East Village Quarter Development Project Approved by San Diego City Council
Keyser Marston was retained by the City of San Diego to provide a financial analysis of a proposed real estate transaction with the San Diego Padres for a $1.5 billion development plan, the “East Village Quarter” project. Proposed by a development team led by the Padres (along with Tishman Speyer and Ascendant Capital Partners), the transaction involves the sale of city-owned property and a negotiated Development Agreement.
The Padres are seeking to develop a mixed-use project on a four-block site used as a public parking lot known as “Tailgate Park”, near the Padres’ ballpark in Downtown San Diego’s East Village. This land was formerly owned by the City’s redevelopment agency and leased to the Padres through 2033; but as a result of the 2014 legislation dissolving California Redevelopment Agencies, ownership and leasehold of site was transferred to the City.
On April 19th, the San Diego City Council agreed to sell the site to the Padres development team for $35.1 million, while approving a development agreement stipulating the site be redeveloped with 1,530 market rate apartment units and 180 low-income apartment units, along with 50,000 SF of office/retail space, private parking, and a public park. Additionally, the development agreement also requires, that the City replace 1,060 existing parking spaces currently used by the Padres. A 1,060-space replacement parking garage for the Padres will be part of the overall development with a credit against the land sale.
Keyser Marston estimated the fair market value of the 5.25-acre property at its highest and best use, while factoring the financial cost of the City’s obligation to construct the replacement parking garage.
East Village Quarter is planned as a mixed-use development with the following major components:
- Market-Rate Apartments – 1,530 market-rate rental units comprised of 536 studios, 612 one-bedroom, and 382 two-bedroom units, with an overall average size of 738 SF.
- Affordable Apartments – 180 apartments for households earning up to 60% of AMI; and 90 apartments for households earning up to 150% of AMI. The Affordable Housing Dwelling Units will comprise 94 studios, 108 one-bedroom, and 68 two-bedroom units, with an overall average size of 793 SF.
- Retail Space - 50,000 SF of ground floor retail space.
- Private Parking – 1,530 spaces of above-grade podium and below-grade parking for the residential component.
- Padres Parking Garage – A nine-level, above-grade parking garage totaling 1,200 spaces, including 1,060 spaces available to the public.
- Public Park – A privately owned and maintained park on the northwest block, open to the public