"You didn't even come say ‘Hi,'” Assemblymember Lorena Gonzalez goaded former San Diego Mayor Jerry Sanders last month as the two sat in front of the state Senate's Governance and Finance committee.
Sanders, president of the San Diego Regional Chamber of Commerce, looked over his shoulder and flashed a tightlipped smile back at the former labor leader. She chuckled; the mood was icy.
Traveling with Sanders to the state Capitol was a group of San Diego's politically powerful and business elite, including representatives from Republican Mayor Kevin Faulconer's office and the Downtown San Diego Partnership.
The group had flown up for the committee hearing with one goal: to kill Gonzalez's Assembly Bill 504, which, if approved, would increase oversight of Civic San Diego, the nonprofit to which the city has outsourced its permitting and planning authority for downtown.
The most recent version of the bill would require projects approved by Civic San Diego to be appealable to the City Council if a development includes at least 25,000 square feet of commercial space or at least 50 residential units or hotel rooms.
“The passage of this legislation will not only eliminate the process that's incentivized billions of dollars of private investment in our urban center,” Sanders said at the committee hearing, “it will put our downtown at a disadvantage to the rest of the city.”
Efforts to thwart Gonzalez's bill have been nothing short of aggressive. The Mayor's office has gone so far as to suggest the bill could put basic city services at risk.
“If passed, this proposal will result in a more onerous project process,” said Charles Chamberlayne, the mayor's press secretary, “and it will hurt communities who deserve park improvements, fire and police upgrades and much-needed economic development.”
From May 15 to the end of June, the Chamber of Commerce and the Downtown San Diego Partnership paid Mercury Public Affairs $21,250 to lobby specifically against AB 504, according to disclosure reports.
By comparison, from January through March, the chamber spent roughly $24,000 lobbying on 37 different bills and resolutions—or an average of $650 per item. In that same quarter, the Downtown San Diego Partnership spent nothing on Sacramento lobbyists.
“It's a huge mistake to put up obstacles and create uncertainty in a development process that has worked exceptionally well for the downtown community, but that's exactly what AB 504 will do,” said Kris Michell, the Downtown Partnership's president and CEO.
Despite opposition, the bill sailed smoothly out of committee. After the Legislature resumes session in mid-August, it will go to a vote by the full Senate. The deadline for the Legislature to pass bills is Sept. 11.
San Diego is the only city in California that outsources permitting and planning functions to a nonprofit. The city not only funds Civic San Diego, the mayor appoints its president as well as eight of its nine board directors.
Followed by supportive testimony from regional union leaders, Gonzalez argued before the Senate committee that the bill was necessary because Civic San Diego had frozen labor, and other members of the public, out of its planning process.
“What I want in San Diego is what all of you have had already in your own cities,” she said at the hearing. “To suggest that San Diego's development somehow… would stop because it could be appealed to the City Council is almost ludicrous when you look at the downtown development in Los Angeles, subject to community benefits agreements, subject to appeal of the City Council.”
Right now, major land-use decisions made by Civic San Diego are often only appealable to its board, which deals almost exclusively with design aesthetics. Wider discussions around things like labor practices, job quality and increasing affordable housing are considered outside the agency's purview.
Brigette Browning, president of Unite Here Local 30, a labor union representing thousands of immigrant hotel workers, said she wants to be able to discuss major downtown projects at the City Council.
“If tourism is one of the biggest revenue generators in the city of San Diego, it makes no sense to me that we have a process where we can't even talk about the kind of jobs that we're creating,” she said.
At the same time, the Downtown Community Planning Council, which routinely works with Civic San Diego on projects, has opposed the appeals process laid out in the bill. Chair Pat Stark said Civic San Diego has been “responsive” to community needs.
“I could see how someone could feel they don't have the opportunity to change a project and impose some condition,” he said. “I just think there should be a different mechanism it ought to go through to get there.”
Rebranded in 2012, Civic San Diego— formerly known as the Centre City Development Corporation (CCDC)—was tasked with winding down redevelopment after the program's dissolution under Gov. Jerry Brown.
In an effort to avoid phasing out the new agency with redevelopment, officials successfully applied for federal new-market tax credits and proposed expanding Civic San Diego's planning authority into several economically disadvantaged neighborhoods, including City Heights and Encanto.
However, during embattled Mayor Bob Filner's short term in office, in 2013, he appointed several left-leaning community leaders to Civic San Diego's board of directors. Previously dominated by land-use attorneys working for developers, the nonprofit's board quickly became embroiled in a fight over its fundamental mission.
Director Murtaza Baxamusa, who works for the San Diego County Building and Construction Trades Council's Family Housing Corporation, was part of a board coalition that argued any project receiving public tax credits should be subject to a so-called community-benefits policy to guide development.
After a failed effort by the coalition and social-justice groups to impose a binding benefits policy on the agency, Baxamusa filed a lawsuit, funded by labor, demanding increased oversight of the agency and calling into question the legality of outsourcing the city's planning authority.
“For [the Chamber of Commerce] to take such a hardline position on not touching Civic San Diego, it raised the question, what is the precious deal they got under the current setup?” he said.
The staunch opposition to a community-benefits policy by Civic San Diego leadership caught Gonzalez's attention. In early March, she announced plans to regulate the agency in a way that would move the discussion over community benefits and labor deals into a more public arena.
“If a local government wants to outsource its permitting process or any other inherently municipal responsibility…there have to be additional checks and balances to ensure accountability,” Gonzalez told CityBeat.
“Every other city and county in California has hired professionals in-house to carry out permitting, and development continues to happen up and down the state,” she added. “So it's unclear what Mayor Faulconer and the Republicans who defend Civic San Diego are really concerned about.”