Between 8th and 9th avenues and J Street downtown, there’s an empty space on the bottom floor of the TR Produce Building.
Jason Kulpa, CEO of Underground Elephant, an enterprise software company that provides companies a platform to generate sales leads, wants to put his 85 employees — and many more he wants to hire — there, but the city won’t let him. The issue: He doesn’t sell food or beer.
He will need special permission, and that will take time.
Downtown boosters have been talking up the city’s central core as a garden where tech companies should plant their seeds. But Underground Elephant’s struggle to move into an attractive, funky space is one angle on a bigger problem with that dream: Downtown doesn’t have the space or the old buildings that seem to have captured young entrepreneurs’ imaginations.
In fact, Class A office space in general has suddenly become a limited commodity throughout the city’s urban core.
At the same time, a much-anticipated project on the frontier of East Village gentrification, the IDEA District, promises to solve a lot of this. But it needs tenants to persuade lenders to pay for construction. It’s finding it hard to get tenants to sign up.
We Stand Up For You. Will You Stand Up For Us?
Cisco CEO and walking global economic barometer John Chambers believes that the rapid pace of change in the technology industry is going to create a bloodbath for the major tech players, and every other company on the planet.
We can speculate on how this will translate locally, but the fact is there is a trend of tech companies that are expanding in urban settings. http://www.bisnow.com/commercial-real-estate/national/1533-will-tech-go-vertical/
City planning must be done with a look to the future. if you want a lively, pedestrian oriented downtown, you may have to put up with vacant space zoned for restaurants and retail for awhile. A lot of office space at ground level is death for a downtown. Again, look at Houston.
I'm new here, I'm liberal but I'm in favor of smart growth that will benefit our city's future.
Why do I get the impression some of these commenters up in here want to welcome Cliven Bundy and his supporters to bring his cattle on down to Balboa Park to graze. For free.
Let's play "how backwards can we make this town".
@ZachW I don't think it's that black and white. I think we're talking about the fact that it shouldn't take San Diego 10 weeks to consider swapping a commercial tenant (tech startup) for a retail one. We want a good mix of businesses and residential downtown and we need to make it easier for a startup to set up shop downtown by making the approval process smoother.
Do we need to be prudent about our growth? Absolutely.
Does a slow and hard-to-navigate process for making exceptions and getting approvals make us prudent? No way.
Look at how long it took to get urban gardening changes approved by the City Council. The people who are in charge of these processes are generally resistant to change, for better or worse. But unless we make some much needed to changes, we will continue to lose new business like software startups (that typically treats its workers very well, brings more taxable revenue back into the city and is often a better steward of the environment and community than bigger, older businesses).
It is reasonable to ask why do these tech firms need ground level space. While the restaurant and retail demand may not be high today, it will be as the downtown residential population grows. Zoning for an interesting ground level environment for pedestrians is smart. One only needs to look at the ugly, blank wall environment of downtown Houston to see what ground level office space does to a city.Ultimately, if the demand for office space is there, new buildings will get built. Scott should have looked into the amount of available downtown commercial land to see if we are incorrectly zoned..
The TR ground-level space has been vacant for many years.
Sure, in a perfect scenario restaurant/retail space would be preferred there, but if the choice is a business or boarded up abandoned building then I choose business.
Give them a 5 year lease and if restaurants are interested in 5 years don't renew it.
@ZachW City planning needs to be done with a vision to what you want your city to ultimately be. Sure, there may be vacant space for awhile if you want restaurants and retail. But, if you envision a growing, pedestrian oriented city, you do not want a lot of office space at ground level.
@bgetzel @ZachW Office space doesn't necessarily mean "blank wall." We have plenty of businesses downtown that have big windows to the street so people can see the work going on inside and get the sense that downtown is a thriving place to be.
Zach hit it on the head: 5 years is a significant amount of time. If retail were to happen it would have, and a lease restriction opens the possibility up again in the future.
We have to balance vision with reality.
Once the Ti's are in for office space, it is unlikely that it will later become a restaurant. Ground level office is as bad as a blank wall - watching people at desks or closed blinds gives nothing of interest to pedestrians. With several thousand units currently under construction downtown and the downtown projected to add 20,000 more residents by 2025, retail and restaurants will ultimately flourish.
