SAN DIEGO | Boom Rundown, Vol. 2

[Eightball]

Originally Posted by Streamliner

A court ruling just came out allowing the height limits to be extended from 45 feet to 65 feet in the area surrounding the Morena Boulevard Trolley stop and an increase to 100 feet near the (currently u/c) Tecolote Trolley stop.

still seems awfully short ... why not 130 ft at least?

[Streamliner]

Originally Posted by TimeToBuild

http://https://www.sandiegouniontribune.com/business/growth-development/story/2021-04-27/bullet-dodged-350m-california-theatre-project-on-track-to-replace-decaying-building-with-condos-hotel

FINALLY!

Bullet dodged? $350M California Theatre project on track to replace decaying building with condos, hotel

City Council OKs construction permits despite objections from affordable housing proponents contesting the developer’s plan to build seven, income-restricted condos
Jennifer Van Grove
April 27, 2021
San Diego Union-Tribune

The Melbourne, Australia developer seeking to replace downtown’s decaying California Theatre with a 41-story, boutique hotel and condo tower successfully sidestepped an effort by affordable housing proponents to invalidate the project’s permits.

Tuesday, the City Council OK’d the permits with district representatives voting unanimously to affirm a February decision by San Diego’s Planning Commission.

The decision came in spite of dozens of public testimonials challenging the commission’s earlier determination. Several council members also expressed reticence at signing off on a housing project in which just 2 percent of the for-sale units, or seven condos, will be set aside for buyers making 100 percent of the area’s median income.

...

The project’s construction timeline is dependent on financing, the developer said.

[mello]

The project’s construction timeline is dependent on financing, the developer said.

Hmm so this whole time they still don't have financing or do the banksters have to see that the city will let you build first i.e. "construction permits"?

I was super excited about the article but looks like this gorgeous tower still isn't a sure thing as it hasn't secured financing yet. Lets hope they were just waiting on this ruling and already had a lender ready to roll.

[Streamliner]

Originally Posted by mello

The project’s construction timeline is dependent on financing, the developer said.

Hmm so this whole time they still don't have financing or do the banksters have to see that the city will let you build first i.e. "construction permits"?

I was super excited about the article but looks like this gorgeous tower still isn't a sure thing as it hasn't secured financing yet. Lets hope they were just waiting on this ruling and already had a lender ready to roll.

Yeah I'm hoping it was just a "let's give them a generic quote because we don't want to provide any concrete timelines", but I'm also being optimistic on this one because I love the design.

[SDfan]

The CA theater project will get built. They are a very reputable developer, and had strong trades union backing. With interest rates as low as they are, and folks in the upper classes dumping money into real estate, we should see the one go up in the coming year.

[SDCAL]

Originally Posted by SDfan

The CA theater project will get built. They are a very reputable developer, and had strong trades union backing. With interest rates as low as they are, and folks in the upper classes dumping money into real estate, we should see the one go up in the coming year.

If interest rates are low and folks in upper class dumping money into real estate, why can’t 7th/market get off the ground?

Is Cisterra reputable?

I ask this out of frustration and genuine curiosity, I’ve been following downtown developments for nearly two decades and that site has been planning a project since I first started following.

[Will O' Wisp]

Originally Posted by SDCAL

If interest rates are low and folks in upper class dumping money into real estate, why can’t 7th/market get off the ground?

Is Cisterra reputable?

I ask this out of frustration and genuine curiosity, I’ve been following downtown developments for nearly two decades and that site has been planning a project since I first started following.

Remember what he said about "strong trades union backing"? Take a guess what 7th & Market most definitely does not have.

[SDfan]

Originally Posted by Will O' Wisp

Remember what he said about "strong trades union backing"? Take a guess what 7th & Market most definitely does not have.

yup

[mello]

So securing financing is partly based on having union support? The court case with 7th and Market was cleared two years ago so how are unions still affecting the green light on Cisterra's project now?

Another thing I just thought of, Bosa is holding off on his ready to go semi twin to Pacific Gate because he feels demand for high rise condos is quite soft and is still trying to sell out Savina and PG.
Contrast this with CA Theatre, it's in a waaay less desirable part of DT than Bosa's site yet they think they can sell luxury condos there.... What do you guys think.

[Will O' Wisp]

Originally Posted by mello

So securing financing is partly based on having union support? The court case with 7th and Market was cleared two years ago so how are unions still affecting the green light on Cisterra's project now?

