following a July request from four City Council members.<\/p>\n As such, the just-released report attempts to ground the lofty vision in economic reality, attaching real value to assumptions that may otherwise appear far-fetched.<\/p>\n The report assigns a value of $428 million in net annual growth to the local economy as a result of the new jobs and spending created by a fully remade Civic Center, or what\u2019s referred to as economic impact. What\u2019s more, the development of the site will produce $5.3 billion in one-time construction-related impacts, according to the report.<\/p>\n The city stands to collect $7.2 million in revenue each year from property taxes, transient occupancy tax and sales tax, the report states. The new revenue, however, does not reflect moving expenses, such as the construction of a new fire station or the relocation of city office space.<\/p>\n U3 also looked at how the remade Civic Center blocks could catalyze the redevelopment of vacant and underdeveloped parcels within a quarter-mile radius of the site. This analysis estimates that 6.9 million square feet of additional development is possible, with a one-time construction impact of roughly $9.1 billion.<\/p>\n \u201cFor far too long, San Diego\u2019s Civic Center has not lived up to its potential as a dynamic public space,\u201d Betsy Brennan, president and CEO of the Downtown Partnership, said in a statement. \u201cIt should be a place San Diegans are proud of, a vibrant hub that showcases why we are America\u2019s best outdoor downtown. This report brings into focus what we have long believed, which is that every investment we make into this crucial district strengthens downtown today and benefits the entire region for years to come.\u201d<\/p>\n The report also veers from the overall economic impact analysis to focus more narrowly on the likely first piece of the Civic Center redevelopment puzzle: What to do about City Hall.<\/p>\n U3 looked at the cost to rehabilitate San Diego\u2019s existing City Administration Building alongside the cost to lease or buy 250,000 square feet of replacement office space for city workers, with both scenarios modeled over a 20-year period.<\/p>\n The stay-in-place scenario would cost the city $487 million over 20 years, in today\u2019s dollars, the report states.<\/p>\n The calculation estimates that the city will need $104.4 million to address deferred maintenance at City Hall, $73.9 million for a full-scale renovation of the building, $141.5 million to fix up the Parkade to current standards and $28.2 million for other needs. In this scenario, the city would also spend $138.5 million on continued rent and operating costs for 100,000 square feet of off-site leased space. The deferred maintenance estimates are based on amounts identified in a 2014 facilities condition index report. They have been adjusted to reflect estimated increases in costs.<\/p>\n Conversely, the relocation scenario would cost the city $162 million to lease or $156 million to buy 250,000 square feet of space, over 20 years, in today\u2019s dollars, according to the report.<\/p>\n The lease-or-buy calculation includes costs to tear down City Hall and Golden Hall, assumes that current off-site leases are consolidated in the new facility, and estimates ongoing operations and maintenance costs. The report does not identify a specific downtown property to buy, but estimates a $35.1 million purchase price.<\/p>\n The relocation scenario equates to savings of at least $325 million, the report states.<\/p>\n The city\u2019s other office tower, Civic Center Plaza, was not considered in either calculation. The building, which is in better condition, is expected to remain in use for the time being.<\/p>\n \u201cU3 has weighed the requirements of that building \u2014 for upgrades and safety and the need to do that in a timely fashion \u2014 against the alternatives,\u201d Oliphant said. \u201cOf course, everybody would like to kick that can down the proverbial road. No one knows how long you can do that. At some point, that\u2019s going to have a much higher consequential cost for the city than making a move now.\u201d<\/p>\n The report\u2019s findings make the case for the city to not only move forward with redevelopment of the Civic Center blocks, but also to vacate City Hall. The conclusions align nicely with Prebys\u2019 vision for the site and a broader arts-driven renaissance of downtown, although they were not predetermined, Oliphant said.<\/p>\n \u201cThe report was commissioned because City Council asked for a better understanding of what some sort of significant development like we were proposing could do for the site. And they wanted to understand what it meant for City Hall,\u201d he said. \u201cWe did not commission the survey to prove that we are right. We commissioned a survey to (show) the likely economic impact. \u2026 It is not a marketing report. It is a genuine economic analysis that was requested by the city.\u201d<\/p>\n Prebys Foundation was established in 2016 after the death of local developer Conrad Prebys and is the philanthropic outgrowth of the Prebys estate. In 2021, the organization sold Prebys\u2019 portfolio of 66 residential complexes to Blackstone Group for more than $1 billion, in a move said to help fuel its charitable giving.<\/p>\n In April, the deep-pocketed foundation purchased the Wells Fargo Plaza office building<\/a> at 401 B St., near the Civic Center, as an investment in the city\u2019s struggling central business district. Prebys has since boosted occupancy at the property to 60%.<\/p>\n The foundation\u2019s persistence in revitalizing the Civic Center appears to be paying off. Gloria recently committed to bringing forward to the City Council a proposal to enter into an exclusive negotiating agreement with the San Diego Community College District, which is seeking to raze Golden Hall<\/a> and replace it with a museum building and student housing.<\/p>\n The Prebys Foundation will next fund, at an anticipated cost of $150,000, an implementation plan and road map for the Civic Center vision, using U3 Advisors once again to provide additional details on phasing, potential financing options and an assessment of the site\u2019s current infrastructure.<\/p>\n","protected":false},"excerpt":{"rendered":"San Diego stands to benefit substantially should it vacate City Hall and make its central downtown real estate…\n","protected":false},"author":2,"featured_media":152389,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[387,8303,181,205,100,13,388,74,76,75,1696],"class_list":{"0":"post-152388","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-san-diego","8":"tag-business","9":"tag-growth-development","10":"tag-latest-headlines","11":"tag-local-politics","12":"tag-news","13":"tag-politics","14":"tag-real-estate","15":"tag-san-diego","16":"tag-san-diego-headlines","17":"tag-san-diego-news","18":"tag-top-stories-sdut"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/152388","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=152388"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/152388\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/152389"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=152388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=152388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=152388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}