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With all due respect to Carlsbad and the Golden Triangle, Kearny Mesa and Mission Valley, all of which receive scintillating treatment elsewhere in this edition, 1998 is the year of 92101, Downtown San Diego. Starting this month, Golden Eagle Insurance Co. will move nearly 1,000 employees into 525 B Street in the middle of Downtown San Diego’s 92101 Zip Code. The San Diego Unified Port District will open its $238 million expansion and renovation of Lindbergh Field in the northwest corner of 92101, increasing capacity from 14 million annual passengers to 20 million.
Along 92101's front porch in 1998, the Navy should complete a $170 million San Diego Bay dredging and pier construction that will allow not just the homeporting of the USS John Stennis aircraft carrier with its $126 million annual payroll, but eventually will help accommodate three nuclear-powered aircraft carriers, the most sophisticated air-and-ocean-going transportation, weapons and global communications systems ever devised. The dredging, quite conveniently, also will permit deeper cargo vessels in and out of the 10th Avenue Marine Terminal.
Denizens of 92101, the Greater San Diego Chamber of Commerce, the World Trade Center and the Downtown Partnership all will appoint new chief executives early in 1998.
This is the year that Downtown yields the headquarters of $2 billion-a-year Enova Corp. in favor of its $5 billion successor, Sempra Energy, as Dick Farman and some very lucky colleagues relocate from Los Angeles to 92101 to oversee 12,000 employees from here to Greenwich, Conn., a rather cumbersome business compared to the $30 billion of mostly liquid assets managed high atop 92101 by Nicholas-Applegate Capital Management in One America Plaza. (That's 66 percent more than the assets managed by HomeFed or Great American at their peaks.) Nicholas-Applegate's trading room — some 33 stories above San Diego Bay — is one of the most sophisticated financial computer centers in the world, connected with global markets via fiber optics in the most densely fibered commercial neighborhood in America. San Jose doesn’t have this much fiber in the streets. What was it at last count, four carriers, five going down Broadway? Downtown San Diegans certainly put up with enough street-digging in the last 24 months.
1998 might even be the year the expansion of the San Diego Convention Center gets financed and started, ground breaks for a grand central library, the public settles on a new Padres ballpark in Centre City East, and the San Diego Symphony rises from the ashes. Well, it might.
The 100,000-or-so people who work in the "old" San Diego — these six square miles of 92101 that include the Embarcadero, 11th Naval District Command, Seaport Village, the Marina District and Gaslamp Quarter, Horton Plaza and Financial District, the Government Center, Little Italy, Cortez Hill, a portion of Pill Hill, the hubs of all mass transit in the region, Harbor Island and the biggest U.S. airport south of LAX — these are among California's most productive people, often working at a frantic pace in a place infinitely more attractive than Los Angeles and more hospitable than San Francisco.
The airport alone directly contributes to the economy about $737 million annually, including a $257 million payroll for 7,500 people, and that doesn’t count the thousands of employees of Teledyne Ryan adjacent to Lindbergh or Solar Turbines across the street. Pretty nice of the Port District, and mostly the federal government, to finance a 42 percent expansion of Lindbergh's capacity.
So when Chula Vistan David Malcolm, the incoming Port District chairman, talks about selling Lindbergh Field for $1 billion, he’ll only have a couple million people to reckon with, especially the "professional san Diegans" of 92101.
Malcolm toys with the idea and kicks himself, or Port District staff, for not knowing earlier than November that the federal government would permit five jurisdictions in the U.S. to sell their airports to private enterprise without paying back federal grants, as all other jurisdictions still have to do in the event of an outright sale. Instead, the five governments selected by the FAA in this pilot program will be permitted to retain the proceeds of the airport sales and apply the money elsewhere. Only problem is, applications to the FAA were due in December.
If San Diego could sell Lindbergh for $1 billion, "We could build a convention center with cash, a rail line to the east, do all the dredging we needed to National City, and still have a half-billion left over," says Malcolm. "The incredible opportunity has passed, but certainly we’re on watch if the government has any more blue light specials." Then again, there are other ways to privatize Lindbergh, which already mostly is in the hands of private contractors.
Meanwhile, the most remarkable phenomenon will be announced in late January, that unemployment in San Diego dropped below 3.5 percent by the end of 1997. That's virtually full employment, better than the state or national economies, but tell that to the thousands of San Diegans who remain unemployed. The declining jobless rate could not have happened without public and private investments into infrastructure.
No one doubts the thousands of jobs created by the expansion of Lindbergh. You could see the workers there daily, demolishing, grading, pouring, building, planting and polishing. Kiewit Pacific handled the roadways, including the sweeping bridge that finally introduces arriving passengers to a spectacular view of the Downtown skyline in a way that the old Harbor Drive missed. Douglas E. Barnhart Inc. served as general contractor on the terminal portion. That alone, a $52 million segment, employed 360 people on site. They poured 31,000 cubic yards of concrete, erected 4,700 tons of steels, creating 297,000 square feet of building space that will be occupied by a growing number of airline employees, concessionaires, security and sanitation personnel and travelers. Someone ought to publish the names of every single person who worked on the project.
Just the San Diego subcontractors alone make an impressive list: A.O. Reed & Co., Audio Associates, C&B Steel, Alonzo Painting, Applied Waterproofing Technology Inc., Cal Dor Specialties, Astra Flooring, Center Glass, Eagle Steel, Fine Welding, Fireproof Coatings of California, Daley Corp., Grinnel Fire Protection, Hester's Granite Co., Hurricane & Poway Fence Co., San Diego Sheet Metal, T. B. Penick & Sons, Quality Reinforcing, Mission Pools, Rayco Building Specialties, Vic Ross Masonry, National City Hardware, Office Pavilion, Otis Elevator Co., Sierra Pacific West, Spring Valley Insulation Contractors, J.P. Witherow Roofing Co., Western Tile & Carpet and Thyssen Electric.