Another thing I just thought of, Bosa is holding off on his ready to go semi twin to Pacific Gate because he feels demand for high rise condos is quite soft and is still trying to sell out Savina and PG.
Contrast this with CA Theatre, it's in a waaay less desirable part of DT than Bosa's site yet they think they can sell luxury condos there.... What do you guys think.

You have to look at this from the perspective of an institutional investor. Investors hate uncertainty. They don't want to spend years or even decades sitting on a fat stack of cash when it could be invested and making them more money. They want to know exactly when their money will be needed and how much, so they can arrange for the funds to be available then and keep them working beforehand.

This is where 90% of NIMBY and trade union power comes from. If a developer is determined, and city leaders approve, the project will get built eventually. But "community opposition" can create a cloud of uncertainty for investors. Will someone file a CEQA lawsuit? They'll probably lose, but there's a good chance a judge will file a stop-work order if there's even an outside possibility there really was something left out of the EIR. And what if there was? No way of knowing that for certain, and if there was that resets the whole environmental process. What if they lobby city council to get the project killed? In San Diego that generally doesn't work, but you can never really know with politicians. What if they start a protest in front of your future construction site and construction partner decides the bad press isn't worth it? And so on and so on...

If a project's schedule might randomly shift by 2-10 years, an investor just isn't going to make a commitment until that uncertainty is reduced. They're going to wait until the environmental process is complete (including resolving any CEQA challenges), the building permits are secured, and city hall has given their stamp of approval. But then, their money is still invested in other things so it will take time to pull it out of that and bring it to bear on your new development. Hence why you often see a 2-3 year wait after a controversial project gets its final approvals and the funding is completely secured/construction begins.

By the by, Bosa said demand for waterfront high rise condos is soft. Aka the ultra-high premium market. CA theater's condos will be expensive, but not "we're going to throw in an on-demand car and driver service for no extra charge" level of expensive like Pacific Gate. Still room for growth there I'm guessing.

[SDCAL]

Originally Posted by Will O' Wisp

You have to look at this from the perspective of an institutional investor. Investors hate uncertainty. They don't want to spend years or even decades sitting on a fat stack of cash when it could be invested and making them more money. They want to know exactly when their money will be needed and how much, so they can arrange for the funds to be available then and keep them working beforehand.

This is where 90% of NIMBY and trade union power comes from. If a developer is determined, and city leaders approve, the project will get built eventually. But "community opposition" can create a cloud of uncertainty for investors. Will someone file a CEQA lawsuit? They'll probably lose, but there's a good chance a judge will file a stop-work order if there's even an outside possibility there really was something left out of the EIR. And what if there was? No way of knowing that for certain, and if there was that resets the whole environmental process. What if they lobby city council to get the project killed? In San Diego that generally doesn't work, but you can never really know with politicians. What if they start a protest in front of your future construction site and construction partner decides the bad press isn't worth it? And so on and so on...

If a project's schedule might randomly shift by 2-10 years, an investor just isn't going to make a commitment until that uncertainty is reduced. They're going to wait until the environmental process is complete (including resolving any CEQA challenges), the building permits are secured, and city hall has given their stamp of approval. But then, their money is still invested in other things so it will take time to pull it out of that and bring it to bear on your new development. Hence why you often see a 2-3 year wait after a controversial project gets its final approvals and the funding is completely secured/construction begins.

By the by, Bosa said demand for waterfront high rise condos is soft. Aka the ultra-high premium market. CA theater's condos will be expensive, but not "we're going to throw in an on-demand car and driver service for no extra charge" level of expensive like Pacific Gate. Still room for growth there I'm guessing.

This is all general, but for 7th/Market specifically are you saying unions are what’s still holding-up the project? If so, what do they want exactly? As Mello stated, that was litigated 2 years ago and Cisterra supposedly has had full entitlements with only the funding holding it up. Are unions still engaged in some sort of litigation or threats? You mention investors being turned off by community opposition, I live in the neighborhood and people seem positive about this project, it’s been a surface lot for over 2 decades. Also, a lot of cities that have far stronger unions than San Diego manage to get things built a lot quicker.

