SAN DIEGO | Boom Rundown, Vol. 2

[bmfarley]

Alot of people are tired of the same big developers getting special treatment and monopolies from local government when it comes to deveoping in San Diego


I hear people saying this, like in the press, but where's the proof? The SD Tribune doesn't count.

The City has a general plan, land use ordnances, and zoning ordinances. Those form the foundation for what can be developed and where. But there's nothing wrong with a developer seeking variances or zoning changes in an ope forum in exchane for the city gettign something back in return.

[SDCAL]

I hear people saying this, like in the press, but where's the proof? The SD Tribune doesn't count.

The City has a general plan, land use ordnances, and zoning ordinances. Those form the foundation for what can be developed and where. But there's nothing wrong with a developer seeking variances or zoning changes in an ope forum in exchane for the city gettign something back in return.

that's just it - "open forum", most of these things take place on the sidelines, in CLOSED-DOOR meetings where decisions are made and the "public" forums conducted by city hall are merely guises to make it look like it's a fair process

That may sound negative, but I think anyone who thinks otherwise is naive, especially with how corrupt our city govt has been

Manchester does not simply compete for bids in an "open forum", this guy has a vast network of politcal allies that he's been grooming for years behind the scenes.

I just think monopolies are unhealthy period. I'd like to see more variety

Also, I'd like to see more edgy and creative developers get a piece of the pie in this town. Manchester is a staunch conservative and not exactly a developer known for world-class cutting-edge developments

[Marina_Guy]

What did Doug Manchester do that was so offensive that the city would ban him from further develoment?

All I know of him is the huge flag office building and the manchester...not been here in SD for too long, can someone fill me in?


Developer is foe of same-sex marriage

Manchester, others help fund initiative

By Bill Ainsworth
U-T SACRAMENTO BUREAU

March 15, 2008

Developer Doug Manchester and other prominent San Diego County businessmen have given significant financial support to an initiative that would ban same-sex marriage targeted for the November statewide ballot.


Douglas Manchester
Manchester's $125,000 donation has prompted a gay-rights activist to urge a boycott of the Manchester Grand Hyatt and the Manchester-owned San Diego Marriott Hotel and Marina.

In addition to Manchester, Mission Valley developer Terry Caster has donated $162,500; Robert Hoehn, owner of Hoehn Motors in Carlsbad, has given $25,000; and La Jolla businessman Roger Benson has given $50,000, state records show.

Manchester said he was motivated by his strong Catholic faith.

“I personally believe that marriage should be between a man and a woman,” he said.

Donations from San Diego residents make up a significant part of the $1 million raised for the initiative.


That has allowed the campaign to hire professional signature gatherers to help collect the 700,000 signatures needed to qualify the constitutional amendment for the ballot, said Andrew Pugno, an attorney for Protectmarriage.com, which is sponsoring the amendment.
Pugno believes his group will have enough signatures to make the ballot, but it will be close. The group expects to turn signatures in next month. Past efforts relying almost exclusively on volunteer signature gatherers have failed.

Keith Gran, a gay-rights activist and global project manager for a medical device company, said he is outraged by Manchester's donation.

“He's paying people to add a bigoted, discriminatory amendment to the constitution,” Gran said. “I think that's appalling. I think people ought to know that.”

In 2000, Proposition 22, a statute banning same-sex marriage, was approved by 61 percent of California voters. A constitutional amendment is less vulnerable to legal challenge.

Supporters of the new initiative effort said they believe any boycott would fail.

“Support for traditional marriage is a mainstream view,” Pugno said. “I can't imagine that efforts to boycott businesses with mainstream views are going to be successful.”

Manchester said his hotels and restaurants welcome gays and lesbians as employees and as customers. “I don't want to offend anybody,” he said.

But Manchester said he decided to donate because he has heard that schools that teach that marriage is between a man and a woman could be sued for discriminating against gays and lesbians.

“When they say that we cannot say that a marriage is between a man and a woman, that's where I draw the line,” Manchester said.

Manchester said he was encouraged by his friend Caster.

Caster, who heads Caster Cos., which owns A-1 Self-Storage and other commercial properties, said he believes that marriage between a man and a woman is fundamental to society.

“Without solid marriage, you are going to have a sick society,” he said.

Pugno said he believes that donations for the initiative have increased because the California Supreme Court is weighing a lawsuit on the legality of same-sex marriage.

News of Manchester's contribution has been circulating throughout the gay and lesbian community for several weeks. State Sen. Christine Kehoe, a San Diego Democrat who is a lesbian, said she was disappointed by Manchester.

“I was surprised that Doug Manchester would make such an enormous contribution to try to deny a small group of Californians their civil rights,” Kehoe said.

Gran has contacted officials with the Hyatt Corp., which operates the Manchester Grand Hyatt, to discuss the issue.

Hyatt employees plan to meet next week with the Greater San Diego Business Association, which promotes businesses owned by gays and lesbians.

“We are looking for them to put some distance between themselves and Doug Manchester,” said Joyce Marieb, chief executive officer of the business association.

Ken Dolan, a sales representative at the Manchester Grand Hyatt, said the Hyatt Corp. has a good record in supporting and hiring gays and lesbians.

“We are friendly to the (gay and lesbian) community,” Dolan said. “As a hotel, we had nothing to do with the contribution. We are trying to move ahead.”

[sandiegodweller]

Developer is foe of same-sex marriage

Manchester, others help fund initiative

By Bill Ainsworth
U-T SACRAMENTO BUREAU

March 15, 2008

Developer Doug Manchester and other prominent San Diego County businessmen have given significant financial support to an initiative that would ban same-sex marriage targeted for the November statewide ballot.


Douglas Manchester
Manchester's $125,000 donation has prompted a gay-rights activist to urge a boycott of the Manchester Grand Hyatt and the Manchester-owned San Diego Marriott Hotel and Marina.

In addition to Manchester, Mission Valley developer Terry Caster has donated $162,500; Robert Hoehn, owner of Hoehn Motors in Carlsbad, has given $25,000; and La Jolla businessman Roger Benson has given $50,000, state records show.

Manchester said he was motivated by his strong Catholic faith.

“I personally believe that marriage should be between a man and a woman,” he said.



Another spin is that he puts his money where his mouth is and stands up for what he believes in.

[SDCAL]

Another spin is that he puts his money where his mouth is and stands up for what he believes in.

He can have his beliefs, but for someone who creates developments that are supposed to serve the community at large, putting his money on such a divisive and controversial issue is really stupid, IMO

[navyweaxguy]

Hey what do you guys think of the 600 Front St Apartments? That is if anyone knows anything about them. I'm drawn to them because they have large underground parking spots. With me owning a lifted dodge ram that is important.

[Derek]

Hey what do you guys think of the 600 Front St Apartments? That is if anyone knows anything about them. I'm drawn to them because they have large underground parking spots. With me owning a lifted dodge ram that is important.



I pretty much just know where they are. But they are in a good location. Pretty quiet. There just isn't too much pedestrian activity in this part of downtown, but you won't find any homeless people either, it's just that there isn't too much ground level retail around. Just about all the amenities you might need are within a ten minute walk however.

[navyweaxguy]

Thanks. I got a decent pic of the apartment towers going up on the "dry" side of 32nd street Navy base. I will put that up tomorrow some time. It will be a nice addition on base.. the barracks I am in at the moment are fuggin awful.

[Marina_Guy]

cosmo square is still a go....... but not for 6 months.. it will be a parking lot for this summer, but should see some action this fall...

The giant Grigio Is also it going to get a roof top club, I can't think of the clubs name in LA , something like the "Orient" (think of the standard in LA). anyways my friends are stoked because the "orient?" is a great club

Hate to say "I told you so.. but..."

Big project downtown stalled by financing

Affiliate of S.D. developer has filed for bankruptcy

By Mike Freeman
STAFF WRITER

March 19, 2008

In the height of the housing boom, an affiliate of San Diego developer Simplon Corp. spent about $25.5 million acquiring a full block near Petco Park, where it planned a 35-story condo tower called Cosmopolitan Square.

This month, the Simplon affiliate filed for Chapter 11 bankruptcy – in part because of difficulties securing financing in today's tight credit markets.

The Simplon property, bounded by J Street and Seventh, Eighth and Island avenues, is believed to be the largest pending downtown project forced into bankruptcy by the current housing slump and constricting credit markets.


Simplon executives say the bankruptcy of Simplon Ballpark LLC was necessary to buy time so the company could secure new financing, including construction loans, to push the project ahead.
“I am confident we will remedy the situation and emerge much stronger and well-positioned in the market in relatively short order,” said Jack Scull, chief executive of Simplon Corp., in a written response to questions. “I fully anticipate we can proceed with the strong commitments from our new lending partners and start construction of Cosmopolitan Square as planned and approved by the end of spring.”

But court documents filed by the company's largest creditor contend that Simplon Ballpark has been granted short-term extensions since its existing debt came due in May and it still has been unable to obtain financing. It defaulted on the extension agreements and filed for bankruptcy on the eve of foreclosure, the creditor contends.

The creditor also said in court documents that Simplon owes nearly $40 million on the property to 14 additional lenders or investors. It faces an additional $1.5 million in liens for unpaid bills to engineering, architectural and consulting firms.

The property was recently appraised at $26.5 million, according to the creditor, which has asked the bankruptcy court to allow it to proceed with foreclosure.

In addition, a different Simplon affiliate also has filed for Chapter 11 bankruptcy on another condo/hotel site downtown – this one on a partial block at Ash and Front streets. The debt on that parcel, now a parking lot and taco shop, is about $13.5 million, according to court documents.

The company said it expects to refinance the debt on the site in the “immediate future.”

Simplon isn't alone in seeing its downtown projects stumble. Several have been shelved. Atmosphere, a roughly 80-unit loft project on Fifth between Beech and Ash streets, began construction but has since stalled, leaving unsightly steel bars around the site.

Cosmopolitan Square originally was approved for 334 condos with ground floor retail. It also included a city fire station.

“I believe this is one of the very best undeveloped sites downtown,” said Gary London of London Realty Advisors, a San Diego real estate consulting firm. “It is not likely to be developed by anybody for at least five or six years.”

Simplon has redesigned the high-rise. It now includes a “five-star hotel” for 210 rooms and 113 “very high end” condos, according to the company.

Hotels are considered easier to finance in today's tight credit markets than pure residential towers, according to real estate experts. Simplon didn't respond when asked if it has lined up a hotel operator.

But London noted that hotels are not immune to the current credit crunch, in which lenders are reluctant to take big risks on ambitious projects.

“Hotels still look good, but they're hitting the top of the market right now, and I think investors and lenders sense that,” London said.

