Wednesday, July 2, 2008 | An arm of the city of San Diego’s Redevelopment Agency has re-awarded the rights to develop the Valencia Business Park, a vacant plot of land in southeastern San Diego, to a Los Angeles-based developer. But the proposed purchase price is $1 million less than the developer, Pacific Development Partners, was due to pay a few months ago, despite planning to build the same project on the land.
While not yet finalized, the decreased price tag comes despite the fact that the land is now likely to be rezoned for commercial use from industrial use, a move that experts said could double or triple its value from the price originally negotiated with the developer almost three years ago. Land’s value is directly tied to what government will allow to be built on it, and experts said commercial property is generally more valuable than industrial land.
A consultant involved in the deal said the lower purchase price reflects a vast increase in permitting and other fees levied by the city. But city staff said permitting fees haven’t increased, and said the fees couldn’t account for a $1 million discount. And at least one local real estate expert said the drop in purchase price is a travesty.
“What? It should be more valuable,” said Gary London, president of the London Group Realty Advisors. “Obviously, somebody at the city has made a ridiculous decision.”
“There is no rationale for this other than pure incompetence,” he added.
The Southeastern Economic Development Corp., an arm of the city’s Redevelopment Agency, which is overseeing the project, broke ties with Pacific Development Partners on the project earlier this year under pressure from the City Attorney’s Office and Councilman Tony Young.