SAN DIEGO—Following months of discussions with the property owner and the city council, Mayor Todd Gloria on Friday announced a proposed mega homeless shelter in Middletown was no longer realistic.
“After a year of negotiations and multiple hearings, we have come to the conclusion that the proposed homeless shelter campus at Kettner [Boulevard] and Vine [Street] can no longer advance,” he said. “As a result, we will present alternative solutions to the City Council on Feb. 10.
“These include one privately owned property on Second Avenue that would require lease negotiations and two city-owned properties the Old Central Library and the City Operations Building.”
The ambitious project to convert a 65,000-square-foot commercial building to a shelter providing on-site security, meals, housing navigation and case management services and space for 1,000 beds was met with skepticism.
Gloria came to a tentative 30-year lease deal with the landlord in July of last year, at a cost of $1.95 per square foot with annual 3.5 percent rent increases and an estimated $12.5 million in facility maintenance costs over the term.
However, the city’s Independent Budget Analyst—an independent office intended to review and publish reports on the mayor’s budget moves—advised the council to proceed with caution, warning that the deal could lead to another costly real estate misstep such as 101 Ash Street.
The IBA acknowledged the need for shelter space but warned that the lease was above market rate and would cost San Diego $72 million over 30 years.
“The proposal represents an opportunity to change the city’s current approach to shelter by pursuing permanent emergency shelter and potentially provide needed replacement and new shelter beds,” the IBA report reads. “However, the proposal also comes with an above market rate lease, as well as significant upfront and ongoing costs associated with rent, lease operating, tenant improvement and program operating costs.”
With a looming budget deficit and the quoted rate, the council balked, delaying any agreement until Gloria’s pivot on Friday.
“While I continue to believe the proposed shelter at Kettner and Vine was the best and most cost-effective option for a permanent shelter program, I remain firm in my commitment to expand shelter,” Gloria said. “Getting people off the streets and out of the riverbed and canyons is not optional. That is why we are continuing to push forward with real solutions, identifying new sites and taking the necessary action to bring more people indoors.”