Simplon Ballpark got its original $15 million loan in 2005 from Liberty Bankers Life Insurance. Last year, a limited liability company led by Steve Black, a principal in Cisterra Partners, bought the note from Liberty. Cisterra developed DiamondView Tower, an office high-rise just outside the right field wall of Petco Park.

Black contends that Simplon Ballpark now owes more than $18 million, including interest, penalties and other costs. He has asked the court to allow foreclosure to go forward. Simplon Corp. previously developed the Radisson Bay View, a 22-story, 334-room hotel in San Diego, the 10-story Radisson Hotel in National City and the Rancho Santa Fe Creek high-end subdivision, among other projects. The company emphasized in a statement that it believes it will be able to get financing to build Cosmopolitan Square.

“The credit markets have been a challenge for all developers over the past year or so and Simplon has certainly been delayed in its efforts,” the company said. “But the commitments it has received have been reaffirmed to Simplon, both as to additional equity partners and debt structures, which is why we anticipate an expeditious exit from the filings made.”

[sandiegodweller]

“I believe this is one of the very best undeveloped sites downtown,” said Gary London of London Realty Advisors, a San Diego real estate consulting firm. “It is not likely to be developed by anybody for at least five or six years.”

Simplon has redesigned the high-rise. It now includes a “five-star hotel” for 210 rooms and 113 “very high end” condos, according to the company.

Hotels are considered easier to finance in today's tight credit markets than pure residential towers, according to real estate experts. Simplon didn't respond when asked if it has lined up a hotel operator.

But London noted that hotels are not immune to the current credit crunch, in which lenders are reluctant to take big risks on ambitious projects.

“Hotels still look good, but they're hitting the top of the market right now, and I think investors and lenders sense that,” London said.

I guess my prediction of 2012 was a little optimistic.

[keg92101]

I guess my prediction of 2012 was a little optimistic.

I'm not quite sure. As the early 90's, those developers with surpluses of cash will continue to build projects, since they can't afford to simply let their cash sit idle. One such is Oliver McMillan. We built a couple of projects for them, and during that time, learned that they have made so much cash over the last 10 years from "Grand Slam" projects (The Glenn, Lofts at 777 6th, etc), they will continue to build apartments. However, It will be interesting to see how quickly they move onto the next one once their project on 10th & G is complete. It will probably depend on how fast it absorbs. One of the major problems with downtown is that the retail below new buildings sit idle for so long. Its funny how all of the old wherehouses are filling up lighting fast (EV Tavern, Basic, The Corner, etc...), while the ones represented by commercial brokers sit empty for 2-4 years. How can condo builders sell a 24-7 lifestyle when their retail below sits empty?

I also think all of the talks of Vantage Point and their nearly 700 units to absorb is way overplayed. That location sucks for those looking for a true downtown village feel. Its surrounded by parking lots, the 163, and office towers that shut down after 6 pm. I would not be suprised if this thing turns into apartments.

[Marina_Guy]

I'm not quite sure. As the early 90's, those developers with surpluses of cash will continue to build projects, since they can't afford to simply let their cash sit idle. One such is Oliver McMillan. We built a couple of projects for them, and during that time, learned that they have made so much cash over the last 10 years from "Grand Slam" projects (The Glenn, Lofts at 777 6th, etc), they will continue to build apartments. However, It will be interesting to see how quickly they move onto the next one once their project on 10th & G is complete. It will probably depend on how fast it absorbs. One of the major problems with downtown is that the retail below new buildings sit idle for so long. Its funny how all of the old wherehouses are filling up lighting fast (EV Tavern, Basic, The Corner, etc...), while the ones represented by commercial brokers sit empty for 2-4 years. How can condo builders sell a 24-7 lifestyle when their retail below sits empty?

I also think all of the talks of Vantage Point and their nearly 700 units to absorb is way overplayed. That location sucks for those looking for a true downtown village feel. Its surrounded by parking lots, the 163, and office towers that shut down after 6 pm. I would not be suprised if this thing turns into apartments.

Me thinks the rent is too high and the demographics still don't support good retail. It is interesting to note that Downtown SD has very little 'retail' ... plenty of bars, bars, and restaurants that really are bars... but little home furnishings, linens, card stores, etc. Compare this with the Pearl District in Portland... much different story there. I still think Downtown's residential population is very much 'bedroom' in nature. Suburban towers. I actually have neighbors that know very little about downtown and still drive everywhere. I guess it takes time to 'grow' a downtown culture.

[keg92101]

Me thinks the rent is too high and the demographics still don't support good retail. It is interesting to note that Downtown SD has very little 'retail' ... plenty of bars, bars, and restaurants that really are bars... but little home furnishings, linens, card stores, etc. Compare this with the Pearl District in Portland... much different story there. I still think Downtown's residential population is very much 'bedroom' in nature. Suburban towers. I actually have neighbors that know very little about downtown and still drive everywhere. I guess it takes time to 'grow' a downtown culture.

I am headed to the Pearl District at the end of April. What did the Pearl do differently in order to make the retail work there? There has to be some sort of overall plan in order to get all of the well rounded retail. I know that I would love to be able to get everything I need in EV, and hate getting in my car to go to Trader Joe's, Lowes, etc...

[SDCAL]

Me thinks the rent is too high and the demographics still don't support good retail. It is interesting to note that Downtown SD has very little 'retail' ... plenty of bars, bars, and restaurants that really are bars... but little home furnishings, linens, card stores, etc. Compare this with the Pearl District in Portland... much different story there. I still think Downtown's residential population is very much 'bedroom' in nature. Suburban towers. I actually have neighbors that know very little about downtown and still drive everywhere. I guess it takes time to 'grow' a downtown culture.

I think part of the problem is the retail we do have is boxed-up in Horton Plaza, again where most people drive to.

Whenever I am out walking around I see very few people doing "everyday things", ie shopping, walking to the gym, walking to work, etc. It seems like the vast majority of people on downtown's streets are either convention goers looking for a restaurant, or people dressed-up to go out to eat/clubbing. Downtown is still a place where you go to eat/bar hop, not known as a great shopping venue

I have noticed a lot of little botique clothing stores in the East Village and I NEVER see customers in them, I am wondering how they are surviving

[SDCAL]

Its funny how all of the old wherehouses are filling up lighting fast (EV Tavern, Basic, The Corner, etc...),

yes, I saw the sign for "the corner" in the old wherehouse adjacent ICON. What is it going to be? A restaurant??

[SDCAL]

well, I still hope cosmo square gets off the ground this year as unlikely as it may be.

Simplon sounds kind of desperate in that article - If they are going to be that persistent in the face of so many obstacles, maybe they should go all the way and propose a 600ft building, that would give a greater profit potential with more rooms and or condos on less land, and give the building automatic appeal and media attention as the tallest in the city. I would think a lender would jump at that - plus it is far enough SE to be out of that radius flight-path. We are running out of iconic spots to break the 500 ft mark, someone should try

[Marina_Guy]

I think part of the problem is the retail we do have is boxed-up in Horton Plaza, again where most people drive to.

Whenever I am out walking around I see very few people doing "everyday things", ie shopping, walking to the gym, walking to work, etc. It seems like the vast majority of people on downtown's streets are either convention goers looking for a restaurant, or people dressed-up to go out to eat/clubbing. Downtown is still a place where you go to eat/bar hop, not known as a great shopping venue

I have noticed a lot of little botique clothing stores in the East Village and I NEVER see customers in them, I am wondering how they are surviving

There is a good little mom and pop thing going on in parts of EV. Some interesting urban clothing shops. This is a trend I see in other parts of the country as well. A t-shirt can cost $60 or $70 bucks in these places. As far as I am concerned the 'live / work / play' thing for downtown is VERY over-rated. I really see that the hotels and convention center are the drivers of the economics in Downtown. Very few restaurants cater to the 'local' crowd. It is all for the business/convention person, the out of town tourist, and the 20 somethings that want to get drunk. I know there have been efforts to 'engage' the Downtown resident in the restaurant scene with 'specials' etc, but I think most of the them fail. I don't blame business for catering to the out of town crowd...but this trend doesn't help grow a 'neighborhood'.

A smart developer might want to consider lower rents or 'enticements' to encourage lower cost restaurants and retail in the ground floor of these buildings.

[keg92101]

There is a good little mom and pop thing going on in parts of EV. Some interesting urban clothing shops. This is a trend I see in other parts of the country as well. A t-shirt can cost $60 or $70 bucks in these places. As far as I am concerned the 'live / work / play' thing for downtown is VERY over-rated. I really see that the hotels and convention center are the drivers of the economics in Downtown. Very few restaurants cater to the 'local' crowd. It is all for the business/convention person, the out of town tourist, and the 20 somethings that want to get drunk. I know there have been efforts to 'engage' the Downtown resident in the restaurant scene with 'specials' etc, but I think most of the them fail. I don't blame business for catering to the out of town crowd...but this trend doesn't help grow a 'neighborhood'.

A smart developer might want to consider lower rents or 'enticements' to encourage lower cost restaurants and retail in the ground floor of these buildings.

Couldn't agree more. I want to know how the retail brokers are selling developers higher rents over a ten year period when their space sits vacant for 4 years before getting the space filled. Again, all the places downtown that locals used are old wherehouses that are not represented by the commercial brokerage team who keeps all the "NEW" retail space empty. It is also where we get the true "local" restaurants/shops/coffeehouses, not the national chains.

[SDDTProspector]

FROM:MARINA GUY

Hate to say "I told you so.. but..."

Big project downtown stalled by financing

Affiliate of S.D. developer has filed for bankruptcy
_________________________________________________________

Maybe that why... by buddy mentioned Doug Manchester (not) Simplon.. Maybe he is on to something.... I don't know...


We all know that Simplon is going in the crapper... they have been talking about it for the past 6 months now

[HurricaneHugo]

Usd!!

[kpexpress]

I think The Corner is supposed to be a burger joint/bar with a sort of lounge feel, that is what i heard. Walking past it I cant tell what it is supposed to be yet myself.

[sandiegodweller]

Woes in Condo Market Build
As New Supply Floods Cities
By JENNIFER S. FORSYTH and JONATHAN KARP
March 22, 2008; Page A1

The condominium market is about to get worse as many cities brace for a flood of new supply this year -- the result of construction started at the height of the housing boom.

More than 4,000 new units will be completed in both Atlanta and Phoenix by the end of the year. Developers in Miami and Fort Lauderdale, Fla., are readying nearly 10,000 total new units in a market already struggling with canyons of unsold condos. San Diego, another hard-hit region, will add 2,500 units, according to estimates provided by Reis Inc., a New York-based real-estate-research firm.

