The city and the San Diego Padres hope to soon make official a 180-day negotiation period that they anticipate will lead to the redevelopment of a 5.25-acre parking lot near the baseball team’s ballpark.
Wednesday, the Economic Development and Intergovernmental Relations Committee unanimously approved city staff’s recommendation to enter into an exclusive negotiating agreement with the Padres for the sale of the land known as Tailgate Park.
The action tees up consideration of the preliminary contract, which sets the ground rules for a future transaction, by the full council next month. It follows a competitive bidding process that started nearly a year ago and concluded with the ball club beating out Brookfield Properties with a $1.4 billion, office-centric proposal.
As proposed, the Padres and its development partners, Tishman Speyer and Ascendant Capital Partners, are looking to refashion the asphalt area into a commercial office hub now being referred to as East Village Quarter. The group is pitching a 1.35 million square-foot tech or biotech campus that is accented by 612 market-rate and subsidized apartments, 50,000 square feet of shops, 1,600 parking spaces and 236,000 square feet of public open space.
“It’s extremely exciting that we have a hometown development team maximizing this project in this location for the purposes of the betterment of San Diego,” Councilman Chris Cate said at the committee meeting. “Hopefully the process over the next six months runs smoothly and we can get together and get this project off the ground sooner rather than later.”
The statement hints at the city’s interest in offloading Tailgate Park.
A rendering of an outdoor plaza in the Padres development plan for Tailgate Park. The proposed project includes 612 apartments, 1.35 million square feet of office space, 1,600 parking spaces and 236,000 square feet of open space.
(Courtesy, City of San Diego)
The site — bounded by 12th and Imperial avenues, and K and 14th streets — has a complicated past that makes a transaction more involved than others. A city-owned asset since the formation of downtown’s ballpark district, Tailgate Park is subject to state oversight because of its ties to San Diego’s former redevelopment agency, which was dissolved in 2012. The lot must be divested, per California’s Department of Finance, in a way that maximizes proceeds for more than two dozen local taxing entities, including the county and several school districts.
As such, the city believes an immediate sale of property is in everyone’s best interest. That conflicts with the Padres’ initial bid to enter into a long-term ground lease with an option to buy in 20 years. The difference is an important distinction that was memorialized by the committee’s action to accept city staff’s recommendation. That means, should the full council follow suit, negotiations will center around a sale and not a lease.
The Padres remain open to a sale, a spokesman said.
The financial benefit for the city, county and school districts is still to be determined, with only minimum values set by the state and documented in an associated compensation agreement. As it stands, the minimum value of the land is $8.4 million, as determined by the property value in 2011. The city’s proportional share of net proceeds is 17 percent, or about $1.4 million. San Diego Unified School District’s share of proceeds is 44 percent, or roughly $3.7 million.
The negotiation agreement is scheduled to be heard by City Council on Nov. 10. If approved, a contract with specific deal terms is anticipated to be presented to council members by July or August.
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City ready to formalize talks with Padres for sale of Tailgate Park - The San Diego Union-Tribune
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