Requests for Proposals for San Diego’s Civic Center and Previous Ritz Carlton Lot
In May, the City of San Diego opened the door to proposals for two separate projects in Downtown San Diego. The larger of the two, known as San Diego’s Civic Center, consists of 5 blocks in the heart of Downtown’s Core (or business) District. The five blocks occupy about 8 acres and could be a key project in the growth of Downtown San Diego. The second project is the parking lot bound by 7th, 8th, Market and Island, which was the former Ritz Carlton development.
The City of San Diego is currently advertising the available land under California’s Surplus Land Act and had an initial deadline of July 5th. In mid June, the City announced that they were extending their 60 day window an additional 30 days to August 4th. Their reasoning was that they wanted to give interested parties more time due to the Juneteenth and 4th of July holidays. There is speculation that this extension was due to the lack of interest in the projects. Real estate analyst Gary London with London Moeder Advisors is quoted in several articles, including in the San Diego Union Tribune, explaining the negative impact of the Surplus Land Act on project Feasibility.
- Request for Proposals now Due By August 4th, 2023
- Site 1 – San Diego’s Civic Center (5 Blocks – Approximately 8 acres)
- Site 2 – Block Bound by 7th/8th/Island/Market (former Ritz Carlton site)
- Requires a minimum of 25% affordable housing units
How does California’s Surplus Land Act Negatively Impact Project Feasibility?
Under the Surplus Land Act, projects are prioritized by how much low income housing is proposed, but a minimum of 25% of the proposed residences must be affordable units. Affordable residential units refers to deed restricted residences that are available to families making 80% of less of the median income for the area. This was created to alleviate some of the affordability issues in California, but given the cost of construction, it puts a strain on project feasibility. Opposition to the Surplus Land Act argue that it restricts the number of projects, thus decreasing supply and having a negative impact on future affordability.
If the city does not receive acceptable proposals under the Surplus Land Act, they are able to pursue traditional RFPs (request-for-proposal). Through traditional routes, developers would be required to set aside 15% of the available units for low-income housing rather than the 25% minimum required by the Surplus Land Act.