The new building comes on top of unprecedented supply. The U.S. finished 2007 with a supply of condos large enough to absorb 10 months of demand, the highest level since the National Association of Realtors began the tally in 1999.

The deluge means bad news for developers and potentially lower prices, including in cities such as Atlanta and Dallas that have avoided the worst of the housing bust. If defaults and foreclosures rise, lenders will feel the pain too.

Regulators have been sounding the alarm for weeks about the exposure of small and mid-size banks to commercial real estate, which mostly means construction loans to developers of condos and single-family housing.

Lenders of all sizes have $42 billion of condominium debt on their books, according to Foresight Analytics. In just three months -- between the third and fourth quarters of last year -- the delinquency rate rose to 10% from 5.9%, says the Oakland, Calif., research firm.

The news isn't bad for everyone. Vulture buyers have started to circle, hoping to take advantage of foreclosed properties that banks may start dumping at fire-sale prices. Also, some condos are being converted to rental units, increasing supply for renters and putting downward pressure on prices.

It may seem surprising that anyone would want to add supply to a market whose troubles have been well-publicized for many months. But the economics of condo building encourage developers to bring half-finished projects to completion, even when prices and demand are plunging.

Developers usually put up their own money for a project first, then spend borrowed funds. Once developers have spent their money and have commitments from lenders, they have a strong incentive to keep building to finish the project.

"These developers had millions of dollars tied up and they had them financed so they just moved forward," says J. Ronald Terwilliger, chief executive of Trammell Crow Residential, which builds many rental apartment buildings and also a few condos. "What they hope is that by the time the project is finished the market comes back."

Shelving Projects

However, developers and lenders can more easily shelve projects that are still in the early stages. Many developments nationwide are being canceled, suggesting that by next year or 2010, the number of new condos coming onto the market may slow to a trickle.

One big question hanging over the market is how many of the buyers who have put down deposits during construction will show up to close the deal. Some deposits were as little as 3% of the purchase price. The price of a condo has frequently fallen more than the amount of the deposit, giving the buyer an incentive to forfeit the deposit.

For example, if a buyer put down $50,000 for a unit priced at $500,000, and the value falls to $400,000, the buyer is apt to walk away -- or find some fault with the unit and sue the developer to get the deposit back. Furthermore, some buyers who still want to move in are finding that they no longer qualify for mortgage loans.

In Miami, only 57 units in the 118-unit Onyx on the Bay have closed since August 2007, leaving the remaining 61 units in the possession of the developer, according to Miami-Dade County records. Willy Bermello, the Onyx's developer, could not be reached.

The deteriorating economy isn't helping. "When the world goes to hell in a handbasket, the last thing anyone wants to buy is a condo," says Cathy Schlegel, a mortgage-loan broker in Fort Worth, Texas, whose condo in a high-rise called The Tower sat on the market for 14 months before she finally sold it at a loss in February.

The rising supply is a reflection of the picture in 2004 through 2006 -- a time of huge demand for condos. Speculation was rampant as investors believed empty nesters and young professionals seeking an urban experience akin to what they watched on "Friends" would prop up the condo market for years.

Most projects take about three years from the time they are marketed to potential buyers to the time they are ready to be moved into. Deposits help developers get a construction loan that is to be paid off when the buyers close on their new condos years later.

However, cancellations are rising, meaning developers may not be able to pay back their banks. Peter Zalewski, founder of Condo Vultures Realty LLC in Miami, says condo developers he is working with are expecting 20% to 40% of buyers who put down deposits to walk away from the deal. In some areas, such as inland buildings and new projects along the river in Miami "walkaways" are expected to be even higher.

Unlike single-family housing, condos tend to be concentrated in certain areas, meaning the pain is limited to pockets of the country.

In Jacksonville, Fla., developer Cameron Kuhn had planned to redevelop the SunTrust office tower into office condos as part of a larger complex that included residential condos. Now the housing condo tower is on hold, dashing city officials' hopes that the project would help to bring parking, residents and more life to the downtown.

Prices of condos have been steady in some areas and fallen elsewhere. The median condo sales price in the Cape Coral-Fort Myers area of Florida fell 26% to $202,300 in the fourth quarter of 2007 from $273,400 a year earlier.

Prices dropped nearly 20% in Tucson, Ariz., and 12% in the Atlanta area during that time, according to National Association of Realtors data. Inside the newly minted Quantum on the Bay in Miami, prices for two-bedroom units have fallen from the high $700,000s to around $500,000.

One option for a developer is to convert the condos to apartments. However, these projects are usually financed with the presumption that sales of individual condos pay off more than rents from a comparably sized apartment building. Also, lenders typically expect developers to pay off condo construction loans with the millions of dollars they receive when closing on the sales. Such a quick payout isn't possible if the developer is only receiving monthly rental payments.

Mr. Terwilliger says Trammell Crow plans its condo developments with an eye towards converting them into rentals if necessary. But its profits are cut when it does that because the company typically spends more for land and amenities when developing condos, he says.

A project called ATLofts at the mammoth Atlantic Station project in downtown Atlanta presold about 80% of its 303 units in a mixed-use building that had condos above retail space. But the project ran into water-infiltration problems. That gave buyers an out.

The developer, Lane Co., ended up turning about half the units into rentals. The developer of the retail space, Atlantic Town Center, bought the remaining 156 units as condos. Today, only 52 of those have sold, according to Haddow & Co., an Atlanta-based real-estate consulting company. An Atlantic Town Center spokesman predicted the remaining condos will sell "considering the prime location."

As more condominium projects get into trouble, investors are looking to pounce. Some 700 people showed up for a distressed-real-estate conference this past week in Miami where the condo glut was the dominant discussion subject.

Valet parking attendants had to wave participants away from the hotel and toward a parking lot at a shopping center, and attendees overwhelmed the conference halls, forcing many to watch the proceedings on screens in adjoining rooms.

--Peter Grant contributed to this article.

Write to Jonathan Karp at jonathan.karp@wsj.com

[keg92101]

Woes in Condo Market Build
As New Supply Floods Cities
By JENNIFER S. FORSYTH and JONATHAN KARP
March 22, 2008; Page A1

The condominium market is about to get worse as many cities brace for a flood of new supply this year -- the result of construction started at the height of the housing boom.

More than 4,000 new units will be completed in both Atlanta and Phoenix by the end of the year. Developers in Miami and Fort Lauderdale, Fla., are readying nearly 10,000 total new units in a market already struggling with canyons of unsold condos. San Diego, another hard-hit region, will add 2,500 units, according to estimates provided by Reis Inc., a New York-based real-estate-research firm.


Where are these 2500 units finishing this year? The only projects that I know of that are under construction are Vantage Point, Sapphire, Bayside, and Breeza. I've always said, as long as you are buying a unit that you plan on living in, as a home, for a while, there's no need to worry.

I think its funny how you are always posting the doomsday articles. I hope that the market does continue to trend downward. It may be my chance to get something on the cheap, but I doubt it. You always get what you pay for.

[malsponger]

I think the article refers to condos in general and not just in the downtown area. So that add's a whole lot more. Isn't Strata going up after all? Also that massive project in National City. Many other low rise condos going up all over the county too.

I do agree with keg though. I am not looking to make money off the real estate market when I buy a home. I am looking to have a personal dwelling I enjoy. The market got turned into "lets all make money" instead of lets find houses to RESIDE IN. I'll pay whatever price I feel a unit is worth to ME regardless of a declining market because if i'm buying i'm planning on staying and land (for the most part) is a finite resource. It will never become worth nothing.

[bmfarley]

Where are these 2500 units finishing this year? The only projects that I know of that are under construction are Vantage Point, Sapphire, Bayside, and Breeza. I've always said, as long as you are buying a unit that you plan on living in, as a home, for a while, there's no need to worry.

I think its funny how you are always posting the doomsday articles. I hope that the market does continue to trend downward. It may be my chance to get something on the cheap, but I doubt it. You always get what you pay for.
Vantage Point (679)
Sapphire (96)
Bayside(158)
Breeza(241)

Total 1,164

There's also

Aria (137)
Hard Rock (200?)
Cracker Factory (11)

and

Studio 15 (275?; 1/09)
15th & Market (?)
16th & Market (136;2009)

Altogether, I don't see 2,500 either. Perhaps hotel rooms are included?

[SDCAL]

Where are these 2500 units finishing this year? The only projects that I know of that are under construction are Vantage Point, Sapphire, Bayside, and Breeza.

San Diego is not limited to DT

Hillcrest has several projects, one on 5th ave and one high-rise right next to Balboa Park, (I also noticed something else across the street from balboa starting starting construction, not sure if it's condo or not); there are some smaller developments in North Park

There are also things going up in Fashion Valley

[Jobohimself]

I really want to see Cosmo happen...IMO it could be the most attractive building in the city.

[keg92101]

San Diego is not limited to DT

Hillcrest has several projects, one on 5th ave and one high-rise right next to Balboa Park, (I also noticed something else across the street from balboa starting starting construction, not sure if it's condo or not); there are some smaller developments in North Park

There are also things going up in Fashion Valley

The one on Sixth Ave, is stopped

The other one on 6th Ave is stopped.

[SDCAL]

The one on Sixth Ave, is stopped

The other one on 6th Ave is stopped.

maybe so, but my point was you were disputing the WSJ article soley on what you know of DT. If you took the entire city into consideration, thier number many be accurate. I don't think the WSJ pulls numbers out of thin air, maybe the UT would but not the WSJ hehehe:)

[SDCAL]

I really want to see Cosmo happen...IMO it could be the most attractive building in the city.

I agree. Something will go up there - - it is a prime location, the question is when and what

Hopefully anyone who buys it will either keep a similar design or work off the design to create something even better :)

I still think it would be a good location to try and challenge the 500ft height limit

Those radius maps that were posted some time back on this site show that East Village is just outside the circular radius specified by the FDA that is subject to the strict restrictions. I really think Ballpark Village and the Cosmo Square site are outside of that radius, based on those maps. When these height limits were put into place, downtown didn't stretch this far east, so the radius became known as a "blanket" rule that nothing dt could be over 500ft. It just convincing our very conservative, backwards, NIMBY government officials to approve it that would be a nightmare.

Anyway, any project that could distinguish itself as the tallest skyscraper in the city would have an advantage in marketing and media attention, so I'm surprised no developer has the cajones to try:shrug:

[bmfarley]

I agree. Something will go up there - - it is a prime location, the question is when and what

Hopefully anyone who buys it will either keep a similar design or work off the design to create something even better :)

I still think it would be a good location to try and challenge the 500ft height limit

Those radius maps that were posted some time back on this site show that East Village is just outside the circular radius specified by the FDA that is subject to the strict restrictions. I really think Ballpark Village and the Cosmo Square site are outside of that radius, based on those maps. When these height limits were put into place, downtown didn't stretch this far east, so the radius became known as a "blanket" rule that nothing dt could be over 500ft. It just convincing our very conservative, backwards, NIMBY government officials to approve it that would be a nightmare.

