From Boomtown to Boring and Back

Forbes named Chula Vista the sixth dullest city in the country. But its recent dramas—a housing crisis, city council catfights, shaky development projects and hand-wringing over a new Chargers stadium—make for a plotline that’s anything but boring.

IT'S AN EERIE WALK through the gorgeous lobby of Chula Vista’s three-and-a-half-year-old city hall. The quiet is indicative of the number of empty desks and cubicles, the inanimate evidence of several years of financial strangulation at the epicenter of the housing mess. Occasionally, a handwritten note is propped up on the receptionist’s desk telling visitors to pick up the nearby phone to call the person they’re there to see — if that person is still working there. This, in the boomtown that only five years ago seemed to have everything going for it.

Just last December, Forbes magazine listed Chula Vista as the sixth-dullest city in the country, based on the number of news stories about it in big papers like The New York Times. If the reporters for those bastions of journalism had walked through this South Bay city hall on a recent Thursday, the quiet would have confirmed their Web searches.

But based on what’s really happening in this city of more than 200,000, The New York Times and The Wall Street Journal still suffer from the “No news west of the Hudson” syndrome. Because nowhere else in San Diego County is there more action.

And nowhere in the county is the economic disaster more evident than in Chula Vista. The housing-fueled train that was Chula Vista’s ride to the big time has derailed in a big way. It’s a city where thousands and thousands of new homes — and the development fees they generated in the early years of the 21st century — gave city leaders the wherewithal to finance a new city hall and police station; paid for roads and parks; and primed the planning for an eastern urban center, a university campus and an energy think-tank. All that cash also reignited a 40-year mission to develop Chula Vista’s stagnating bay front with a big hotel and convention center. And then there was the on-again, off-again courtship with the San Diego Chargers, wooing them to put their new stadium along the bay.

Dull? You gotta be kidding.

City Hall Follies

If marriages dissolve over money issues, Chula Vista’s councilmembers need family counseling. The five-member council squabbles incessantly, with Mayor Cheryl Cox coming up on the short end on most decisions as the majority, led by Deputy Mayor John McCann, wrangles over how to reduce a $20 million deficit in the new fiscal year. In the smoking debris, the city’s workforce has been reduced by 24 percent (returning to near-2004 levels of just under 1,000, including police and fire); two labor unions have agreed to give up cost-of-living raises for two years; and many working at City Hall find themselves handling more than one job.

“When Mayor Shirley Horton left office [in 2002], this city had a reserve of $31 million. When I took office in 2006, we were down to $10 million,” Cox says, laying the blame for free-spending firmly on former mayor Steve Padilla and his council, who racked up nearly $270 million in bond debt and dramatically increased general operating budgets as Chula Vista went for the boomtown gold. (Cox, a longtime teacher, school board member and wife of former mayor and current county supervisor Greg Cox, surprised many when she beat Padilla, largely over questions of his spending from city coffers for what she considered personal perks, such as a bodyguard at $10,000 a month.)

In the meantime, five city managers have come and gone over the past five years. A couple of them moved on, say sources, because they were being micromanaged by a council majority that wouldn’t see reality. Former city manager David Garcia was fired in September 2008 after officials discovered inappropriate images on his work computer. Further details have not been revealed — and likely won’t be, since every one signed a nondisclosure agreement when Garcia took a $131,000 settlement to go away. But some believe he was targeted by councilmembers unhappy when he was the first to issue a financial wakeup call as the housing meltdown took hold.

As the money has dried up, the city’s steadily shrinking $165 million budget, despite drastic cuts, will be $23.9 million in the hole over the next two years.

“The city has been deficit spending year after year, even in the best of times,” says Lani Lutar, president and chief executive officer of the San Diego County Taxpayers Association. “What they haven’t addressed is the core of the problem: personnel compensation. Escondido, the city of San Diego, the county of San Diego — they’re all at least trying to deal with that. The city of Chula Vista has done absolutely nothing to address its pension costs.” She says her analysis shows pension costs in Chula Vista have skyrocketed nearly 600 percent since 2001, making up almost 9 percent of the city’s operating budget in 2007.

In an effort to make up for the shortfall, officials scrambled to be among the first in line for federal stimulus money. Their wish list amounted to more than $500 million. When they found out they couldn’t apply for some of the projects they’d envisioned, they reworked the list. As of late May, the wish-list total was down to $76 million for “shovel-ready” projects.

Listen Up, Politicos

Chula Vista’s growth in the past few years has also generated a backlash in the community, with citizens groups letting the council know that the rush to redevelop the older parts of Chula Vista was too much, too soon. The efforts of activist Earl Jentz short-circuited plans for a high-rise on the west side of town, and he continues to give voice to longtime residents seeking to slow the whirlwind of development in Chula Vista — if the economy hasn’t dampened it first.