Despite their hard work, the newly expanded airport may reach capacity again in 10 years. While businessman Malin Burnham negotiates with the mayor to establish a joint powers authority to plan, develop and possibly operate a much larger airport elsewhere in San Diego, the Port District has employed consultants and commissioned two advisory panels, one composed of technical experts and the other comprising citizens from all walks, to develop a master plan in the event an alternative to Lindbergh Field is not identified and Lindbergh must be expanded again.
The committees began meeting monthly in November. Their next meetings are scheduled Jan. 15 at the Seaport Village Coral Reef Restaurant, the technical committee starting at 9 a.m. and the citizens' committee at 6 p.m.
Among 92101's cheapest public financing efforts that may reach fruition in 1998 is a new marketing approach beyond the Centre City Development Corp.'s primary mission to eliminate blight in the inner city, restore buildings when possible, condemn them if necessary, assemble land and turn it over to developers who will create attractive, productive environments. That's how millions of square feet of space were built in the last 21 years, from Horton Plaza to One America Plaza to the Harbor Club.
At the same time, the San Diego City Council zoned so much suburban land for commercial development that millions more square feet of space were built on cheaper dirt, far from the nasty social elements of inner cities, and tenants were attracted there instead of Downtown. Just as the decline of Downtown in the 1960s and 1970s was directly attributable to the rise of Mission Valley and Kearny Mesa development, so could its stagnation in the late 1980s and early 1990s be blamed in part on the rise of the Golden Triangle.
That's sort of what helped convince CCDC President Peter Hall that public financing of some marketing to attract tenants to Downtown office buildings was no less appropriate than the pretty brochures, cross-country trips, land assembly and public energy that went into assisting Ernest Hahn in attracting retailers to Horton Plaza.
Not that the $80,000 CCDC will spend annually on marketing communications is significant compared with the $1.5 million the Regional Economic Development Corp. will spend annually to attract companies mostly to the suburbs.
Hall took his first shot at office tenant marketing in January 1996 when he — outgunned by suburban or regionally oriented interests — met with relocating Navy SpaWar contractors. A similar EDC-arranged delegation, including Hall, met again with SpaWar consultants this past October in Washington, D.C. Some 45 or 50 companies were represented. Some had relocated in Rancho Bernardo or along I-15, some in Mission Valley, only two or three in Downtown, although SpaWar headquarters were established nearly adjacent to Lindbergh Field in the old Air Force Plant 19 near the Midway Drive Post Office, while the SpaWar Navy command cozied into the old NOSC facility across the bay from Downtown on Point Loma. Some consultants have yet to relocate. Some who've located in San Diego plan to expand or relocate to larger facilities.
CCDC's nominal marketing effort was supported late in 1997 by a new, slick, full-color brochure that touts the inner city accurately enough — although outside the public perception — as "Tech Town." It speaks of "vertical campuses" and cites high-tech tenants, much like a black-and-white brochure produced by the Downtown Partnership in 1996. CCDC solicited corporate donations to get the brochure printed.
But, unlike the EDC, CCDC staff does not routinely plan elaborate trade missions, its marketing material is sparse and its persistence and follow-up with possible tenants are still new concepts. Historically, CCDC has been all about negotiating with developers, not attracting office users.
But Hall is coming around.
"I don’t think you need to worry about bricks and mortar if you don’t get out in front and create demand," says Hall. "Whoever suggested our role is just brick and mortar is missing the point. We’re as much an advocate of Downtown as a manager of redevelopment. We’ve got to get out there with the Chamber and EDC and Partnership to get out in front, otherwise we’re reactive....
"If brick and mortar was the exclusive philosophy in the past, I strongly believe that’s wrong. We need to reach out to the marketplace, whether the development community or the financial community, but most importantly, the user community to encourage their usage.
"We’re pushing $80,000 in the budget for marketing communications. We’ve asked for an addition to our budget not only for SpaWar but as part of a larger issue of defining a new segment in Downtown, technology. We want to embrace the Center for Competitive Technologies at San Diego City College. We want to take advantage of San Diego being the most optic-fibered city in the country. Our Downtown has more fiber in its streets than any other city in the country and a helluva lot more than any other community the region.
"Look at the demographic profile of the software industry. It’s what Generation X is all about. And those people love to work and live and play in a downtown, urban environment. So we’re trying to add to the traditional market segments of Downtown San Diego — government, finance, legal — and add software development, and focus our marketing to that industry and to technology in general. We want to be known as the Cyberplace."
Imagine that, Cyberplace San Diego, CA 92101.
Dick Cloward runs the San Diego Port Tenants Association, about 200 folks ranging from the airlines and shipbuilders to the hotels, marinas and Nutrasweet Kelco, which operates San Diego’s largest biotech lab and clean rooms in Barrio Logan, not Kearny Mesa or Sorrento Mesa or Carlsbad. An ex-officio member of Cloward's association, the Navy, of course, is the largest occupant of San Diego’s tidelands.
To SpaWar contractors or any other techie, the former Navy ship driver, Cloward says this: "I’ve been to 106 countries. I came back after 30 years in the Navy to live here because it is without a doubt the finest blending of climate, environment and potential of any city in the world. I lived in Tokyo, Brussels, Madrid, and if it had water nearby, I’ve been to it.
"If you can’t find room on the tidelands, and we recognize office space is a hard commodity to find on San Diego Bay, we'd really encourage you to be as close to tidelands as possible. That translates into Downtown San Diego."
How 'bout the Cyberplace on the Bay, CA?
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