Anyway, any project that could distinguish itself as the tallest skyscraper in the city would have an advantage in marketing and media attention, so I'm surprised no developer has the cajones to try:shrug:
I agree; however I think the best type of project, one that would be worthwhile to a developer, would be one that would make money. To me, I am thinking office building. And, I am uncertain southeastern downtown San Diego generates sufficient interest for an office building of such height. Well see... as downtown has evolved, and continues to evolve, at a rapid rate.

Btw, what would make an area attractive enough to build something taller and more grand? What has worked in other great American cities?

[ShekelPop]

Whatever happened with the Stella condo project off of Hancock st. near old town (from the same developer as Embassy/Lumina downtown)? I remember we were discussing it when they started grading the site in late 2006, did they stop after that? Is anyone up on what stalled it besides the obvious answer that its located in a stupid location? I keep meaning to drive by just to see where they left it but i always forget. On the same note, why hasn't this group been able to get any of their proposals off the ground, not Embassy, not Stella, and not the one they proposed for national city either (at least i'm pretty sure the national city one is MIA also)? Australian mob front? I feel like they spent the last 5 years all on a dare to see who could publish the best flash based real estate website.

[sandiegodweller]

I think its funny how you are always posting the doomsday articles. I hope that the market does continue to trend downward. It may be my chance to get something on the cheap, but I doubt it. You always get what you pay for.

I don't write the articles, I merely read them. If you can direct me to the rosy "condo market" articles, I will be glad to post those also.

I see from your posted photos that you probably live in Fahrenheit (or maybe Park Blvd East). You must be a renter because otherwise I can't imagine that your are thrilled that prices are down 40% or more from the peak in those buildings.

You also said that you work for a large general contractor. Obviously you interested in the continued building boom (even if it is detrimental to the overall market). Let's make sure we all know which point of view everyone is coming from.

[bmfarley]

... Let's make sure we all know which point of view everyone is coming from.
^^^ I am a wouldbe buyer that wants to see prices come down to rational levels... and also interested in a healthy local economy.

[SDCAL]

:sly: Whatever happened with the Stella condo project off of Hancock st. near old town (from the same developer as Embassy/Lumina downtown)? I remember we were discussing it when they started grading the site in late 2006, did they stop after that? Is anyone up on what stalled it besides the obvious answer that its located in a stupid location? I keep meaning to drive by just to see where they left it but i always forget. On the same note, why hasn't this group been able to get any of their proposals off the ground, not Embassy, not Stella, and not the one they proposed for national city either (at least i'm pretty sure the national city one is MIA also)? Australian mob front? I feel like they spent the last 5 years all on a dare to see who could publish the best flash based real estate website.

I'm not sure what happened with them - they had plans in SD before they had plans in Phoenix (either Tempe of Scottsdale I can't remember), but now it looks like the Phx project will get started before Lumina here. Maybe the Phx market was more attractive for some reason? Though I hear they are in the same downturn the rest of the country is in

[Marina_Guy]

:sly:

I'm not sure what happened with them - they had plans in SD before they had plans in Phoenix (either Tempe of Scottsdale I can't remember), but now it looks like the Phx project will get started before Lumina here. Maybe the Phx market was more attractive for some reason? Though I hear they are in the same downturn the rest of the country is in

I think it is under construction... Pretty far along as well. Any web cams in that area...? If you take the trolley I think you can see it.

http://www.stellalife.com/indexFlash.htm

[sandiegodweller]

I think it is under construction... Pretty far along as well. Any web cams in that area...? If you take the trolley I think you can see it.

http://www.stellalife.com/indexFlash.htm

You can see it from the 5 Freeway if you know where to look.

I am all for edgy projects in pioneering areas but knowing that there are some relative bargains on condos outside of industrial areas, what discount will be required to sell these units?

I hope that Britt, Dion and Caroline get a good deal!

[keg92101]

I don't write the articles, I merely read them. If you can direct me to the rosy "condo market" articles, I will be glad to post those also.

I see from your posted photos that you probably live in Fahrenheit (or maybe Park Blvd East). You must be a renter because otherwise I can't imagine that your are thrilled that prices are down 40% or more from the peak in those buildings.

You also said that you work for a large general contractor. Obviously you interested in the continued building boom (even if it is detrimental to the overall market). Let's make sure we all know which point of view everyone is coming from.

We own our place in Fahrenheit and purchased at pre-sale to what resales are selling for now in our building. So am I bummed that in 3 years i have 0% return? Sort of, but we plan on living here for another 10 years, so we'll see what the place is worth in 10 years, as that is all that really matters I work for a large contractor that does mainly military / commercial work and have actually increased our company size by 20% in the last month to merely keep up with all of our work, and we are trying to hire more people right now. I'd be interested to know what unit in my building is down 40%, as I would probably purchase that as a rental. There is only 1 unit available for sale in our building, and it is due to a divorce/breakup. It has been on the market for over a year due to their asking price and only 1 parking space for a 2 bedroom. Also the last unit that sold in our building was purchased for 383K (700 sf loft) back in March of '06, and sold as a resale for $380k. A $3k loss is hardly 40%, and that purchase price still puts units at well over $500 per SF.

Though I agree that many speculative investors are taking a bath in the current market, real estate is highly localized and, as I keep telling my friends who want to purchase downtown, but are waiting for the nicer buildings to drop to the same levels as the other buildings, that this will not happen. While you may get a unit in Diamond Terrace, Park Blvd West/East for under $400/SF, some day, you will not find a unit in my building for that. You can't get the Fahrenheit/M2i/doma product anymore (exposed concrete, 11-20 ft. ceilings, gas ranges, etc...) All you get now are your 8'6" - 9' ceilings, orange peel drywall, and china granite counters, and electric ovens.

[sandiegodweller]

We own our place in Fahrenheit and purchased at pre-sale to what resales are selling for now in our building. So am I bummed that in 3 years i have 0% return? Sort of, but we plan on living here for another 10 years, so we'll see what the place is worth in 10 years, as that is all that really matters I work for a large contractor that does mainly military / commercial work and have actually increased our company size by 20% in the last month to merely keep up with all of our work, and we are trying to hire more people right now. I'd be interested to know what unit in my building is down 40%, as I would probably purchase that as a rental. There is only 1 unit available for sale in our building, and it is due to a divorce/breakup. It has been on the market for over a year due to their asking price and only 1 parking space for a 2 bedroom. Also the last unit that sold in our building was purchased for 383K (700 sf loft) back in March of '06, and sold as a resale for $380k. A $3k loss is hardly 40%, and that purchase price still puts units at well over $500 per SF.

Though I agree that many speculative investors are taking a bath in the current market, real estate is highly localized and, as I keep telling my friends who want to purchase downtown, but are waiting for the nicer buildings to drop to the same levels as the other buildings, that this will not happen. While you may get a unit in Diamond Terrace, Park Blvd West/East for under $400/SF, some day, you will not find a unit in my building for that. You can't get the Fahrenheit/M2i/doma product anymore (exposed concrete, 11-20 ft. ceilings, gas ranges, etc...) All you get now are your 8'6" - 9' ceilings, orange peel drywall, and china granite counters, and electric ovens.

I hope that you are right and Fahrenheit is immune to the current market downturn but if your building hasn't had a sale in 24 months and the only unit on the market has been for sale for 12 months, I doubt that you can use March 2006 prices as a barometer for current value. Parkloft is twice the building that Fahrenheit is (even with the inept HOA board, the high HOA's and the construction defect lawsuit). Check the current prices over there. The "exposed concrete, 11-20 ft. ceilings, gas ranges, etc..." are all great amenities in a rising market. Buyers pay very small premiums for these in a down market.

[keg92101]

I hope that you are right and Fahrenheit is immune to the current market downturn but if your building hasn't had a sale in 24 months and the only unit on the market has been for sale for 12 months, I doubt that you can use March 2006 prices as a barometer for current value. Parkloft is twice the building that Fahrenheit is (even with the inept HOA board, the high HOA's and the construction defect lawsuit). Check the current prices over there. The "exposed concrete, 11-20 ft. ceilings, gas ranges, etc..." are all great amenities in a rising market. Buyers pay very small premiums for these in a down market.

Sorry, miss-type. March '06 original purchase = $383K
Nov '07 resale of same unit = $380K

Personally, I've been in Parkloft, and to me, having a desk clerk (I don't consider him a door man since he doesn't open the door!) and a work out facility (especially with Fit opening) worth paying at least an additional $200 per month in HOA fees.

Also agree that while buyers wont pay premium for the nicer units in a down market, they will in the up market. The owners of the nicer units that live in their units will not sell until the market turns around, if ever. Personally, I plan on never selling our unit.

[bmfarley]

We own our place in Fahrenheit and purchased at pre-sale to what resales are selling for now in our building. So am I bummed that in 3 years i have 0% return? Sort of, but we plan on living here for another 10 years, so we'll see what the place is worth in 10 years, as that is all that really matters I work for a large contractor that does mainly military / commercial work and have actually increased our company size by 20% in the last month to merely keep up with all of our work, and we are trying to hire more people right now. I'd be interested to know what unit in my building is down 40%, as I would probably purchase that as a rental. There is only 1 unit available for sale in our building, and it is due to a divorce/breakup. It has been on the market for over a year due to their asking price and only 1 parking space for a 2 bedroom. Also the last unit that sold in our building was purchased for 383K (700 sf loft) back in March of '06, and sold as a resale for $380k. A $3k loss is hardly 40%, and that purchase price still puts units at well over $500 per SF.

Though I agree that many speculative investors are taking a bath in the current market, real estate is highly localized and, as I keep telling my friends who want to purchase downtown, but are waiting for the nicer buildings to drop to the same levels as the other buildings, that this will not happen. While you may get a unit in Diamond Terrace, Park Blvd West/East for under $400/SF, some day, you will not find a unit in my building for that. You can't get the Fahrenheit/M2i/doma product anymore (exposed concrete, 11-20 ft. ceilings, gas ranges, etc...) All you get now are your 8'6" - 9' ceilings, orange peel drywall, and china granite counters, and electric ovens.

The units below are of Faherenheit. Do the price per sq ft tell a story? Other than prices remain flat, I dont think they do. Just my opinion.

