San Diego Economic Development & Intergovernmental Relations Committee Meeting - October 28, 2020

The Economic Development and Intergovernmental Relations Committee of the San Diego City Council met on October 28, 2020, chair by Councilmember Kate, with Vice Chair Montgomery Steppe, and Councilmembers Ward and Kirsey. The meeting was held virtually due to Executive Order 29-20, with public comments accepted by phone. The committee addressed items including a temporary rent moratorium for city lessees, an amended Tourism Marketing District budget, two exclusive negotiating agreements for city property, and a resolution urging the Governor to act on hotel group meetings reopening. All items, except one, were approved unanimously and forwarded to full council.

Consent Calendar

• Item 1 – Proposed Sale of Popular Market Site: Approved unanimously as part of the consent agenda, with no items pulled. Public comment was heard (see below).

Public Comments & Testimony

• Non-Agenda Public Comment: Martha Welts expressed frustration over MTS bus service changes and criticized the treatment of Anthony's (fish market). Carlos Padilla III raised the lack of public restrooms in San Diego during COVID-19.
• Consent Agenda (Popular Market): Martha Welts opposed the sale of the Popular Market, stating the property is not for sale and accusing the city of "stealing property."
• Item 2 (Rent Moratorium): Bill Bramer (B Wise Ranch, city lessee for 25 years) supported the moratorium, noting his organic farm in San Pasqual Valley has seen sales drop dramatically. Clarissa Falcon (business owner and advocate) supported giving lessees certainty, especially for nonprofits and childcare providers. Namara Mercer (Mission Bay Lessees Association) supported the moratorium, representing SeaWorld, resorts, hotels, and more. Kim Boot (Hilton Moak at Torrey Pines) supported the moratorium, citing closures and furloughs. Richard Bartel (Bartel Hotels, Dana Hotel on Mission Bay) supported the moratorium, noting the current minimum rent is tied to pre-pandemic averages.
• Item 3 (TMD Budget): Namara Mercer (San Diego County Lodging Association) supported moving the litigation reserve to the catastrophe reserve, calling COVID-19 a catastrophe. Joseph Terzi (San Diego Tourism Authority) supported releasing funds to support the tourism industry.
• Item 4 (Padres ENA): Multiple speakers supported the ENA: Keith Jones (Ace Parking), Lizzie Broughton (Taylor Hair, East Village small business owner), Tom Lemon (San Diego Building and Construction Trades Council), Marshall Anderson (Downtown San Diego Partnership), Mark Balmert (San Diego Military Advisory Council), Summer Bales (San Diego Regional Chamber of Commerce), Diane Ki Bowd Straw (East Village Association), Bernadette Buckowitz (Plumbers and Steamfitters Local 230). Matthew Vespelakis (Climate Action Campaign) urged maximizing affordable housing and minimizing parking. Carlos Padilla III suggested using the site for a homeless resource center during construction.
• Item 5 (Valencia Business Park ENA): Several speakers supported the ENA: Dolvin Buchanan (resident), Ken Marlborough (Lifetime resident, District 4), Francine Maxwell (NAACP San Diego branch president), Matthew Vespelakis (Climate Action Campaign), and Sonya Robinson (NAACP Environmental and Climate Justice Committee). They cited job creation, equity, and community benefits.
• Item 6 (Hotels Reopening Resolution): Robert Gleason (Evans Hotels) stated meetings are one-third to one-half of their annual business, with many workers furloughed. Kim Boot (Hilton Moak at Torrey Pines) echoed the importance of meetings business. Michelle Meader (San Diego Bay Wine and Food Festival) noted the industry's economic impact and urged the council to carry the message to Sacramento.

Discussion Items

• Item 2 – Temporary Moratorium on Rent Increases for City Lessees: Councilmember Kate introduced the item, stating it is inappropriate to raise rents during a pandemic. Staff presented a proposal for a temporary moratorium on rent increases for city lessees who can demonstrate financial impact due to COVID-19, covering increases from January 1, 2020 to December 31, 2021, with credits for overpayments. The item requested financial and legal analyses from city staff, the City Attorney, and the IBA, to return within 45 days. Councilmembers expressed support but asked for expedited analysis. Councilmember Ward raised the possibility of extending protections to private sector leases, but the focus remained on city lessees.
• Item 3 – Amendment of FY21 Tourism Marketing District (TMD) Report of Activities: Staff presented an amended budget reducing projected assessments by $8 million due to the pandemic, and adding the litigation reserve balance of $5.36 million, resulting in a net budget reduction from $38.52 million to $35.86 million. The San Diego Tourism Authority (SDTA) outlined strategies to drive leisure travel, including advertising in California and Arizona. Discussion included the success of the weekday campaign and the risk of moving litigation reserve funds; it was noted that litigation has been resolved.
• Item 4 – Exclusive Negotiation Agreement (ENA) with Padres Development Team for East Village Quarter/Tailgate Park: Staff detailed the RFQ/RFP process that resulted in the selection of the Padres Development Team (with Tishman Spire and Ascendant Capital) for the 5.25-acre site. The proposal includes 1.9 million square feet of mixed-use development (1.35 million sq ft office, 612 housing units, 236,000 sq ft open space, 1,600 parking spaces). The ENA authorizes negotiations for 180 days (with optional 90-day extension), and the city does not intend to provide direct financial assistance. Councilmember Ward raised concerns about public use of the recreation space and affordable housing, asking for at least 20% affordable on-site. Vice Chair Montgomery Steppe asked about transit and climate goals. Councilmember Kirsey asked about the use of sale proceeds and the negotiation timeline. The item was approved unanimously.
• Item 5 – Exclusive Negotiation Agreement (ENA) with San Diego Energy Equity Campus Partners for Valencia Business Park: Staff presented the ENA for a 4.33-acre vacant site, with a proposal for a 25,000 sq ft office building and a 40,000 sq ft industrial building, focusing on sustainability and equity. The ENA includes a $50,000 non-refundable developer's negotiation payment and a $50,000 good faith deposit. Discussion emphasized the project's community benefits, job creation, and alignment with equity goals. Vice Chair Montgomery Steppe asked about the compensation agreement process, which staff confirmed would be done concurrently.
• Item 6 – Resolution Urging Governor Newsom to Act on San Diego's Hotel Group Meetings Reopening Plan: Councilmember Kirsey introduced the resolution to urge the Governor to approve a plan for safe reopening of hotel group meetings. Julie Coker (SDTA) explained that California is the only state not holding meetings, and that hotels have safe protocols in place. Public comment supported the resolution. Councilmember Ward opposed, citing public health concerns. The resolution passed 3-1, with Councilmember Ward voting no.

Key Outcomes

• Approved Unanimously: Consent agenda (Item 1), Item 2 (motion to request analyses), Item 3 (amended TMD budget), Item 4 (Padres ENA), Item 5 (Valencia ENA).
• Approved 3-1: Item 6 (resolution to Governor Newsom), with Councilmember Ward voting no.
• All approved items were forwarded to full City Council for consideration, with specific timelines (e.g., 45 days for analyses on Item 2; negotiation periods of 180 days for Items 4 and 5).