For all the progress that the younger tech community is making in San Diego it would be be such a bummer if the city doesn't help clear a path for it to grow downtown. The startup tech community wants to be downtown. Projects like Maker's Quarter and I.D.E.A. District need to to help make it happen by supporting it much like The Irvine Company has helped attract tech startups. The Irvine Company is providing free space for startups in one of the most central downtown buildings as well as many co-working spaces downtown to encourage growth. Sure The Irvine company is somewhat self serving, but the startups are not obligated in any way to rent from Irvine Company when they are looking for new space.
@Blair Giesen Totally agree! The Irvine Company project, EvoNexus, is novel in that it's got a free incubator and doesn't ask for equity or commitment post-incubation. I'm a software developer and have been moving North with every job I take (UTC, Del Mar, Cardiff). North County will continue to attract tech startups unless San Diego gets serious about attracting companies to set up in downtown. I live in Taldmadge/College Area and would LOVE to work downtown.
@vosdscott Liberty Station has the same issue. can't have traditional office space on ground floor of historic bldgs.
I'd like VOSD to report on why some non-profits are allowed to hog Downtown retail space and leave it empty. Just two examples near each other, on 5th Ave. Every since the New Palace Hotel was rebuilt after its fire, by Mayor O'Conner's twin sister as senior housing, the storefronts have been empty and "for lease". None of them have ever had tenants. This has been way more than 20 years. What are their intentions, and what realtor is so stupid to have his sign up and fielding calls for 20+ years, when he knows that a deal will never be made. Or is this just free advertising for him for other locations on the front of a non-profit. Same thing with the St.Paul's Book and Media Center just to the south: abandoned for 20+ years, owned by the Catholic Church, don't they need the rent money for some charitable usage?
I live downtown, and I do think the area is oversaturated with restaurants. I see them going out of business on a regular basis and the spaces staying vacant. For example, Red Pearl Kitchen at 4th and J went out of business Dec 2012 and is still vacant, despite a great location.
Retail businesses are hard to pull off downtown, owing to high rent overhead. With increased use of internet shopping, I just don't see much success in attracting future retail ventures downtown.
(Except for a future Trader Joes. Build it, and we will come!)
I hope the Powers that Be will be more flexible in approving different uses for empty downtown office/retail space. Nothing makes a community more vibrant than filled ground floor businesses, as opposed to years of empty ground floor space.
City planning and zoning is too restrictive and not just in downtown.Their policies are actively stifling business elsewhere.
Two years ago we were looking for locations to relocate and expand our veterinary practice. We found a location in sub-area C of the former Grantville redevelopment project area. Our business plan would be mixed-use, and would include veterinary and other pet-related services. The location was a former restaurant.
Our realtor contacted the City about the zoning. The word was the location was zoned for the prior use, other uses were very limited and definitely not veterinary or anything pet-related. The planner informed the realtor the zoning was created by an earlier council person and was “carved in stone.” We ultimately relocated to another space with a much smaller business plan and a smaller investment on our part.
Today our first-choice location still sits empty. Fewer local jobs were created. And the total economic impact of our relocation is about one-fifth of what it could have been.
By the way, as part of the Grantville community plan amendment, the City is looking to apply very restrictive zoning to our current location, which excludes practically any business use, especially veterinary. But, they tell us our current use will be “grandfathered.”
Scott - it seems you wrote this story on Monday and failed to read the news on Tuesday -- IDEA 1 announced its first tenant this week, and is in talks with several other interested tenants for the launch of IDEA 1 in 2015.
To your question Mr. Jones: "What is the need"?, respectfully - JOBS!, as well as an urban environment that is live/work. Check out the reverse commute that happens every morning and every evening of young people who want to live downtown but work on the Mesa - now imagine a walkable city, where young people don't have to get into cars and clog our freeways - but rather can walk or bike to work.
I don't think anyone views this project as "trying to be LA" -- far from it. IDEA District is a bold vision that hopes to allow like-minded companies to congregate in an urban setting - providing opportunities for collaboration and inspiration.
Let's think BIG San Diego - and support initiatives that push this city forward.