Unit Number Bd/Ba Close Date
Unit # 512 Loft 11/21/2007
Unit # 603 1+Den 7/25/2007
Unit # 311 Loft 6/5/2007
Unit # 708 Loft 4/27/2007 (builder unit, not resale)
Unit # 303 2 2.00 2/28/2007
Unit # 310 Loft 2/23/2007
Unit # 301 1 1.50 12/26/2006 (builder unit, not resale)
Unit # 305 2 2.00 10/19/2006
Unit # 704 2 2.00 10/5/2006
Unit # 514 Loft 9/20/2006
Unit # 501 Loft 9/14/2006
Unit # 504 Loft 7/18/2006
Unit # 609 Loft 6/16/2006

Unit Number Sold Price
Unit # 512 $380,000
Unit # 603 $505,000
Unit # 311 $340,000
Unit # 708 $411,100 (builder unit, not resale)
Unit # 303 $505,000
Unit # 310 $370,000
Unit # 301 $561,400 (builder unit, not resale)
Unit # 305 $521,900
Unit # 704 $797,900
Unit # 514 $632,000
Unit # 501 $535,000
Unit # 504 $578,900
Unit # 609 $625,000

Unit Number Sq. Ft.
Unit # 512 730
Unit # 603 1027
Unit # 311 768
Unit # 708 764 (builder unit, not resale)
Unit # 303 1060
Unit # 310 764
Unit # 301 1284 (builder unit, not resale)
Unit # 305 1060
Unit # 704 1217
Unit # 514 1272
Unit # 501 996
Unit # 504 1060
Unit # 609 1276

Unit Number $ / Sq Ft
Unit # 512 $520.55
Unit # 603 $491.72
Unit # 311 $442.71
Unit # 708 $538.09 (builder unit, not resale)
Unit # 303 $476.42
Unit # 310 $484.29
Unit # 301 $437.23 (builder unit, not resale)
Unit # 305 $492.36
Unit # 704 $655.63
Unit # 514 $496.86
Unit # 501 $537.15
Unit # 504 $546.13
Unit # 609 $489.81

[sandiegodweller]

The units below are of Faherenheit. Do the price per sq ft tell a story? Other than prices remain flat, I dont think they do. Just my opinion.

I don't know what these numbers say exactly. The building has had one sale and one unsuccessful listing since the credit markets collapsed in August 2007.

Price per square foot is one measure of comparison but isn't really useful when comparing a 730 sf unit to a unit that is significantly larger or smaller.

[sandiegodweller]

Sorry, miss-type. March '06 original purchase = $383K
Nov '07 resale of same unit = $380K

Personally, I've been in Parkloft, and to me, having a desk clerk (I don't consider him a door man since he doesn't open the door!) and a work out facility (especially with Fit opening) worth paying at least an additional $200 per month in HOA fees.

Also agree that while buyers wont pay premium for the nicer units in a down market, they will in the up market. The owners of the nicer units that live in their units will not sell until the market turns around, if ever. Personally, I plan on never selling our unit.

The HOA's are horrendous at Parkloft in relation to the level of service. To be fair, a portion ($88 per month) is being used to fund the Construction Defect lawsuit. Still way too high. Blame the HOA Board for the past 2 years.

In real terms of buying power, $200 per month equates to a loss of about $30,000 (using 7% and a 30 year term). Not fatal but still not a great selling point.

[keg92101]

The units below are of Faherenheit. Do the price per sq ft tell a story? Other than prices remain flat, I dont think they do. Just my opinion.



That was the point I was making. Prices have been flat since we closed with the builder. Those of us that live in our units, and plan to, for a while, will be fine when the markets sort out all the bad loans. Some people are going to be able to make a ton of money on this downturn. I will tell you that I think every unit from floor 4 down, maybe less the corner unit, has only one parking space, even if it is a 2 bedroom. Big negative.

[keg92101]

Some downtown developers renting units at their condominiums
By THOR KAMBAN BIBERMAN, The Daily Transcript
Wednesday, March 26, 2008


Developers of three downtown condominiums who began their sales three or four years ago have elected to rent out at least some of their remaining units until the sales market improves.
Smart Corner at 1080 Park Blvd. consists of a 19-story, 301-unit condominium and a 125,000-square-foot office building with the San Diego Housing Commission taking 75,000 square feet.
Negotiations are ongoing with another non-profit user that would take much of the remaining office space.
Both buildings offer ground floor retail space and are separated by the San Diego Trolley, including the trolley station at Park and C Street.
Ground floor retail tenants include Starbuck's Subway, 7-Eleven, and Maui Wowie among others.
A survey of the County Recorder's Office show 53 units have been sold in the 3 1/2 years since sales started in August 2004.

Smart Corner

Sherman Harmer, Urban Housing Partners principal, the co-developer of Smart Corner along with Lankford & Associates, Canyon Johnson Urban Funds, J&T Consulting and Avion Development, said 40 of the project's units are being rented to tenants who have the option to buy.
"This is just an interim step ... These are just six-month leases," said Harmer adding that the units are primarily targeted to first-time homebuyers. "We're waiting for a better mortgage market."
Harmer said the rents range from $1,500 to $2,700 per month.
"This is pretty close to a mortgage," he added.
The condominiums are priced from $225,000 to $980,000 for units ranging from 450 to about 1,750 square feet.
As for why it has taken so long for the units to sell, there is no one answer.
Early on, concerns were raised about the location near City College as well as the impact of having a trolley running through the middle of the project.
Harmer, who said double-paned glass in the units and dampeners in the structure keep noise and vibration out, said the project's location with its own trolley stop and near City College is a plus.
A Smart Corner Web site boasts that the project "embodies the best principles of smart growth and transit oriented development," but as Raye Scott of the Scott Finn & Associates team of Prudential California Realty noted, it hasn't always been easy to keep the sales going.
"Their timing was bad. The market was cooling down by the middle of the decade," Scott said. "Also, some people might believe having a trolley going through the project might be a nice feature, but not everyone would agree," Scott said.
Patricia Leone, broker/owner of Centre City Properties downtown also said Smart Corner was a victim of timing.
"It took a little bit longer to complete construction (in the summer of last year) and the slowdown had started well before then," Leone said.
Leone does say she likes the design with the trolley coming through, and both Leone and Scott said Smart Corner and most of the other downtown projects will fare very well once the mortgage markets pick up and the economy settles.
While Smart Corner's sales have been sluggish, they have gone significantly quicker at Park Terrace at 206 Park Blvd. where 150 sales have been recorded at a 220-unit condominium.
Alan Nevin of MarketPointe Realty Advisors says this project by Intracorp. San Diego is faring very well.
While calls to officials at Park Terrace were not returned this week, Nevin said about 50 units were for rent, but he has no doubt these units will be sold at a future date.
"They're in great shape...," Nevin said, adding that most of the rentals are on one-year leases. He said the rents for the 50 units in that program range from $2,200 to $2,500 per month "and they rented very quickly."
The complex consists of two buildings; an eight-story structure with 80 units and a 14-story building with 140 units.
The Park Terrace units range from 390 to 1,214 square feet with studios to two-bedroom floor plans. The prices ranged from $230,000 for the studio to $869,000 for a two-bedroom unit with the best views, according to MarketPointe.
Park Terrace has also been busy leasing its ground floor retail. Earlier this winter, Massage Envy has a 10-year, $1.66 million lease on 4,369 square Feet.
Another sizable downtown condominium project with a rental program is Atria, a Carlyle Group development at 101 Market St.
This was actually a condominium conversion project; that 149-unit development had an even 100 escrows recorded as of this week.
Nevin estimated that Atria, which went back to renting some of its units about a year ago, has between 40 and 50 rentals. Carlyle Group officials could not be reached for comment this week.
Atria has one- to three-bedroom floor plans ranging from 586 to 1,496 square feet. The prices ranged from $340,000 to $789,000.
Prudential California's Scott, who believes Atria could have dropped its prices earlier, predicts each of these developments will sell out as fewer and fewer new condominium projects are added to the market.
During the 1990s recession, the 320-unit CityFront Terrace condominium on Harbor Drive went to a rental program while waiting for the market to improve.
The market eventually did, the units sold and individual condominiums are now being marketed for resale.
While Scott couldn't recall any other developers who are renting out their condominium units, she said there is hardly a building downtown where at least some condominium owners aren't trying to rent out their units until the for-sale market improves.
When asked how long it will be before the developers and condominium owners can go back to selling their units, Scott had two answers.
"On the optimistic side a year to 18 months. On the pessimistic side, two to three years. I always see the glass as half full. I think we'll come out sooner," Scott said.
Scott added there haven't been as many foreclosures of properties downtown as one might think.
"We're seeing a slowdown with these, and even when we see these properties go to a short sale, people are not buying at 40 cents on the dollar," Scott said. "They are at 2006 prices, so they are not giving these away."

[bmfarley]

^^^ I am not sold on Smart Corner at all! My hang-up is the floor plans and size. Too small. And, they advertise one bedrooms that really are no one bedrooms. 3/4 opague walls without doors and no closet does not make a bedroom!

[keg92101]

^^^ I am not sold on Smart Corner at all! My hang-up is the floor plans and size. Too small. And, they advertise one bedrooms that really are no one bedrooms. 3/4 opague walls without doors and no closet does not make a bedroom!

This article just shows where we are at in terms of market cycles. It is comparing these projects to Cityfront Terrace, who couldn't give their units away during the 1990's. Once the market turned around, that building turned into one of the prime downtown buildings (I'm not a big fan of it though)

[bushman61988]

Biggest Hotel on Coast Planned


1,929 rooms seen for downtown S.D. site
By Jeanette Steele
UNION-TRIBUNE STAFF WRITER

March 28, 2008

San Diego will be home to the West Coast's largest hotel if the Marriott Convention Hotel at Ballpark Village – now proposed to have 1,929 rooms – becomes a reality.
Graphic:


Marriott hotels downtown
The hotel, first proposed last summer, was set to be the biggest in San Diego County with 1,650 rooms. Now, the downtown property is positioned to be Marriott's flagship convention destination on the Pacific.

But it also could create more traffic and parking headaches for people who live in the East Village, downtown's fastest-growing residential area.

At least one hotel consultant is puzzled by Marriott's timing as tourism experts are downgrading their projections because of the deteriorating national economy. Besides this behemoth project, at least 5,000 hotel rooms are in the development pipeline for downtown San Diego.

Marriott may be spurred on by competition from Gaylord Entertainment, which is angling to build a 1,500-to 2,000-room hotel and convention center on Chula Vista's bayfront.

