When citizen input is eliminated, are the “real” customers brokers and developers?
By Jay Powell
Best keep a look out the backdoor. The City is apparently in a mood to sell land. How much and to whom and when is not too clear, but they are already making lists and lining up brokers. A few citizens were on hand for a presentation to the June 10 meeting of the City Council Smart Growth and Land Use Committee on “Potential Sale of 14 Surplus Properties owned by the City of San Diego”.
The “For Information Only” power point was entitled “Excess Property Sales for Action Before City Council in 2015”. There were actually 16 on one list for “Excess Sales Using Brokers” and another 11 on a list titled “Exclusively Negotiated/Direct Sales”. And then there was another “Direct Sale” listed all by itself for the Villa Montezuma historical museum building. So maybe it was 28 excess properties. And every Council District has at least one listing on one or the other of the lists.
What could be more pertinent to land uses than the sale of City-owned land?
For Mid City residents in attendance it was a relief to find that two of the parcels on the first list had each been annotated with an all caps red lettered “HOLD.” Staff indicated they had so annotated at the request of Councilmember Marti Emerald. These two parcels sit adjacent to each of two freeway overpasses respectively at University Avenue and El Cajon Boulevard. They had been an agenda topic at a well-attended meeting of the City Heights Area Planning Committee (CHAPC) the week before.
CHAPC voted on a list of “OK” and “Not OK” uses for development on the parcels at the request of the City’s assigned Principal Planner. They added that they wanted a community wide meeting on the issue and another review before any action would be taken by the Real Estate Assets Department (READ).
But it turns out that those two parcels were not the only ones being considered for sale in Mid City. Another small, not quite quarter of an acre parcel that had been acquired in 1985 for the purpose listed as “open space” was also on the excess list.
The few members of the public that spoke to the item all questioned the process being employed and agreed that the first stop in any process to sell city-owned properties, including the parcel acquired for open space, should be at the recognized official community planning groups constituted by ordinance to advise the City Council on land use matters affecting their communities. What could be more pertinent to land uses than the sale of City-owned land?
Who decides whether city land is excess to public purposes and should be made available for sale? After answering a number of parcel specific questions from Council Committee members, the READ staff reassured the Committee that the City Council would have the last word on the actual sale they had negotiated.
READ Director, Cybele Thompson and her staff were very responsive to subsequent requests for additional information about the parcels and the process. Ms. Thompson, hired in September last year, has considerable real estate experience, most recently as Director, Global Client Relations in Los Angeles for Cushman & Wakefield, who claims to be the worlds largest privately held commercial real estate services firm. The abbreviated certifications behind her name cover nearly every letter in the alphabet. She has already earned respect from at least one Council office that experienced difficulties with former READ leadership in years past.
But in these follow up communications to City Council and READ staff it has become apparent that there is a difference of interpretation on the Council Policy (#700-10) which outlines policy and procedures for “Disposition of City-Owned Real Estate.” In researching this issue it appears that this policy underwent a complete rewrite after the passage of the Charter Amendment creating the so-called “strong Mayor” structure.
Councilmembers representing Mid City communities have been asked for assistance in clarifying the procedures and policy. The policy states that ”…properties that have been identified by the Mayor as candidates for sale will be presented to the Council for approval to be sold” (emphasis added).
No back up information had been provided on line for public review prior to the June 10 Council Committee meeting, since this was an “information item”. Indeed, it was not an “action item”, because action had already been taken. READ had already made the determination that these properties were in their estimation “excess” and offered them through a notification to all governmental agencies and City departments for a “60 day Mandatory Government Clearance Process”.
READ is declaring properties surplus, circulating the list for governance review, apprising the City Council through an information item at Committee and proceeding with engagement of brokers, marketing, receipt of bids and negotiating the sale before returning to the City Council for approval of the actual sale.