@aberchtold Do you have a link to that news?
with all do respect, you seem to be stuck in a different era. You don't seem to grasp the fact that today young educated professionals are more mobile than ever before.
They don't want to live in the suburbs, they want to live in dynamic urban environments.
They aren't tied to a specific place as much as in the past, they will go where the environment is more geared to their lifestyle even if it means moving away from where they grew up.
You have this idea that San Diego as it exists now will appeal to these people, and you think they will flock to places like Sorrento Valley.
I can tell you they won't.
If we want to attract tech, our current suburban tech hubs will not attract the best candidates.
We need something like the IDEA district.
I'm with Malmuth, things are going great! There IS an I.D.E.A. District planned and it WILL be built because of the demand for it. It may not happen fast enough for some but it will happen. The City is a bunch of rules created by us citizens, so those rules can be followed to allow more Bumblebees to keep the buzz going.
Kind of ironic that the county office occupancy rate is the lowest since 2009 according to the CoStar group...
yet the city has a shortage.
Moving out of the city urban core may become a more attractive option.
Companies will locate where it makes sense. If the availability and cost of downtown becomes too restrictive they will look elsewhere.
The assumption here with most posters is that downtown is Mecca and the only real option.
I guess If people and companies are willing to pay a p[remium for it it will be provided.
On the other hand though If companies feel they can do better financially in out lying areas the tech growth will naturally evolve there.
@Mark Giffin Building office space downtown makes sense for two reasons.
1. Companies want to be where their workers live.
2. Building walkable office space is cheaper than widening freeways.
“Unfortunately, downtown doesn’t have lots of cool old-building options like San Francisco and other cities” - - look around at all the recent surface parking lots. That's what's happening to our funky creatives spaces. What's worse, Civic San Diego and City Council are letting it happen in spite of clear rules and policies in the CCPDO and Community Plan against demolitions for surface parking lots. Please sign the petition: City of San Diego, Stop demolition for parking lots! . . .
This city is schizophrenic. It can't decide if it wants to attract youth and innovation or scare it away. More and more I think there are two San Diego's.
I am young (30's) and am a huge supporter of growth, innovation, and urban development. On one hand our city supports this through support for things like IDEA, craft brewing, funding the trolley extension, etc. On the other hand, the city sits idle while businesses flee, and NIMBY's attack the trolley and mere 60ft buildings around trolley stations.
The people that oppose those things seem to be aging boomers that believe that the city is a place frozen in time, and that it is an assault on their birthright to build anything within view of the house that they bought 50 years ago. These people do not see the city as something they are a part of, but instead their personal sanctuary.
These NIMBY policies are directly responsible for the housing shortage, stagnated development, and the chasing away of young talent that wants affordable market-rate housing in a walkable dense, transit friendly city.
I can't see how anyone could complain about a 60ft building. If I was Bill Fulton I would have proposed something much taller. Bottom line is that this city will not change, and projects like IDEA will not succeed if we are guided by the vocal NIMBY minority that thinks that San Diego is Santa Barbara and will aim to thwart development everywhere but a square mile downtown.
I wish these obstructionists would retire and move out of town, or get out of the way. These selfish positions are ruining life for the next generation. I encourage that everyone that agrees with me to fight back and be louder than the opposition.
@Jim Jones @spoonman San Diego is already very much like LA, but building higher density in the central areas of the SD will mitigate the long traffic filled commutes, which you associate with LA. Yes, it would add more people to these areas, but it would help preserve the far out suburbs.
Too keep this city from stagnating, more housing is needed just to support the native populace. In fairness, where would you recommended building an area of high density housing (not sprawl) that is near transit, but does not affect your sensibilities?
@Jim Jones @spoonman It seems funny that you think that density equals a soul-less city. On weekends, people choose to spend their time in places like Downtown, Little Italy, Balboa Park, and the beach cities which are some of the densest parts of the city.
As others have said, your idea of what this city is and should be definitely differ from the views of others. That's certainly OK, but most would call the suburbs soul-less, not the other way around.
@spoonman Someday, each of us will be too old to drive. We should all hope for more transit and walkability. Those who oppose these things are being self destructive, but they won't realize it until they have lost the ability to drive, and that's a real tragedy.