Learn more
The developer and the city's downtown redevelopment agency are hosting a community discussion of Marriott's project in Ballpark Village on April 14 from 6 to 8 p.m. at the Omni Hotel San Diego. For more information, call (619) 235-2200.

West Coast hotels
by the numbers

The five largest hotels on the West Coast, ranked by number of rooms:

1,908: Hilton San Francisco

1,625: Manchester Grand Hyatt San Diego

1,573: Hilton Anaheim

1,498: San Francisco Marriott

1,362: San Diego Marriott Hotel & Marina

SOURCE: MeetingNews Summer 2007 Meeting Guide


“Marriott's strategy is to be the biggest kid on block,” said La Jolla hotel consultant Jerry Morrison. “They are expanding in all markets beyond where other brands would normally expand, in terms of how many hotels you put in the same market under the same flag.”

Marriott operates four hotels downtown and is developing this and two others in the city center.

A San Diego Convention Center spokesman said Marriott's move does not compete with the center's hopes for expansion. In fact, it may help San Diego attract lucrative mega-meetings, instead of losing them to other cities.

One example, said convention center Vice President Steven Johnson, is San Diego Comic-Con International, the high-profile pop-culture convention.

“They are bursting at the seams here now,” Johnson said.

The extra exhibit space at the proposed Marriott – and at the 1,200-room Hilton under construction east of the center – might allow San Diego to keep Comic-Con here after its contract is up in 2012.

More hotel rooms downtown play a role in attracting conventions.

Tracey Adams, national sales manager at San Diego's PRA Destination Management, said that if an 8,000-person convention books in San Diego, the attendees might be spread over four or five hotels. Las Vegas' mega-hotels, with 3,000 rooms and up, can accommodate that convention in one or two hotels.



Advertisement“We'd be able to compete more effectively with cities like Las Vegas,” Adams said.
For the average San Diegan, the upshot would be more hotel-room taxes flowing into the city's coffers and possibly more competitive room prices when splurging on a weekend getaway downtown.

The latest Marriott is being proposed by JMI Realty, the real estate company of Padres owner John Moores. JMI is developing a five-block area east of Petco Park called Ballpark Village.

A master plan for Ballpark Village was approved by the city in 2005, and it includes a hotel at the site. But JMI Realty will have to gain approval for the specifics from the city's downtown redevelopment agency.

The early proposal was for 1,650 hotel rooms and 60 condos in two 487-foot towers, with 175,000 square feet of meeting space. The latest proposal calls for 1,929 rooms in 500-foot towers and 216,000 square feet of meeting space.

To Claudette Cooper, homeowners association president at ICON condominiums, the proposed hotel translates into an influx of new traffic in her neighborhood.

ICON, which opened early last year, is on J Street between 10th and 11th avenues. Cooper said that finding street parking on Padres game nights is like doing battle. She dreads how it will be with thousands of additional visitors in the mix.

Blocking ICON's views of the bay is another concern.

“We need to be careful how it is designed so it doesn't decrease values by walling off views and increasing congestion,” Cooper said.






I'll try to post some renderings I've seen, but I can't find any right now, but it basically two fairly slender twin towers...Exactly what we DON'T need is twin towers, but while they're not at all ugly, they're nothing at all special. It'll definiltely add some great depth to our plateau skyline, and it's really an exciting new development!

[malsponger]

Though some views will be blocked I cant see how Icon residents are not urging for something like this to bring life to the area. The Icon is on the verge of no-man's land in my opinion. The area could really use this. All sides of the ball park are awesome except for the lots to the East, and from personal experience 12 and Imperial is just a scary place in general.

[HurricaneHugo]

I can't see the graphic damnit!

[sandiegodweller]

Anyone notice that the Hard Rock Hotel has ramped up advertising for condo-hotel sales again? I thought that they were basically sold out months ago.

[northbay]

I can't see the graphic damnit!

the graphic is only a map of marriotts current and proposed developments
you can view it on the union-tribunes site @ http://www.signonsandiego.com/uniontrib/20080328/images/park.gif

seriously, as an outsider ive gotta say from the map, is this building really in the way of the airport? seems like from its southern location they could build one tall tower instead of 2 smaller ones (make a height limit exception, like thats gonna happen tho)

[SDCAL]

the graphic is only a map of marriotts current and proposed developments
you can view it on the union-tribunes site @ http://www.signonsandiego.com/uniontrib/20080328/images/park.gif

seriously, as an outsider ive gotta say from the map, is this building really in the way of the airport? seems like from its southern location they could build one tall tower instead of 2 smaller ones (make a height limit exception, like thats gonna happen tho)

I agree with you completely!!

This building is SE enough to be out of the radius of where the height restriction is, unfortunately our local government can be very hard-headed and people in this community freak out and raise lawsuits whenever anyone proposes doing something out of the ordinary

I think this would be a prime location to challenge the height limit. I have been wondering why no developer has tried yet, but I am sure part or all of the reason is they don't want to get tangled-up in costly legal challenges.

We just had a bunch of drama with this Sun Road project that went over it's heigh limit and it was a big, expensive, long legal mess

So, I guess we will have to live with a plateau skyline that has a ton of 500ft buildings :( :( :( :( :(

[SDCAL]

other than the short height, I do hope it gets built. It seems like the area east of Petco has stalled, hopefully this project will foster growth and help get the new library out of the ground!!

[IconRPCV]

As an ICON resident I have no problem with the hotel. I do not know why this woman, whom i pay an absurd amount every month to represent me, would say this. It is exciting to live on the frontier of the urban renaissance, people like her and her suburban NIMBY mentality need to stay in Poway. She is probably one or the 'Zoners who have weekend homes in my building, I swear they make up about half of the place. I am really excited about the new law school going in around the corner, that will be a big boost to the neighborhood, a much larger one than either a hotel or a library will produce.

[HurricaneHugo]

law school?

[HurricaneHugo]

We just had a bunch of drama with this Sun Road project that went over it's heigh limit and it was a big, expensive, long legal mess

So, I guess we will have to live with a plateau skyline that has a ton of 500ft buildings :( :( :( :( :(

Yeah but wasn't that clearly violating the height limit?

[CoastersBolts]

law school?

The Thomas Jefferson School of Law, currently located off San Diego Avenue near Old Town, will be relocating downtown in East Village. It's expected to open around 2010 and, yes, should provide a good boost to that part of town.

It'll be located at 11th and Island Avenue.

[staplesla]

Anyone notice that the Hard Rock Hotel has ramped up advertising for condo-hotel sales again? I thought that they were basically sold out months ago.

A friend of mine works there and he said that many people bailed and the last minute. I'm assuming this would have something to do with the current economic downturn.

[HurricaneHugo]

since there's a thread of water shortages on the city discussions forum...

does san diego/california have any plans to deal with this looming problem?

i know there was a desalination plant proposed for carlsbad, but i think it got shot down?

[Derek]

http://i106.photobucket.com/albums/m252/vinnyd19/san_diego_padres.gif

[HurricaneHugo]

word life

[mongoXZ]

Biggest Hotel on Coast Planned



To Claudette Cooper, homeowners association president at ICON condominiums, the proposed hotel translates into an influx of new traffic in her neighborhood.

ICON, which opened early last year, is on J Street between 10th and 11th avenues. Cooper said that finding street parking on Padres game nights is like doing battle. She dreads how it will be with thousands of additional visitors in the mix.

Blocking ICON's views of the bay is another concern.

“We need to be careful how it is designed so it doesn't decrease values by walling off views and increasing congestion,” Cooper said.

*yawn*
I never understand the logic of some of these people. They seem to not understand that they bought into an urban lifestyle. Crowded streets and sidewalks will be part of the package and nobody is entitled to views of the bay. Morons.

[CoastersBolts]

What does someone like the idiot who runs the HOA at Icon do on gamenight, like last night? The City closes streets around the ballpark to limit traffic congestion during games, as it has done since 2004 long before ground on Icon was even broken and there were far fewer people living in the East Village. So now this woman feels entitled to peace and quiet despite the fact that she lives in a CBD and that her building is visible from a Major League Baseball stadium? Go back to San Pasqual if you want views and peace and quiet.

[ShekelPop]

I was able to get some construction photos while I was at the Doubletree the other day:

Vantage Pointe:
http://farm3.static.flickr.com/2123/2381344160_2f13c3005b.jpg?v=0

Sapphire:
http://farm3.static.flickr.com/2100/2381344272_6d434a06cd.jpg?v=0

Breeza:
http://farm3.static.flickr.com/2057/2381344376_a170497f24.jpg?v=0

[sandiego_urban]

*yawn*
I never understand the logic of some of these people. They seem to not understand that they bought into an urban lifestyle. Crowded streets and sidewalks will be part of the package and nobody is entitled to views of the bay. Morons.
I totally agree. No one living in a downtown high-rise should expect their views to be protected. :yes:


Can someone confirm whether these renderings of the Ballpark Marriott are current? While the towers aren't fully visible, it does show it's base. Given it's location, I guess you can't expect too much as far as bases go.

http://www.johnsonfain.com/launch.html

Click enter, then our work, then projects, then look for Ballpark Marriott

[teiwaz]

in reference to the Simplon Ballpark situation:

stated in the letter above,

'The property was recently appraised at $26.5 million, according to the creditor, which has asked the bankruptcy court to allow it to proceed with foreclosure.'

The writer either did not have the info or chose not to add it but, two other appraisers have priced the development at 55 to 65 million. The 26.5 stated is only the land (appraised years ago!) and not the entitlements. This dark and nasty plan by Steven Black makes me wonder how he sleeps at night. The court date for this is April 16th and we will either see Black get bought out before that or fail in his 'darkside' attempt to rule the world.

[IconRPCV]

Hey check out my pics of Petco and enviorns from Opening Day. The thread is in the US Photos Section under Opening Day Downtown. Tell me what you think.

[sandiegodweller]

in reference to the Simplon Ballpark situation:

stated in the letter above,

'The property was recently appraised at $26.5 million, according to the creditor, which has asked the bankruptcy court to allow it to proceed with foreclosure.'

The writer either did not have the info or chose not to add it but, two other appraisers have priced the development at 55 to 65 million. The 26.5 stated is only the land (appraised years ago!) and not the entitlements. This dark and nasty plan by Steven Black makes me wonder how he sleeps at night. The court date for this is April 16th and we will either see Black get bought out before that or fail in his 'darkside' attempt to rule the world.

Entitlements in downtown San Diego have little intrinsic value. CCDC basically rubber stamps approval of your application as long as it meets their guidelines and there is little or no public opposition to almost every submittal.

Regarding the Simplon site, the current approvals decrease the value of the property. The requirement to relocate and build a new $5 million firestation make it less valuable. If Cisterra doesn't get refinanced out of the deal in BK court, they will go back to the drawing board and redesign a different project.