“I think there’s a lot of interest in moderate growth,” says Jentz, who’s been in Chula Vista since 1976 and owns dozens of properties. “I think it has finally gotten through to the city that they can’t do everything. I’m not an obstructionist; everybody’s got a right to have a say.” Jentz is trying to get a five-year, 0.75 percent sales tax alternative onto another ballot (the proposed 1 percent city sales tax was defeated in May’s election) and says the city needs to renegotiate labor contracts and look into outsourcing to solve its money troubles.

His voice, however unpopular with some at City Hall, is downright restrained compared to some of the screaming matches the council has endured at its meetings. The level of political discourse at times has hit shameful lows. A surprised Mayor Cox was aghast to hear herself addressed by a member of the public as “Your Fatness” at one particularly heated meeting.

“What does that tell you about how some people deal with what we’re facing here?” she says. “Somebody has to be the adult here. We need to keep going forward; I want to see the strength of Chula Vista in its jobs and build a community that can sustain itself. We have to move forward to do that.”

McCann, the council’s only opponent to the 1 percent city sales tax, argues the tax was a killer to that goal. “We need to get back to basics, to transform city government into a more business-friendly organization and be able to focus on core services. If we have money to do six things but we’re doing 10, we have to cut what we don’t do well. Why do we provide services for animal shelters for [three other] communities, at a loss? It’s not a good way to do business. Now’s the time for us to rise above politics and make rational decisions.”

McCann, widely seen as a potential challenger to Cox, is happily courting Republican support.

The Bayfront and the Chargers

In late 2008, a much-ballyhooed deal with Gaylord Development for the bayfront caved in over coastal regulatory and/or labor issues, depending on who you talk to. Gaylord may be out, but Cox and others are looking forward to the time someone will be able to develop a proposed hotel and convention center on those 550 acres west of Interstate 5. The Port of San Diego, which controls the land, restarted the environmental review process early this year at Chula Vista’s urging. Port officials say they’re working with Pacifica Companies on another hotel site on the acreage, just to get the project going.

In early May, Cox moved to force Chula Vista Port Commissioner Mike Najera’s resignation from the board that controls the bayfront acreage. Najera, she said, hadn’t done enough to get the project off the ground. Najera saw the move as payback for a fund-raiser he had hosted for Steve Castaneda, a political challenger of Cox. She denied the accusation. Cox did take credit for Najera’s eventual resignation, but no one has come forward to explain why. The imbroglio further isolated her on the council.

Early this year, Cox got into a verbal skirmish with Chargers special counsel Mark Fabiani over a possible football stadium just south of the hoped-for hotel and conven tion center development. She questioned the team’s sincerity about whether the Chargers really wanted a stadium in Chula Vista. Harsh words from both sides ensued. Although McCann heads the council committee dealing with the Chargers, Cox and Fabiani are making nice now.

“The mayor’s in an unfortunate situation in which she’s the odd person out — and she doesn’t like it,” says Fabiani. “She’s never been a fan of our project, but we always deferred when the Gaylord project was on the table. The bayfront site is still of interest. But if we had to finance it today, we couldn’t do it. We’re keeping at it, though. No one believes this economy will last forever.”

The Chargers have not, Fabiani says, given up on the idea of a stadium where the old South Bay Power Plant now sits, along with hoped-for development on several hundred acres in southeast Chula Vista to support a university Cox and others still envision there. Surrounding that land? Aha! More houses. Acreage still exists for as many as 16,000 new homes on land owned by several developers who are hampered by the current economic climate.

The Big, Bad Slide

When the housing bubble burst, it splattered all over Chula Vista. As recently as mid-April, Web sites that track such things showed more than 4,000 Chula Vista homes in or near foreclosure — among the highest rates in the county.

Yet precisely because home values have plummeted, as more and more distressed properties come on the market, real estate professionals are busier than ever, often getting qualified first-time buyers into homes selling at 40 to 50 percent of their purchase prices a few years ago.

“Sure, it’s a challenging market, but it’s amazing how many times a property has multiple offers. There are a lot of buyers who now qualify for traditional loans or FHA loans, because the values are low enough to use FHA financing,” says Pat Russiano, president of the Pacific Southwest Association of Realtors. She predicts that won’t change soon, as more foreclosures hit the market. “But as far as sellers go,” she says, “if they have equity in their homes and are not in trouble, very few are putting their homes on the market.”

So the big-time media mavens back East may continue in their ignorance of this noisy, messy drama out here on the Left Coast. But at home in Chula Vista, where politicians are scrambling to recover the city’s fading boomtown promise, life has proved anything but dull.

Illustrations by Daniel Vasconcellos

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