San Diego—On the morning of Feb. 11, the street was packed in front of a new 12-story high-rise here.
More than 100 people gathered to watch developers and local officials cut the ribbon to open 16th & Market, one of the first apartment buildings associated with Ballpark Village, a massive planned mixed-use development.
But the rest of Ballpark Village will have to wait. Its developers, who agreed to help create 16th & Market as part of a community benefits agreement with local officials and community leaders, are struggling to find a construction lender and a hotel company to partner with for the rest of the development.
Located a few blocks from the main Ballpark Village site, the 136 units of workforce housing at 16th & Market are reserved for low-income renters. The ribbon-cutting ceremony featured a priest from Father Joe's Villages—a nonprofit affordable housing developer—who introduced a grateful new resident; representatives from the funding organizations, including U.S. Bank and the Federal Home Loan Bank of San Francisco; a bishop, who applied holy water to the building; and the for-profi t developers, who donated $17 million and the land on which to build the $45.9 million high-rise.
Those developers, JMI Realty and Lennar Homes, plan to build 3.2 million square feet at Ballpark Village, including 900 luxury condos, 50,000 to 75,000 square feet of high-end retail space, and a 2,000-room business-class hotel on 7.5 acres between the Petco Park baseball stadium and San Diego's convention center.
As of February, the development partners were looking for a new hotel operator after Marriott Hotels walked away from the deal in August 2008. The task is made more complicated by the capital crisis, which makes it difficult to be sure when construction could potentially start once a new hotel firm signs on.
“No lenders are talking right now,” says Jim Chatfield, vice president for JMI, which also developed Petco Park. JMI was founded by John Moores, who also owns the San Diego Padres baseball team.
However, JMI has no regrets about signing the community benefits agreement or going ahead and building the affordable housing first, says Chatfield.
Finishing 16th & Market should help JMI and Lennar avoid some of the protests and even lawsuits that have dogged other large downtown developments in cities across the country.
“We finally developed that trust,” says John Harder, treasurer for the San Diego Organizing Project, a local community group.
The community benefits agreement calls for JMI and Lennar to develop an additional 35,000 square feet of affordable housing on the Ballpark Village site.
The developers also have agreed to pay their contractors at least $10 per hour with health benefits, and to build Ballpark Village to meet the tough Leadership in Energy and Environmental Design standards created by the U.S. Green Building Council.