If the site was actually worth more than the $17 million +/- that Cisterra paid for the note, why didn't anyone else figure it out while the note was being marketed for 2+ months?

[keg92101]

[QUOTE=sandiegodweller;3469442]Entitlements in downtown San Diego have little intrinsic value. QUOTE]

Are you kidding? I agree that CCDC lets way too much go through, and don't beat up architects enough to get them to design better projects, but if you are selling a fully entitled project, your design is done. Meaning the value of site engineering, architecture, etc have already been paid for.

Last I checked a fully entitled project anywhere is worth more than a piece of land without any design or approvals, but maybe I'm a bit naive.

[teiwaz]

I agree, to say that all approvals and a full one city block design with financing for construction ready to go isn't worth anything is a little naive. Any judge with a right mind would see the effort and money put into this project and not rule that the property is the same price as it was when it was just bought 4 years ago! I would love to believe that rubber stamping actually exists but from any of my own developments, I know it doesn't. The time and material you have to supply is amazing and you do have to pass major factors to get an approval. Especially downtown SD overlooking the ball park!

[sandiegodweller]

I agree, to say that all approvals and a full one city block design with financing for construction ready to go isn't worth anything is a little naive. Any judge with a right mind would see the effort and money put into this project and not rule that the property is the same price as it was when it was just bought 4 years ago! I would love to believe that rubber stamping actually exists but from any of my own developments, I know it doesn't. The time and material you have to supply is amazing and you do have to pass major factors to get an approval. Especially downtown SD overlooking the ball park!

Are you a creditor on this project?

The FREE MARKET is telling you that the approvals are worthless. The UNIMPROVED LAND with entitlements is trading for less than it did 2 years ago.

The land, based on it's location has value. The market forces said it is worth about $17 million.

Spending money, time and materials on plans and pretty artist's renderings doesn't necessarily equate to "added value" unless someone actually wants to build the approved project. At this point in time, a big "white elephant" project isn't very attractive and therefore doesn't have much value.

Where is the approved financing? I think that the FACT that the project went bankrupt before it got started indicates that it doesn't have any financing to build it.

FYI - there are about 10 other projects in downtown in the same position (PepBoys, Burger King, TC Holdings, the site behind Albertsons, the site in front of Albertsons, Triangle, etc). They all have approvals but really aren't worth any more than the dirt beneath them.

If the process wasn't relatively easy (rubber stamped by CCDC), why is downtown San Diego so popular with speculators and how did all of these projects get approved in the past 3 years? Speculators tend to follow the path of least resistance.

[sandiegodweller]

[QUOTE=sandiegodweller;3469442]Entitlements in downtown San Diego have little intrinsic value. QUOTE]

Are you kidding? I agree that CCDC lets way too much go through, and don't beat up architects enough to get them to design better projects, but if you are selling a fully entitled project, your design is done. Meaning the value of site engineering, architecture, etc have already been paid for.

Last I checked a fully entitled project anywhere is worth more than a piece of land without any design or approvals, but maybe I'm a bit naive.

Fully entitled doesn't necessarily mean that the project is ready to build. It means that a Tentative Tract Map has been approved with conditions of approval. I don't know if Simplon spent hundreds of thousands of dollars to create the construction drawings, the foundation plan, the landscape plan, the utility plans, etc. I doubt that they paid the completion bonds, school fees, mitigation fees, traffic fees, park fees, etc.

For example, you are a big proponent of the Navy Broadway Complex, as am I. It is a Fully Entitled mixed-use development (3 million square feet of office, hotel, retail, parking and 1.9 acres of public open space), the Development Agreement was approved in 1992. It is nowhere near ready to construct.

[SDCAL]

Regardless of the chances the project will proceed, Simplon and the CCDC have added more specifics on 4-April. Before the Cosmo Square update had blanks for the number of hotels vs condos, now they have the specific numbers:


Simplon Corporation plans to construct a mixed-use project with 211-room hotel, 113 Condominiums, 13,000 sf of retail block bounded by J Street, Seventh, Eighth and Island avenues.


I still think this would be a good spot to challenge the 500ft height limit, either by this project or anyone who buys it out. With this prime location, if a building could tout being the tallest in the city, that would provide millions in free publicity and prestige and set it apart from being "just another high-rise condo" -

[OCtoSD]

I was just looking around on the webcam, and South East of Smart Corner is going up a High Rise in the shape of an L. I was wondering if anyone know what project it is. Since it is back there next to the social services I'm guessing it is one of Father Joe's projects. Anyone know for sure?

[OCtoSD]

It is pretty much behind market street village, the Albertsons

[keg92101]

It is pretty much behind market street village, the Albertsons

Yup, father joe's village...

[keg92101]

Are you a creditor on this project?

The FREE MARKET is telling you that the approvals are worthless. The UNIMPROVED LAND with entitlements is trading for less than it did 2 years ago.

The land, based on it's location has value. The market forces said it is worth about $17 million.

Spending money, time and materials on plans and pretty artist's renderings doesn't necessarily equate to "added value" unless someone actually wants to build the approved project. At this point in time, a big "white elephant" project isn't very attractive and therefore doesn't have much value.

Where is the approved financing? I think that the FACT that the project went bankrupt before it got started indicates that it doesn't have any financing to build it.

FYI - there are about 10 other projects in downtown in the same position (PepBoys, Burger King, TC Holdings, the site behind Albertsons, the site in front of Albertsons, Triangle, etc). They all have approvals but really aren't worth any more than the dirt beneath them.

If the process wasn't relatively easy (rubber stamped by CCDC), why is downtown San Diego so popular with speculators and how did all of these projects get approved in the past 3 years? Speculators tend to follow the path of least resistance.


Hardly, I've always disclosed I work for a design-builder. The reason why the above mentioned projects aren't worth more than the dirt they sit on, is that their design isn't worth any more than the dirt they sit on. To me, fully entitled and permitted is ready to build. Simplon was at that stage. I know, cause my wife worked on the con-docs over 2 years ago. I'm not saying that fully entitled, permitted projects add double digit percentage, but it will add on any cost / carry for the design and the time to do it.

[teiwaz]

...and what about the latest appraisals? Are they worth nothing as well? Two separate companies have appraised the project and both have come in around 55-60 mil. It seems like 'sandiegodweller' is siding with the sharks who swim around looking for injured fish and then challenge them in court! Again, april 16th is the date set for BK court and we will see the truth.
I hope Cosmo can pull it off as it's a classy development, better then what Bosa does which is boring and out dated already!

[sandiegodweller]

Hardly, I've always disclosed I work for a design-builder. The reason why the above mentioned projects aren't worth more than the dirt they sit on, is that their design isn't worth any more than the dirt they sit on. To me, fully entitled and permitted is ready to build. Simplon was at that stage. I know, cause my wife worked on the con-docs over 2 years ago. I'm not saying that fully entitled, permitted projects add double digit percentage, but it will add on any cost / carry for the design and the time to do it.

It wasn't directed towards you.

How are the approved plans for CosmoSquare worth more than the dirt if no one wants to build it?

Go back and read about The Elle project near Little Italy. http://cfx.signonsandiego.com/uniontrib/20070819/news_1m19condo.html. If no one uses your plans, they aren't worth much.

"The leader of the pack in condo redesign is probably the Elle, once proposed as a 173-unit housing project on A Street in Little Italy.

The Elle is now Columbia Tower, a 364-room hotel proposed by a new owner. The hotel will include 63 condo units. "

[sandiegodweller]

...and what about the latest appraisals? Are they worth nothing as well? Two separate companies have appraised the project and both have come in around 55-60 mil. It seems like 'sandiegodweller' is siding with the sharks who swim around looking for injured fish and then challenge them in court! Again, april 16th is the date set for BK court and we will see the truth.
I hope Cosmo can pull it off as it's a classy development, better then what Bosa does which is boring and out dated already!


I have a great idea for you. Take your appraisals to a money source that is highly experienced at reviewing real estate appraislas to determine value (Countrywide, Ameriquest, New Century, Citigroup, UBS, Ditech, Bear Stearns, Washington Mutual, etc.) and see if you can get them to lend you 50% of the appraised value ($27.5 - $30 million). The land will be the collateral for the loan. Show up at the bankruptcy proceedings on the 16th with a Cashiers Check (or a briefcase full of cash to make a really grand statement). I will guarantee you that Cisterra will sell the note for $27.5 million. You can then put a big FOR SALE sign on the property (make sure to say "Includes approved plans!") for $60 million. Maybe some rich guy will be going to a game at Petco Park and write an offer.

I just gave you a $30 million idea!

You can take a portion of your $30 million and buy my condo next door to CosmoSquare. It appraised for over $800,000 in 2006 but I will let it go for $650,000.

You can flip it for $800,000 (I still have the appraisal) and pick up another $150,000. I know that is chump change after your first $30 million but you can use it for "walking around money".

[teiwaz]

Never-mind. Good luck to you and your depreciating condo and thanks for the sarcasm. If you have any actual professional insight on this then please but if you want to just bang away at things you think you know (entitlements aren't worth anything) then have fun. I hope Cosmo blocks your view!

[sandiegodweller]

Never-mind. Good luck to you and your depreciating condo and thanks for the sarcasm. If you have any actual professional insight on this then please but if you want to just bang away at things you think you know (entitlements aren't worth anything) then have fun. I hope Cosmo blocks your view!

Obviously you have some sort of financial interest in this project. Are you one of the several limited partners who is owed money on the 2nd or 3rd TD? Your comments regarding Steven Black (Cisterra) make me think that you are in danger of being wiped out in foreclosure.

In all honesty, what do you really expect that the bankruptcy judge will do on the 16th? Are you hoping that he stops the foreclosure so the property can be marketed?

As far as the property (55,000 sf) being worth $1000 psf as an unimproved lot, I haven't seen any comparable sales that approach 50% of that number.

[teiwaz]

Steven Black is SDG, not Cisterra... if the judge is shown a legit presentation of new lenders and appraised value of the project along with the shady intentions of Black by buying the note to just steal the land a month later then yes I expect the judge to do the right thing. If the evidence is there why would the jusge throw all the hard work and all the investors, large and small to the wayside. It's called justice.

[SDCAL]

I admit I am a novice in this area as I don't have any connection to real estate, development, architecture, venture capital, and the like, but I would assume a plot of land with comprehensive design plans would be at least a little more valuable than something with no plans whatsoever?

Even if major structural/use changes were to be done by a new buyer, wouldn't certain foundation work done in the plans save money and re-work?