[TimeToBuild]

Originally Posted by SDCAL

This is all general, but for 7th/Market specifically are you saying unions are what’s still holding-up the project? If so, what do they want exactly? As Mello stated, that was litigated 2 years ago and Cisterra supposedly has had full entitlements with only the funding holding it up. Are unions still engaged in some sort of litigation or threats? You mention investors being turned off by community opposition, I live in the neighborhood and people seem positive about this project, it’s been a surface lot for over 2 decades. Also, a lot of cities that have far stronger unions than San Diego manage to get things built a lot quicker.

My takeaway is that because the unions held up the project it effectively restarted the financing rounds which delayed things beyond the end date of litigation by a year or so. AND then the pandemic hit/coupled with an election year creating a whirlwind of uncertainty. This uncertainty compounded by a significant part of the project relying on a five star hotel/residences. A lot of projections suggest we won't be back on track with our tourism/tradeshow/convention industry for another 4 or 5 years. So my bet is those financing this project or thinking about financing it will want it to align with that timeline. Meaning breaking ground sometime in 2022 or 2023 to open in ca. 2025

[Will O' Wisp]

Originally Posted by TimeToBuild

My takeaway is that because the unions held up the project it effectively restarted the financing rounds which delayed things beyond the end date of litigation by a year or so. AND then the pandemic hit/coupled with an election year creating a whirlwind of uncertainty. This uncertainty compounded by a significant part of the project relying on a five star hotel/residences. A lot of projections suggest we won't be back on track with our tourism/tradeshow/convention industry for another 4 or 5 years. So my bet is those financing this project or thinking about financing it will want it to align with that timeline. Meaning breaking ground sometime in 2022 or 2023 to open in ca. 2025

Said it better than I could've

[Northparkwizard]

Jonathan Segal's proposed high rise in Little Italy on Union between Cedar and Date.

[mello]

Notes on 7th/Market: The Ritz Carlton is only about 25 max 30% of the project its just the upper floor section. Most of it is residential and office space. If it broke ground now it would open in late 23 early 24. By then we should have a lot of that biotech office space online so more high end business travel could fill those rooms.

Even if tourism/convention biz is only at 70% of pre CV levels in early 24 this is a small and unique property as it will be the only 5 star hotel in DT so it has a decent shot
at staying full.

Question: What is up with East Village Green Park that was supposed to have started construction last year anyone heard any updates?

[unpermitted_variance]

Originally Posted by Northparkwizard

Jonathan Segal's proposed high rise in Little Italy on Union between Cedar and Date.

Where'd you find this? Can't find any info anywhere.

As to be expected with Jonathan Segal, it's a sleek and refined looking project; I love how skinny it is. Unfortunately it would probably mean the demolition of another historic house in the neighborhood, which I hate to see. Would much rather have the parking lot next door redeveloped.

[Northparkwizard]

Originally Posted by unpermitted_variance

Where'd you find this? Can't find any info anywhere.

As to be expected with Jonathan Segal, it's a sleek and refined looking project; I love how skinny it is. Unfortunately it would probably mean the demolition of another historic house in the neighborhood, which I hate to see. Would much rather have the parking lot next door redeveloped.

https://www.instagram.com/jonathansegalfaia

[SDCAL]

Originally Posted by TimeToBuild

My takeaway is that because the unions held up the project it effectively restarted the financing rounds which delayed things beyond the end date of litigation by a year or so. AND then the pandemic hit/coupled with an election year creating a whirlwind of uncertainty. This uncertainty compounded by a significant part of the project relying on a five star hotel/residences. A lot of projections suggest we won't be back on track with our tourism/tradeshow/convention industry for another 4 or 5 years. So my bet is those financing this project or thinking about financing it will want it to align with that timeline. Meaning breaking ground sometime in 2022 or 2023 to open in ca. 2025

Thanks, this does make sense. I just hope it doesn’t get scrapped, I agree the pandemic threw a huge curveball into it. I think they were close to breaking ground right before that hit.

Re: Johnathan Segal project in LI - love the sleek design!!

[SamFlood]

Tower on 6th




more Navy demo

[mello]

From a distance in Midway area or so this tower looks significantly taller than the 14 floor one next to it that was completed 2 years ago. It also doesn't look like its ready to top out I'm wondering if the developer is sneaking in some extra floors because it is supposed to be 20. It looks much higher than a 6 floor difference to its neighbor. Maybe it has 12 to 14 foot ceilings or something rather than the standard 9 ft.