Once proposed as a boutique hotel, building set to become a pharmacy

Por Ashley Mackin | Editor SDUN

Originally proposed to be part of a boutique hotel, the vacant building at 301 University Ave. in Hillcrest will become a Walgreens before the end of 2012.

Bruce Leidenberger, one of the three co-owners of the property, proposed the space be made into a hotel in late 2007, but had difficulty getting the proper financing. At the time, Leidenberger’s business partner explained the proposal to the Uptown Planners, which was approved with all 13 board members in favor.

Soon after, Leidenberger said, “The market just took a nose dive.” He added, “We had gotten the approval, started the work on the architecture and then… it was almost weekly that there was more bad news on the hospitality sector.”

Leidenberger continued, “Effectively all the investment dollars and capital left the market and you could not get financing, which today you still can’t get financing for a new hotel. That kind of put an end to [the hotel proposal]. Since then we’ve been operating it just as it had been, as a vacant medical office building. The medical office building needs a lot of work to put any kind of new tenants in, so we were just operating the parking lot on that parcel,” he said.

Benjamin Nicholls, executive director of the Hillcrest Business Association, said he is disappointed by the decision to allow Walgreens to develop the building. “It’s disappointing that a piece of property that had so much potential and caused so much heartache is going to end up being something that Hillcrest doesn’t need,” he said. “We need more professional office space, more parking, more boutique retail and more tourists. We don’t need another drug store in the middle of a parking lot.”

Other similar pharmacies in the area include a CVS located at 3151 University Ave., a Walgreens located at 640 University Ave., and a Rite Aid located at 535 Robinson Ave., all in Hillcrest.

Nicholls added, “I am nervous that this kind of thing is the future for Hillcrest. I am worried that creative designers and developers are looking past Hillcrest at other neighborhoods like East Village, North Park and Golden Hill.”

Leidenberger said, “It’s a good deal, relative to the economics of the overall property…. Would I have liked to see more intense development there? Sure, but at this point in time that’s not really going to happen. The economic conditions are still such that it is very difficult to get finance for any kind of new development.”

Representatives from Walgreens had contacted Leidenberger and his co-owners about utilizing the space after the market prohibited the hotel development.

“We had chatted with them,” Leidenberger said, “and sent some letters of intent back and forth and kind of came to some terms, but we just didn’t think it would go anywhere…. Then, a year and half went by and they came back again and this time with more interest and one thing led to another and a deal was finally struck.”

The permitting process has not begun, but Leidenberger predicts Walgreens will submit the permit proposals to the City’s building department at the end of January.