SAN DIEGO — A proposal from Mayor Todd Gloria to bring a 1,000-person homeless shelter to San Diego's Middletown neighborhood is moving forward at a rapid pace, with the city council expected to discuss the proposal in the coming weeks.
On April 4, Mayor Gloria unveiled his plans to lease a 65,000-square-foot warehouse, formerly home to a commercial printing business, located on Kettner and Vine, just north of Washington Street and Interstate 5.
As part of the deal, the city will lease the warehouse for $1.9 million a year for up to 35 years. Taxpayers will also pay the building owner, Douglas Hamm, up to $18 million for improvements. Public records show that the sale of the property to Hamm for $13.25 million closed on April 2, just two days before Mayor Gloria's announcement.
"A thousand people off the streets, off the sidewalks, out of the riverbeds, off our beaches, instead connected to care and on a path to permanent housing," said Mayor Gloria. "This is the bold action I know San Diegans expect from their leaders."
As Mayor Gloria and staff prepare their presentation to the city council for necessary approvals, other city departments are trying to get additional information on the timing, the cost, and how the proposed shelter fits into the city's strategy of reducing homelessness through housing instead of shelters.
In regard to additional information, mayoral spokesperson Rachel Laing told CBS 8 that the city has been in discussions with Hamm since December after he entered into escrow on the former print warehouse.
Laing said that the city did not have the opportunity to purchase the building and was forced to look at a long-term lease.
Added Laing, "The City sees this as a unique opportunity to bring 1,000 homeless San Diegans off the street and had been looking for years for a property large enough, the right kind of structure, and in an appropriate location to serve this population and this use."
"Such a large facility that is a finished structure – as opposed to an unfinished metal warehouse – is rare. The building has already had asbestos remediation and other improvements from a prior remodel. It’s located near services and just blocks from a trolley stop, affording clients the ability to access services and to travel independently to work and medical and other appointments."
As for the $18 million that the city has set aside for building improvements, Laing said a portion, just over $2 million, would be offset by Hamm allowing the city to go rent-free for the first 15 months.
Said Laing, "The improvements are being estimated at up to $18 million, though the figure could be lower. The new owner will perform the improvements, which will be paid for by the City."
Meanwhile, Gloria's communications head says that outreach to nearby neighbors and businesses to get their feedback is now in process.
"Outreach to neighbors is being conducted now," said Laing. "Members of the public also will have the opportunity to weigh in on the project and lease at the committee and City Council hearings on the topic."
As Gloria's office conducts outreach, other city departments such as the Independent Budget Analyst will be reaching out to try to fill in the blanks on such a long-term lease.
San Diego's Independent Budget Analyst, Charles Modica told CBS 8 that his office has several unanswered questions about the long-term lease.
"Our office received a copy of the proposed lease last week," said Modica. "Our real estate consultant plans to review it and flag any potential terms that could expose the city to unanticipated risks or liabilities and to ensure that the proposed rents were consistent with market rates. Our consultant flagged a few items, and we’ve been following up with the administration since then."
Modica's office will look deeper into the proposal as soon as the Mayor releases the draft lease agreement.
Said Modica, "Provided a lease does come forward for Council to consider, we will release a review that covers the lease/acquisition terms themselves; potential costs needed to make improvements to the site, costs to operate the site as a shelter, and how the City would pay them from; and whether/how the proposed site and shelter fit into the City's overall approach towards addressing homelessness.
Concluded Modica, "We currently have a number of questions out to the administration and various City departments on those latter items, and are waiting to hear their responses."