@Jim Jones "plans to densify will result in more traffic"
Tall buildings don't cause traffic. Parking garages do. So if you don't like traffic congestion, to be consistent you must oppose minimum parking requirements.
@Jim Jones @spoonman In all seriousness, where do you want to put people? We either have to build in the backcountry, or add density.
I concede that adding density adds people to an area and can create congestion, but developing the wilderness requires longer commutes, waste of fuel, destroys the natural environment, and causes much more systemic congestion (think of cars traveling 30 miles down the freeways to work instead of 5). The problems that happened with the 15 freeway are evidence of this....people driving all the way to Temecula to find reasonably priced homes.
Give it to me Grammie!!
I'd take the hedonists over the suburban "families" any day.
I see more dysfunctional families, crack houses, drug dealing, cheating and scamming in the burbs of SD than in skid row downtown LA.
You probably think that as long as a soccer mom has a good "doctor" to to sanction her prescription drug habit then she's so much better than the "hedonist" DT who buys it on the street, eh?
@Jim Jones Do you mean Sorrento Mesa? Why do you think that is a better location for tech growth?
@Jim Jones I think what people often misinterpret about the I.D.E.A. District is that this is not intended to replace a Sorrento Mesa tech hub, it's meant to compliment it. In the greater San Francisco Bay area there is the urban office area of San Francisco which has seen huge growth in their tech company community, and you have Silicon Valley as a suburban tech hub. San Diego already has it's suburban tech hub in Sorrento Mesa, but I believe the vision for I.D.E.A. district is to add an urban tech community to San Diego.
@Jim Jones You want me to explain the need of a project that intends to add a new jobs cluster? You see Sorrento Mesa as a better location for tech growth, and there are many people like you that share that sentiment. However Jim, this may be news to you, but there are people out there that are not like you. There are people that prefer an urban environment, in this case for tech companies. That is the purpose of this project, to cater to that unmet need.
The need is clearly spelled-out in the article: young professionals don't want to work in suburban strip-mall business parks like Sorrento Valley.
This is why Underground Elephant is willing to pay premium prices and battle the city for a permit to relocate to East Village.
You seem to have a Golden Girls vision for San Diego that is stuck in the 80s.
Times have changed, and there is a reverse migration by young educated professionals FROM the burbs TO urban cores.
SD can choose to modernize and attract high paying jobs, or choose to not change and become the gigantic retirement community you see us as, but we can't become a tech hub just by saying "we want to become a tech hub". We need to make this a more desirable place to live for the talent required to sustain this industry.
@Joshua Brant @Jim Jones Joshua, I keep hearing that. I also think there is no data to underpin it. What we DO have data on in San Diego is the fairly high percentage of foreign born immigrants with STEM degrees working in Tech in San Diego - many who originate from countries of origin that seem to have a high preference for suburban living with high quality schools and housing which works (and is large enough) for multi-generational families. What I REALLY wish IDEA and Makers Quarter and others would do is get some good survey data on technology professionals who LIVE IN SAN DIEGO. Way too much of this is being driven by anecdote and reading Wired. We need to understand OUR technology-oriented workforce and understand if they are (or are not) different in preferences from their No Cal counterparts.
PS. One this we also do know is that there is a strong commuting pattern of 20 and 30 somethings from MB and PB up to Sorrento. It could be that the "urban" living that is appealing to OUR 20 somethings isn't about cities and the urban core but funky CA beach communities that are close to the ocean.
@Jim JonesDo you find it ironic that you say there is no unmet need for this urban development, and in the same breath you say that there is a "crowd" that prefers density?
@Jim Jones So I misinterpreted your original inquiry about the need for the I.D.E.A. district? You weren't talking about lack of demand, you were talking about smart growth principles? I don't know if I buy that because you finished your last statement by circling back to your lack of vision regarding demand. So, therefor I do find it ironic that you pooh pooh the I.D.E.A. district because you say it lacks demand, and simultaneously complain about a crowd of people that want density.
Developers get their money up front and retire in La Jolla? Is that like your plan to raise the minimum wage to $30 and give everyone a job? There is real risk along with reward in real estate development.
@Jim Jones "Nobody goes downtown anymore. It's too crowded." --Yogi Berra