Clarification is also being sought on another provision in the policy’s procedure for Real Estate Review: “As part of the portfolio management plan for the City’s real estate assets, the Mayor’s staff will review the property inventory to determine which properties are no longer needed for public facilities or to support the elements of the General Plan and whose disposition will provide a greater public benefit” (hold that last phrase in mind for the end..).
The policy directs READ to prepare and present to the City Council a comprehensive “Portfolio Management Plan” on an annual basis, with periodic reviews and as-needed updates at City Council Committee.” Last amended in December 2012, the policy states that the plan shall include as a major element a “disposition plan for surplus property“ and a “request for authority to act within defined parameters (…as described in the policy).”
A search and request for a copy of the most recent FY 2015 “Portfolio Management Plan” revealed that the last plan presented to City Council was for FY 2010.
Meanwhile, back in Mid City….
Good news from READ Director Thompson: SANDAG has requested use of the two parcels adjacent to each of the SR-15 overpasses at El Cajon Boulevard and University Avenue as staging areas for construction of the CenterLine Rapid Transit Stations. This is anticipated to be an 18-24 month temporary lease.
[A] number of committee members had asked “why now, of a sudden is this so important that the principal community planner and the Director of Real Estate Assets and a key aide come here tonight telling us they are excess to the purposes of the city and we have to move them along before the rest of the CenterLine Transit Oriented development is considered? What is the urgency?
She noted that the use of these two parcels for construction staging areas gives the community the opportunity to “engage local developers to gauge their interest before we again consider these 2 properties for sale in another 2 years or so.” She made it clear that it is not READ’s role to pursue redevelopment potential on these properties.
These two parcels are among 8 vacant parcels adjacent to the CenterLine stations. One referred to as the “Sally Wong Property” has been boarded up for several years after purchase from the City by the Redevelopment Agency (RDA). One other vacant land parcel on El Cajon Boulevard was also purchased from the City by RDA prior to the state’s dissolution of redevelopment.
These former RDA properties are each the subject of a “Long Range Property Management Plan” submitted by the City to the State of California with request by the RDA “Successor Agency” for the City to be able to retain for future development. The plan cites results of a “SR-15 Mid-City Bus Rapid Transit Station Area Planning Study” which features a “High Density Development Zone” located within the blocks immediately surrounding the freeway intersections and Bus Rapid Transit stations.
Once the State has given approval to this plan, the City would be able to proceed with development proposals. What is not clear in the meantime is which department or entity will be in charge of that process. Candidates include the City Economic Development Department and the City-owned non-profit Civic San Diego. The latter agency has been the topic of considerable discussion over the last several months at the San Diego Free Press.
At the June 10 Committee meeting, Jim Varnadore, former long time chairman of the CHAPC described the importance of all of these parcels to be assembled in a comprehensive, coordinated, transit-oriented mixed use project that complements the investment in the new CenterLine Stations.
Earlier at the CHAPC meeting a number of committee members had asked “why now, of a sudden is this so important that the principal community planner and the Director of Real Estate Assets and a key aide come here tonight telling us they are excess to the purposes of the city and we have to move them along before the rest of the CenterLine Transit Oriented development is considered? What is the urgency? “
Open, open, closed.
A concerned citizen familiar with the territory visited the lonely little open space parcel which was later discovered to be on the excess sales list as “46th Street between Myrtle and Dwight” and hiked into what is called the “47th Street Canyon.” Kids from nearby Monroe “Bookie” Clark Middle School were heading home along the public right of way called a “paper street” because it is where the actual 46th street ends. Others were crossing the canyon to the East along the Myrtle Street right of way. At Myrtle and 46th Street Coldwell Banker for sale signs were posted for houses on the corner and farther up the paper street nearly to the city-owned parcel.
47th Street Canyon starts right about at the subject parcel and heads southeast all the way to City Farmers Nursery at the corner of Euclid and Home Avenues. It is also known to the community and San Diego Canyonlands as “Olivia Canyon” for the late Olivia Marlow who fought against development of more apartments in City Heights canyons in the 1980’s and probably led the effort for acquisition of this parcel and much if not all of the city-owned open space in her namesake canyon.
