The Overture is a new mixed-use residential development that aims to stimulate the revitalization of the C Street corridor in the heart of downtown San Diego.
The Union-Tribune’s Roger Showley recently wrote, “Downtown’s C Street should be a bustling pedestrian street.” Served by two San Diego Trolley lines, its central business district location beckons for shops, restaurants, residences and businesses. Yet, plagued with eroding sidewalks, a growing homeless population, and unused, boarded up properties, the area has failed to meet its potential as a downtown destination for decades.
That’s about to change with plans for The Overture - located at the intersection of Fourth Avenue and C Street, this project will become the epicenter of the area’s much needed revitalization.
At 40 stories, The Overture will offer retail stores, bars and restaurants, and 282 modern urban residences. The project will also contain 22 affordable income units and above ground as well as below grade parking totaling 314 spaces. In addition, the new structure will be environmentally responsible and will receive a LEED silver certification.
Memories of the old California Theatre will live on in both the design and functionality of the building. For example, the California Theatre’s Spanish colonial-styled facades will be replicated in the old office tower, complete with a new “California” theater blade sign and marquee. The project will also have a community gathering space on its first floor along Fourth Avenue that will contain photos and artifacts of the theater and serve as a space to pay homage to C Street’s past.
Our proposed revitalization program incorporates some of the building’s historic aesthetics and functions but with a modern twist. The plan is to replicate some of the original ornate design elements, such as the 65-foot corner blade sign we plan to incorporate into the re-created tower building. Another feature will be the re-creation of the entire façade of thef old building, complete with its elegant entry marquee.
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Respecting the importance of the theater to downtown’s heritage, the developers are memorializing the building and area’s history with a dedicated space that will be curated by a rotational community board of historic experts. The dynamic space, which may be used for events and gatherings, will benefit the community as a place to preserve and enjoy the area’s history. This 1,100-sq. ft. space will be located along Fourth Avenue.
The Overture will create a healthy environment for those who live, work and play within the building and the surrounding downtown area. The Overture is targeting LEED Silver certification and is also slated to receive WELL Certification, a new standard introduced by the Well Building Institute and a first for San Diego. In addition, the building will have a photovoltaic roof for solar energy use, and construction will use recycled and regional materials. Additionally, best management practices will be applied for water efficient landscaping throughout the property, using planting areas to filter storm water for re-use within the building.
Yes, the project will include 22 affordable housing units.
Sloan Capital Partners, a California based investment and development firm, acquired the property in 2008 through foreclosure. An affiliate of Sloan had provided acquisition financing to a local San Diego developer and when the developer went bankrupt, the property was foreclosed at a cost of over $12 million.
Several groups have approached ownership to acquire the property but only two were qualified with the financial means to undertake the project. The last bonafide offers were in 2013. After considerable time and resources spent in underwriting and physical due diligence inspections, the two potential buyers - a hotel developer and a commercial developer – both deemed the project was infeasible and backed out. Neither of their proposed plans included any level of preservation or recreation. At that point, the ownership committed to develop and reposition the property for the betterment of downtown San Diego.
When the property was acquired by the current ownership in 2008, it was severely dilapidated and run down. Ownership commissioned a structural report in 2009 to evaluate the existing site conditions, including an assessment of the hazards associated with the exterior façade, veneer and appendages of the building including the theater marquee. The study found that the building was structurally compromised, unsafe and posed a danger to individuals in its immediate vicinity. Since then, ownership has diligently secured the property against vandals and trespassers.
In 2013, Ownership began entitling the property to develop it with an eye to restore its architectural significance. With that objective, Sloan retained its lead development principal, Cyrus Sanandaji of Presidio Bay Ventures. A graduate of UCSD and a longtime San Diego resident, Cyrus has many years of experience in adaptive reuse and rehabilitation of historical properties throughout California. Under Cyrus’ leadership, Sloan has assembled an impressive team of San Diegan professionals to design a project that is true to the property’s history while revitalizing the C Street corridor.
Given a restoration of the theater is financially unfeasible, ownership analyzed commercial office, hotel, and a mix of commercial/residential/hospitality. None of the alternatives were deemed feasible in today’s marketplace.
No, the ownership has worked to maintain the property within the strict restrictions placed on a local historical resource.
The theater switched ownership multiple times between its last known remodel in 1978 and its foreclosure in 2008 when Sloan acquired the building. When Sloan took ownership, the theater and the building had been shuttered for over 18 years and the building had already severely deteriorated, to the point that its structural integrity has become compromised beyond repair.