[keg92101]

Obviously you have some sort of financial interest in this project. Are you one of the several limited partners who is owed money on the 2nd or 3rd TD? Your comments regarding Steven Black (Cisterra) make me think that you are in danger of being wiped out in foreclosure.

In all honesty, what do you really expect that the bankruptcy judge will do on the 16th? Are you hoping that he stops the foreclosure so the property can be marketed?

As far as the property (55,000 sf) being worth $1000 psf as an unimproved lot, I haven't seen any comparable sales that approach 50% of that number.


Doing the math, I've got to agree. Maybe land with full entitlements in place could be $300-$350, but not $1000.

[sandiego_urban]

^^^Can't we all just get along? :D


Here's a quick blurb from this week's SD Business Journal regarding Horton Plaza's planned makeover. Let's hope they release renderings soon. :tup:


Horton Plaza Schedules Remodel?

Sources in local government circles report the long-awaited redo of Westfield’s near quarter-century-old Horton Plaza is expected to begin this fall, most likely in November. Those same sources say the first piece of the mall targeted for a makeover is the entrance next to the Balboa Theatre on Fifth Avenue and around homeless haven, the urban park fronting Broadway across from The US Grant Hotel. Westfield apparently wants to provide stores on the sidewalk level to give visitors a more urban street-shopping experience …

[sandiegodweller]

I admit I am a novice in this area as I don't have any connection to real estate, development, architecture, venture capital, and the like, but I would assume a plot of land with comprehensive design plans would be at least a little more valuable than something with no plans whatsoever?

Even if major structural/use changes were to be done by a new buyer, wouldn't certain foundation work done in the plans save money and re-work?

Yes, I was being too simplistic. Certain work product (ALTA Survey, Phase I environmental assessment, traffic study, paleo study, etc.) is valuable. The entitlements and building plans are only valuable if someone wants to build the building as it was approved.

For example, if someone wanted to sell you a lot in Barrio Logan that is a fully entitled project with all plans approved for a 10,000 sf ultra luxury mansion, would you pay a premium for those plans knowing full well that you would never build that product? On top of that the current owner, as part of the approval process has agreed to put in a stop light, repave the entire street block and relocate all of the underground utilities thereby adding huge onsite and offsite improvement costs.

You might be interested in the land but the entitlements/approvals have added ZERO value since no one would build the project as it is currently designed and approved.

Cosmo Square is composed of two products that no one wants to build in downtown San Diego for the near future, residential condos and hotel rooms.
On top of that, they agreed to move and rebuild the fire station at the corner of 8th and J for $5 million as part of their approvals. Therefore, since no one would build that project in the near future, the approvals have little or no value.

I am sure that CCDC is anxious to see that lot developed sometime soon so they will probably rubber stamp their approval for another high profile project as long as it conforms to the current Floor Area Ratio and parking requirements. They may be more stringent on getting comfortable with the developers financial capability.

[sandiegodweller]

Steven Black is SDG, not Cisterra... if the judge is shown a legit presentation of new lenders and appraised value of the project along with the shady intentions of Black by buying the note to just steal the land a month later then yes I expect the judge to do the right thing. If the evidence is there why would the jusge throw all the hard work and all the investors, large and small to the wayside. It's called justice.

You are correct. Steve Black formed a new LLC to buy the note, SDG Left Field LLC. Cisterra doesn't have anything to do with this transaction.

Your anger seems misdirected. Why are you blaming the note buyer? Liberty Bankers Life Insurance Company was the one who decided to sell the note in December. You should be pissed at Simplon (Evans and Scull) who got you into this predicament by borrowing way too much money on this project. They borrowed at least $42 million (according to court records). If they only paid $26 million for the dirt, where did the other $16 million go?

With any luck, the judge will order the property to be marketed and sold. If this happens, hopefully for you (if you are Scripps) the property sells for more than $18.1 million and you see some small portion of your $13.5 million. If you are behind Scripps, I wouldn't hold my breath.

[bmfarley]

I have a great idea for you. Take your appraisals to a money source that is highly experienced at reviewing real estate appraislas to determine value (Countrywide, Ameriquest, New Century, Citigroup, UBS, Ditech, Bear Stearns, Washington Mutual, etc.) and see if you can get them to lend you 50% of the appraised value ($27.5 - $30 million).

That's the funniest thing I've read here in a while! Emphasis added.


You can take a portion of your $30 million and buy my condo next door to CosmoSquare. It appraised for over $800,000 in 2006 but I will let it go for $650,000.

Another one!

Imo, it seems ridiculous to believe a square foot of land downtown is worth much more than $400. Even near the ballpark with approved plans. Could the buildable space above being playing a larger role in that $55m-$60m estimate?

[IconRPCV]

Hey has anyone heard any news regarding the market that is going into the TR Produce building?

[sandiegodweller]

Hey has anyone heard any news regarding the market that is going into the TR Produce building?

I saw the brokers in the space on Opening Day at Petco. They said that the Wal-Mart project is still going. The working name is something simple like "Marketplace".

The space looks smaller than a 7-11.

I saw that OneWorld Foods on 6th is dark. Anyone know the story (besides the obvious economic slowdown)?

[sandiegodweller]

The project that has NOT started yet (on the site of the cigar shop) is going to be a Marriott Renaissance Hotel.

The project currently under construction is going to be another Marriott brand.

The old cigar shop site/parking lot that is approved for a Marriott Renaissance was just fenced in with a nice painted chain link fence. They added a new guard shack at the entrance from 6th, across from Solamar.

I just spoke with the developer (his name is on the existing sign) at Opening Day for the Padres. He said that his group leased the ground to the same hotel group building the Marriott south along J Street. He thought that they would be breaking ground soon. I don't think they would have spent $25,000+ on the parking lot if they were breaking ground soon.

[Marina_Guy]

The old cigar shop site/parking lot that is approved for a Marriott Renaissance was just fenced in with a nice painted chain link fence. They added a new guard shack at the entrance from 6th, across from Solamar.

I just spoke with the developer (his name is on the existing sign) at Opening Day for the Padres. He said that his group leased the ground to the same hotel group building the Marriott south along J Street. He thought that they would be breaking ground soon. I don't think they would have spent $25,000+ on the parking lot if they were breaking ground soon.

This is horrible to hear. That whole process was such a disaster. CCDC really should be ashamed of themselves for this. Buy the land back and put some grass on it and call it ED Park (eminent domain). I am sure you could sell the naming rights in the future to a liquor company.

[Marina_Guy]

^^^Can't we all just get along? :D


Here's a quick blurb from this week's SD Business Journal regarding Horton Plaza's planned makeover. Let's hope they release renderings soon. :tup:


Horton Plaza Schedules Remodel?

Sources in local government circles report the long-awaited redo of Westfield’s near quarter-century-old Horton Plaza is expected to begin this fall, most likely in November. Those same sources say the first piece of the mall targeted for a makeover is the entrance next to the Balboa Theatre on Fifth Avenue and around homeless haven, the urban park fronting Broadway across from The US Grant Hotel. Westfield apparently wants to provide stores on the sidewalk level to give visitors a more urban street-shopping experience …

It will be interesting to see if this happens. Horton Plaza looks more and more like second rate mall every day. I did hear Nordstroms was given a chunk of change to remodel if they re-upped their lease... (They did) They had some drawings a year ago, but they only thing I see happening there is a remodel of the Cafe.

[keg92101]

I saw the brokers in the space on Opening Day at Petco. They said that the Wal-Mart project is still going. The working name is something simple like "Marketplace".

The space looks smaller than a 7-11.

I saw that OneWorld Foods on 6th is dark. Anyone know the story (besides the obvious economic slowdown)?

The space is 11,000 SF. I've never seen a 7-11 that big, but hey, what do I know?

[sandiego_urban]

I saw that OneWorld Foods on 6th is dark. Anyone know the story (besides the obvious economic slowdown)?
While checking out the new Tweet Street park on Cortez Hill, I chatted with a local resident who mentioned that it had recently closed. He sounded pretty bummed about it and said he'd miss their deli most of all. I bet this place would do well in Little Italy, don't you think?



And speaking of Tweet Street......here are a few pics. It's tiny, but pleasant.

http://i4.photobucket.com/albums/y120/Jaygergon/Downtown%20Shots/IMG_4952.jpg

http://i4.photobucket.com/albums/y120/Jaygergon/Downtown%20Shots/IMG_4954.jpg

Cortez Hill is looking good
http://i4.photobucket.com/albums/y120/Jaygergon/Downtown%20Shots/IMG_4956.jpg

http://i4.photobucket.com/albums/y120/Jaygergon/Downtown%20Shots/IMG_4969.jpg

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[sandiego_urban]

This is horrible to hear. That whole process was such a disaster. CCDC really should be ashamed of themselves for this. Buy the land back and put some grass on it and call it ED Park (eminent domain). I am sure you could sell the naming rights in the future to a liquor company.
I totally agree. I used to go to Gran Havana before they tore it down. Why not turn it into a park? How cool would it be to have our own Rittenhouse Square (in Philly) smack dab in the middle of the Gaslamp?

It will be interesting to see if this happens. Horton Plaza looks more and more like second rate mall every day. I did hear Nordstroms was given a chunk of change to remodel if they re-upped their lease... (They did) They had some drawings a year ago, but they only thing I see happening there is a remodel of the Cafe.
I'm thinking it will happen because Westfield has plans to renovate all of their malls in the county. I was at Plaza Bonita in National City recently and saw big changes there, such as an H & M store that was under construction and a new multi-screen theater complex.

Let's face it, Horton is 20 years old and is in definite need of a makeover. I'm just hoping they tear down the former Robinson's-May building as part of the renovation because that thing is ugly!

[sandiegodweller]

If they can pull off something like the Ivy, it might work. The problem is that the Hard Rock will steal a lot of the nightlife for the near future.

How many hipsters are in downtown San Diego to support all of the high-end bars and clubs?

Apparently the hipsters aren't as prevalent as everyone thought.

http://www.signonsandiego.com/news/business/20080412-9999-1b12club.html

“Opening a Stingaree these days would scare the (heck) out of me,” Brennan said with a wry smile. “If you don't have 800 people in there, it looks empty. Any of those gigantic places really have to fight to make sure they get market share, and these days there is not enough to go around for four or five megaclubs.”

“There are still a lot of people out there with money,” he said. “But everyone is fighting for a select few, because it's few and far between who can go out and spend $1,800 on a liquor tab for the night."

[PeterSmith]

It's funny how some cities' threads can make you want to pack your bags and move there immediately. This is one of those for me. I had no idea all this was going on in San Diego. Are there any future skyline renderings floating around?

Although, that Shapery Park Tower renderings is very...obvious...