Current resident Lisa Matt who helped care for Olivia in later years related how she had addressed the City Council and then Councilman Uvaldo Martinez in particular about development on another nearby canyon: “You are not going to develop (more apartments) in that canyon or any other canyon in our community!” Lisa noted that younger families are moving into the neighborhood and like to hike down Olivia Canyon to Nate’s Deli at City Farmers Nursery and they participate in regular canyon cleanups.
San Diego Canyonlands organizer Linda Pennington, a long time canyon protection advocate and Executive Director Eric Bowlby were surprised to hear about the proposed sale of that parcel. Bowlby noted that “canyon open space drainage areas serve as filters for storm water and should be retained in city ownership for water resource improvements and access.”
The response to inquiry at the June 10 meeting and subsequently regarding what was the need and efficacy of selling a parcel that had previously been specifically acquired by the City for the purpose listed as “open space” was a recitation of some of the same criteria listed in the policy — place back on the property tax rolls, reduce maintenance costs, put money in the City “Capital Outlay Fund.” What seemed to be missing was the recognition of the value of vacant land as open space as an “element of the General Plan”.
The Mid City Communities Plan last updated in 1998 lists goals and recommendations for parks and open space. Among them are the following: “Ensure the preservation of an open space system through appropriate designation and protection….Property acquired by the City for open space preservation should be officially dedicated for that purpose.”
So here again the question arises, who determines the “greater public benefit”?
The Mid City communities, and most especially City Heights, are among the densest communities in the city and are notoriously deficient in open space and parks facilities. On the recent hike we observed a number of tributary trails and a great variety of vegetation which no doubt provides important wildlife habitat as part of the Chollas Creek watershed. Along the way you see official City parks department signs posted for “47th Street Canyon”. They have prohibitions against the usual undesirable activities – dogs off leash, littering, dumping, motorcycles, firearms and fires.
The only thing missing is a number to call if you happen to see a sign along the way that says: “City-owned Open Space For Sale”. And it turns out that we may see one of those signs soon. The 60 day “Mandatory Governance Review Clearance Process” for the parcel in Olivia Canyon expired on June 20.
READ states that the City Parks and Recreation department did not consider the site to be a good candidate for a future park. Appraising its value as part of an open space system that helps pump oxygen into Mid City San Diego with input from the community will have to wait.
The next step is to make the property available to one of the five “qualified” commercial real estate brokers listed in the excess properties power point presented to the Council Committee.
And now the global view.
The fact that “the world’s largest privately held real estate firm” (you might remember that phrase from a few paragraphs back) is on the qualified brokers list doesn’t help us breathe any easier in the smoky San Diego civic theatre. But then they are in good company, or rather in a new company. Cushman and Wakefield actually has been acquired by “DTZ” just last month.
DTZ is part of a global consortium now operating under the TPG (Texas Pacific Group) Capital, private equity consortium. DTZ traces its roots to the 1780’s in Birmingham England. The other four on the list are also global real estate and/or private equity power houses.
Whoops, this just in, its only three others. The same consortium acquired Cassidy Turley last December. And another listed broker firm, Jones Lang LaSalle aka as JLL looks like it is merging with somebody, as well. That might narrow it down even further with the other qualified companies including CBRE a long ago spinoff from Coldwell Banker that merged with Richard Ellis (who also started out sometime in 18th century London) and, finally Colliers International.
Whew. Are you getting dizzy yet? Don’t worry these guys came out of Australia and Texas and England and have lots of Asian money connections. Just another brick in the Trans Pacific Partnership wall.
Program all that into your who-knows-who/what-makes-the-world-go-round search engine and hold tight.
Jay Powell served as Executive Director of City Heights Community Development Corporation from 1992 to 2011 and as Conservation Coordinator for San Diego Chapter Sierra Club in the 1980’s.