No. As it stands, the building is an unsafe and dangerous space for local residents and visitors. In fact, a 2011 report to the San Diego City Attorney by reputable engineers, Ray Flores and Armando Valdos, deemed that “there is a clear and present danger posed by the deteriorating structure to the life and safety of the public” and the building should be demolished as “there is no question a collapse is inevitable.” Now, five years later, after natural activities like storms and earthquakes, the building has suffered further destruction creating an even more unstable and unsafe space.
According to news reports, the interior was remodeled, updated, painted and redecorated in 1963 concealing its original Spanish-style attributes and charm. The main stage was also reconstructed after a fire in 1978. There is evidence that the majority of the interior improvements in the building are not original and have been haphazardly renovated during the 1960s, 1970s, and 1980s, often without permits.
Since its designation as a local historical resource in 1990, no updates have been made to the building.
Yes. First, the preservation community has been engaged throughout the planning process and while preservation of the existing theater and tower is not economically feasible, ownership has taken significant steps in incorporating historical features in the design of Overture. As for public sentiment, the ownership conducted an event in 2014 that asked the community “what do you want here.” Responses from the event, which helped to shape the project, were overwhelmingly in favor of a retail, restaurants and apartments.
In addition, there was considerable support and interest for demolishing this unsafe building and developing a mixed-use residential project that would serve as a catalyst for further development along the C Street corridor. The Greater San Diego Chamber of Commerce and many owners within a two-block area of the project and along the C Street corridor strongly support the proposed project.
Extensive studies and analyses show that our proposed revitalization program is the one and only financially feasible plan for this property.
Because the California Theatre building is a designated local historical resource, any proposal to substantially alter or demolish the building requires a Site Development Permit for Substantial Alteration pursuant to the Municipal Code. (§SDMC 126.0504(i) In order to obtain such a Site Development Permit, the permit applicant must prove that there are no economically feasible alternative development scenarios that would reduce or minimize the adverse effects to the historical resource. The permit applicant must identify such alternative development scenarios and develop sufficient architectural plans for each alternative to enable an independent construction cost estimating firm to produce an accurate construction cost estimate for each alternative. An Economic Feasibility Analysis of the proposed project and each identified Alternative must then be conducted by a qualified, Economic Analysis Firm. In this instance, The London Group provided such an analysis and concluded that the complete rehabilitation of the building, theater and office tower, would cost $40.8 million dollars in hard costs. This analysis also researched the economic viability of comparable publicly and privately owned theaters in Southern California and found that ticket sales and facility rentals do not typically cover operating costs and that such locations depend largely on donations to cover their deficits. All of this information will be in the public record as the City reviews this Site Development Permit application.
Historic theaters in the area that have been recently restored are prime examples of unfeasibility of rehabilitation. The 2008 rehabilitation of the nearby Balboa Theatre cost $26 million, much of which was funded through City redevelopment funds that no longer exist. The 2010 $12 million rehabilitation of the North Park Theatre was also funded through City redevelopment funds. Both theaters still operate at a loss. The California Theatre is larger and in worse shape and will cost much more money to restore. In a report commissioned by the ownership, San Diego economist, Gary London, concluded that preservation or rehabilitation is not economically feasible under any circumstance.
The project proponents will present the required information and documentation that will support approval of the project by the Planning Commission and the City Council, the decision makers for the requested discretionary permits required. The comments and contributions from the various advisory bodies, such as the Historical Resources Board and Staff, will be taken into consideration as the project proceeds through the process.
The proposed revitalization program is the one and only financially feasible plan for this property – both from a development standpoint and from a community benefit standpoint.
The cost to rehabilitate the theater has been verified by three independent general contractors and architects who specialize in preservation. With three similar cost estimates falling within a few thousand dollars of each other, the cost and risk analysis shows that preservation or rehabilitation is not economically feasible under any circumstance. This is also supported by a study by San Diego economist, Gary London, who arrived at the same conclusion.
A 2009 Structural Report found the building to be an unsafe and dangerous space for local residents and visitors. Instead of boosting the neighborhood’s appeal and morale, it serves as one of the main contributing factors to the diminishment of the neighborhood’s class, engagement and charm. Our extensive discussions, outreach, and involvement with the City and broader community stakeholders has resulted in a broad common understanding that our approach is the only viable one to help stimulate the redevelopment of the C Street corridor and surrounding downtown areas.
Further, the proposed plan will create local jobs, generate annual revenue for the City, and save taxpayers money. The revitalization will also rid the city of the dilapidated structure, which currently promotes crime and vandalism and poses a public security and safety threat, and instead create a fresh space complete with a new communal atmosphere for Downtown residents and visitors to enjoy.
