Condo, Sweet Condo
(page 1 of 3)A consultant told Keith Fernandez there was no way anybody could pre-sell downtown San Diego condominiums. Fernandez chose to ignore the advice. His hunch was right. Seven days after opening a sales office, Intracorp had banked $5,000 reservation checks from potential buyers of all 52 units in its 235 on Market property. A backup buyer list numbers in the hundreds.
Collecting $5,000 reservation checks is not exactly pre-selling. But to fully reserve an unbuilt residential project in one week would seem to signal two things: a widespread housing shortage and a 180-degree shift to the perception of the desirability of urban settings.
“We had a grand-opening party for our sales office,” says Fernandez, chief operating officer for Intracorp, a local developer with linked offices in the United States and Canada. “We didn’t do any advertising for it—just a sign on the property with our phone number. More than 400 people showed up.”
Intracorp’s Marina District sales quarters might have helped persuade home hunters. The pristine office houses a colorful scale model of the property. There are full-size, fully decorated replicas of bathrooms and kitchens. Salespeople are professional and knowledgeable. But these days, with demand drastically outstripping supply, trained seals on a street corner could fill downtown condo towers.
Intracorp knows a good thing when it sees it. Fernandez says its magical sales office will stay in place as more of the company’s residential offerings go up for grabs. Next for Intracorp is Crown Bay (at K Street between First and Third avenues). This 86-unit building is scheduled to hit the market early next year. Intracorp will simply replace its model of 235 on Market with one of Crown Bay. And before you can say “preapproved mortgage,” it’ll be time to change models again, to Porto Siena, which will be built in Little Italy. Then look for Diamond Terrace, an aptly named project slated for the Ballpark District in East Village.
Bosa Development Company doesn’t have quite as grand a sales office. But that didn’t stop the Vancouver-based developer from reserving 105 condos in just five days. Five days! The best units were gobbled up within hours of unlocking the door.
Bosa is building the twin-towered Horizons project two blocks from 235 on Market. Like Intracorp, Bosa collected $5,000 (which is fully refundable) from folks whose best idea of what their future house might look like was from a tabletop plastic model. And yes, Bosa’s backup list is also in the hundreds.
The 105 condos represent half of the Horizons product (ranging from $250,000 to more than $1 million). Bosa will put its second Horizons tower on sale early next year. (Expect comparable units in Tower Two to go for higher prices—and Tower One wasn’t what most would call cheap.) After Horizons, Bosa will focus on selling Discovery on Cortez Hill, a towering project going up next to the former El Cortez Hotel. Then Park Place, another luxury high-rise slated for the Marina District, will take center stage for Bosa sometime in late 2000.
In all, the Centre City Development Corporation (CCDC) counts more than 25 downtown residential projects (some are mixed use) that either were finished in 1999, broke ground this year or are scheduled to break ground next year. And even more are on the way.
For Mike Stepner, it’s very exciting. “I’ve seen a lot of changes,” says Stepner, a city planner for 26 years before he became dean of the Newschool of Architecture in downtown’s East Village. “San Diego is one of a few cities that has created an exciting city out of a wasteland. To create a 24-hour type of city, you’ve got to have ownership and responsibility. To continue to do this, having residential property and homeowners is critical.”
here are only about 24,000 people living downtown—that is, in the 92101 zip code—according to a 1998 San Diego Association of Governments (SANDAG) study. About a third of that number, however, is made up of what’s called “group quarters population,” which includes shipboard Navy personnel, homeless people and prison inmates.
This economically undesirable bloc represents a fascinating contradiction to the targeting of affluent homebuyers. But the SANDAG numbers do reflect the new popularity of living downtown in this sense: While the total population of 92101 has increased 11.6 percent since 1990, the group-quarters contingent has dropped 7.8 percent.
For years, CCDC has stated the goal of having 50,000 downtown residents by the year 2025 (excluding the incarcerated, presumably). Looking at the current rate, progress and promise of homebuilding, many observers believe that goal could be reached sooner. Former CCDC chairman (and mayoral candidate) Peter Q. Davis now believes downtown will house 100,000 people by 2020.
“I think we’ll have 50,000 people living downtown within the next 10 years,” says Laurie Black, Downtown San Diego Partnership president. “I believe downtown is way ahead of that CCDC goal, even though I know there are still people who live 10 miles from downtown who haven’t been here in 10 years. For some, it’s not in their consciousness.”
But those people, claims Black, are offset by two other groups: empty-nesters willing to sell the house in Point Loma after the kids have gone off to college, and young entrepreneurs who don’t care to live in Poway and commute to downtown. With help from these folks, Black says, San Diego is “on the cusp” of becoming a 24-hour city.
“We know there are those who’d like to keep this a quiet little tourist town,” adds Downtown Partnership Vice President Michelle Brega. “We have 8-hour days [of activity] during the week. But there aren’t enough people living downtown yet to sustain the after-hours restaurants or all the other businesses. From 5 p.m. to 7 a.m., there’s not enough activity downtown.”
Not yet. But “intensification of the urban core” is a top priority of San Diego City Councilman Byron Wear. “I’m looking at the big picture,” says Wear, who represents Council District 2 (and is also running for mayor). “If we can get people to live and work in the urban core, one thing that does is cut down on the number of cars out there on the freeway system.”
Wear says if CCDC’s residential goal is going to be met, then it’s already time to start thinking about other infrastructure needs—especially schools. To that end, he says he’s had “a discussion” with San Diego Schools Superintendent Alan Bersin about creating a new elementary school. Wear also says that he’s aware of a charter school plan involving the Marina District’s Children’s Museum. A mixed-use plan there, he says, would include a new building for the museum and residential units on upper floors.
There’s room for residential property all over downtown, adds Wear, from the North Embarcadero and along Pacific Highway, to Cortez Hill and Park Avenue, which runs from downtown up to Balboa Park. “What we’ve seen in the Marina District has really cast the die,” he says. “That area has generated a lot of for-sale product. It’s really kick-started the rest of downtown for residential.”