By Hutton Marshall

Private investment remains on the horizon for redevelopment plan

In June 2015, nearly one year ago, the City Council approved the Grantville Redevelopment Plan, a micro-community plan update aimed at attracting residential development and commercial investment to revitalize the central San Diego community.

The neighborhood’s accessible location and close proximity to public transit have made it, in the eyes of many, an ideal candidate to perpetuate the goal of many city leaders to increase urban density and market-rate housing while decreasing reliance on the automobile. This “City of Villages” strategy would be achieved by creating closed-system communities where residents can shop, work and unwind without driving elsewhere. If the city’s plan for Grantville is realized, the neighborhood could see an increase of as many as 8,000 housing units, ideally with a proportional increase in commercial activity.

To incentivize developers to build housing and commercial space in the neighborhood, the city altered zoning areas to convert portions of Grantville previously reserved for industrial development for residential and commercial property. The city also performed a Master Environmental Impact Report (EIR) for the Grantville Redevelopment Area, which developers say cuts down the time it takes to gain approval and begin construction. Additionally, the city completed its River Park Master Plan to outline inviting development and park space surrounding the San Diego River. Councilmember Scott Sherman said that these efforts have laid the groundwork for development and private investment to flourish.

“The River Park Master Plan will help ensure that redevelopment of the Grantville community will create a wonderful urban setting designed to accentuate the San Diego River,” Sherman wrote in an email. “The major obstacles have mostly been cleared and as individual projects come forward we will have to see if new ones emerge.”

Local leaders caution that new development won’t spring up overnight, but will likely grow over the course of the next decade. Anthony Wagner, a City Planning Commissioner and an Allied Gardens resident active with local community organizations, said that as the economy continues to improve, more developers will see the newly zoned Grantville as a fruitful investment.

“It’s not like a light switch where you’ll all of a sudden see 8,000 multi-family dwelling units,” Wagner said. “It will probably be a progression that mimics that of the economy. As the economy gets stronger, [developers] will probably start dabbling more and more.”

Sherm Harmer, president of Urban Housing Partners, Inc, has an eye for up-and-coming San Diego neighborhoods. He was an early developer in Little Italy, East Village and North Park. Today, Urban Housing Partners is working on a large development on the outskirts of Grantville near the San Diego River. Harmer said that he sees the same potential in Grantville as he did in the now-booming aforementioned communities.

“When we started to look at Grantville, we saw the same type of older neighborhood with good infrastructure, with public transportation, and it was totally in need of revitalization,” Harmer said. “We’ve been looking for places that need revitalization that have potential.”

Urban Housing Partners’ Grantville project is Riverbend, a 996-unit development on the San Diego River, capitalizing on the River Park Master Plan efforts to turn the riverside area into a destination. Riverbend is outside of where most residential redevelopment is planned–within a quarter mile of Grantville’s trolley station–so Riverbend and the nearby developments will seek to create a walkable community of their own, Harmer said.

“It was designed so people could live there, shop there and play there,” Harmer said of Riverbend. “We tried to make it inclusive so you wouldn’t have to use a car, and it could be more walkable. So there’s a trail all along the river to a new project just west of Riverbend.”

While San Diego may have created the infrastructure for Grantville to become a walkable community, Wagner said that systemic housing issues need to be addressed if Grantville and other San Diego neighborhoods are to flourish. He said mounting regulatory and developer impact fees often present an insurmountable roadblock to young San Diegans seeking homeownership.

“I think we need to find a way to incentivize affordable market-rate housing–for-sale housing–over apartment complexes,” Wagner said.

To do that, Wagner said the city should consider lowering the fees developers pay when building market-rate housing. Wagner said that mitigation, developer-impact and other fees can make up as much as 40 percent of the cost of a new home.

“If we wanted to incentivize those landowners and developers to build more market-rate housing to boost our economy … we need to either forgive or in a significant way reduce the amount of the developer impact fee that the developer pays if they build market-rate housing over apartments, and that can be achieved municipally,” Wagner said.

Harmer said there’s another factor preventing developers from building in Grantville in the immediate future: the fear of being the only developer in town.

“What builders want to do in these environments is they don’t want to be the nicest project in town with everything else around them being old,” Harmer said. “Because when you have higher densities, you don’t have the yard space, you don’t have the outdoor conveniences, you have a lot of hardscape and you want to walk to restaurants and dog parks.

“So if you don’t have other people building, and you don’t have businesses growing, and you don’t have A-class restaurants where you have all drive-thrus, you don’t get the change, and no one’s going to take the risk,” Harmer continued.

In the meantime, Councilmember Sherman said that the city has laid the groundwork for development. Now it’s up to developers and landowners to take the next step forward.

“We have created an environment that should foster growth, but at the end of the day it’s up to the private sector to initiate that growth,” Sherman said.

—Hutton Marshall is a freelance journalist and photographer. Contact him at [email protected]