After extensive discussions with the various stakeholders, our proposed design mitigates the community’s concerns about retaining some elements of the theater tower by recreating the 4th and C Street façades of the tower and distinguishing its design from the rest of the project.
There is significant downtown interest and support for demolishing this blighted site and constructing a mixed-use / residential project, which would serve as a catalyst for further development along the C Street corridor. The Downtown San Diego Partnership, the Greater San Diego Chamber of Commerce and many property owners within a two-block area of this project and along the C Street corridor have expressed their strong support for the proposed project.
The project site is located on the southeastern edge of the overlay zone, a zone that was approved as part of the Downtown General Plan Update in 2006 that requires all new development to include at least 50 percent employment-related uses.
The overlay has essentially created a development “dead zone” because strong residential demand cannot be supplied in this part of Downtown, and because the zone has not been prime for employment related uses. As such, there has not been any major development in the last decade - no new commercial or hospitality projects, nor any new mixed-use projects, have been developed in the overlay zone. Given the market demands and economic pressures, a residential project is the only viable option, which is why it needs to be removed in order to develop a program which is economically viable in today’s market place.
The Historic Resource Department staff has analyzed the proposal and determined that the signs do not meet any of the criteria for historical designation.
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The following addresses inaccurate statements and false accusations as made by the San Diego historic preservation community. For further comment and clarification, please contact email@example.com to arrange an interview with a spokesperson.
TRUTH: CEQA contains no such provision. Furthermore, the authority to make discretionary land use decisions, such as the issuance of this Site Development Permit for the Substantial Alteration of a locally designated historical resource, is vested in the San Diego City Council.
TRUTH: The development team has exhausted all possibilities for rehabilitation, including exploring the use of historic tax credits. Historic Properties Attorney, Marie Burke Lia who has handled most of the Historic Preservation Tax Credits done in San Diego over the past 20 years, states that Historic Rehabilitation Tax Credits are only available for the complete rehabilitation of a National Register eligible building that complies with the Secretary of the Standards for Rehabilitation.
According to the Economic Feasibility Analysis conducted by The London Group, a full rehabilitation of the property would cost $40,000,000, and through the Historic Tax Credits, it could earn 20 percent of that amount (i.e. $8,000,000) in tax credits. This means that the project would still be infeasible with a cost of about $32,000,000.
Different from Historical Tax Credits that are dollar-for-dollar, New Market Tax Credits (NMTC) are only for 39 percent of the equity invested into the project. For example, a $10 million equity investment yields $3.9 million in tax credits.
However, there is no sale value generated from the theater. Any investment would result in a loss for the equity that invested through a NMTC. In other words, no investor would invest $10 million to receive compensation via a tax credit of only $3.9 million. The project must still be financially feasible and generate a profit so that the investors can successfully be repaid.
TRUTH: Due to the expected population increase in Downtown, our analysis found that a mixed-use residential property would be most beneficial to the community in order to house the growing population. Furthermore, the Economic Feasibility Analysis researched the economic viability of comparable publicly and privately owned theaters in Southern California and found that ticket sales and facility rentals do not typically cover operating costs and that such locations depend largely on donations to cover their deficits. There are several prominent examples of failed and/or failing theaters in the area, which further substantiate this point. These findings have been included in various reports submitted to the City as part of the entitlement application process.
TRUTH: That is simply not true. The ownership of the building has invested significant time and resources in ensuring the community is involved with this project. There is significant downtown interest and support for demolishing this blighted site and building a mixed-use / residential project, which would serve as a catalyst for further development along the C Street corridor. The Greater San Diego Chamber of Commerce, the Downtown San Diego Partnership, SD Building and Construction Trades, Sycuan Tribe and many owners within a two-block area of the project and along the C Street corridor strongly support the proposed project. Furthermore, the local community continues to show its support of the project via our change.org petition with over 1,000 signatures and via social media where we have over 14,700 followers across all our channels.
Additionally, the proposed plan will create local jobs, generate annual revenue for the City, and save taxpayers money. The revitalization will also rid the city of the dilapidated structure, which promotes crime and vandalism and poses a public security and safety threat that currently resides on the property and instead create a fresh space complete with a new communal atmosphere for Downtown residents and visitors to enjoy.
TRUTH: Several groups have approached ownership to acquire the property but only two were qualified with the financial means to undertake the project. The last bona fide offers were in 2013. After considerable time and resources spent in underwriting and physical due diligence inspections, the two potential buyers - a hotel developer and a commercial developer – both deemed the project was infeasible and backed out. Neither of their proposed plans included any level of preservation or rehabilitation. At that point, the ownership committed to develop and reposition the property for the betterment of downtown San Diego.