Two of the city's most historically neglected neighborhoods will likely receive dramatic investment during the next decade. However, those holding the purse strings have largely avoided public scrutiny about what exactly that investment will look like.
Eying an initial $150 million in funds slated for development deals and revitalization efforts in Encanto and City Heights, affordable-housing advocates and others now see a chance to replace resources lost when redevelopment ended.
On Monday, the City Council unanimously approved longtime local developer Reese Jarrett as the new president of Civic San Diego, the city-owned nonprofit built from the now-dismantled Centre City Development Corporation.
Pointing out that 20 percent of all revenue under redevelopment was set aside for low- to moderate-income housing, Councilmember Ed Harris asked Jarrett during the meeting if Civic San Diego would back a similar program.
The answer was no. "It's going to be on a project-by-project basis," Jarrett said, "because we no longer have the continuing revenue that came out of redevelopment.
"Where the affordable housing is most needed, we're going to try to implement it," he added.
However, that's not Jarrett's call to make, City Council President Todd Gloria noted. "The policymaking is made by the board of Civic San Diego and by this City Council."
"When we set up a box, Mr. Jarrett, you're going to live within it, and we're going to move forward," Gloria added. "But I want to stay mindful of the fact that it's a balance, and that's why I'm going to support Mr. Jarrett today, because I think you understand the balance."
In response to a CityBeat inquiry to Mayor Kevin Faulconer's office, spokesperson Craig Gustafson said that while a comparison with redevelopment is not appropriate because of different restrictions on funding, "Mayor Faulconer would support a 20-percent set-aside once a stable source of revenue is identified."
In recent months, a growing coalition of advocates have lobbied members of the City Council to draft a policy ensuring that development deals between Civic San Diego and the private sector include affordable-housing requirements that are at least as strict as those under redevelopment.
Specifically, advocates are pushing for 30 percent of residential units and 30 percent of investment funds to be dedicated to affordable- and low-income housing. Under redevelopment, 15 percent of residential units and 20 percent of funds were allocated.
"That is absolutely needed for the city, and I hope under Mr. Jarrett's leadership, he will make that commitment," Bruce Reznik, executive director of the San Diego Housing Federation, said at the council meeting during public comment.
Joined by members of the City Heights Community Development Corporation and the San Diego Organizing Project, the Housing Federation and others could be getting traction at City Hall for a so-called community-benefits policy.
"You never want to count your chickens, but some council members have been talking to us about this, and there's clearly some interest on the 10th floor," said Ken Grimes, City Heights CDC executive director, referring to the floor at City Hall that houses council offices.
Without such a policy, Civic San Diego will be challenged to negotiate a good deal for neighborhood residents, Grimes added. "It puts the agency staff in a difficult position when they're trying to get a development deal done," he said. "This way [with a benefits policy] they can say, It's not me . Sorry.'"
Also being pushed is a policy to hire local workers and guarantee construction is subject to the city's prevailing wage formula, which usually mirrors union wages.
"One of the things that you and I talked about, and many people who are here today have talked about in the past," City Councilmember David Alvarez said to Jarrett at the meeting, "is how do we ensure that projects that come through the city, and this case through Civic San Diego, actually hire the people that live in the community where these projects are being built?"
While such questions are far from answered, it's clear that money is coming down the pike. So far, Civic San Diego's been awarded $58 million in federal new-market tax credits, which it's used to provide incentives for private investment.
Officials are well on their way to putting together a $100-million investment fund aimed at building high-density "transit villages" along sections of El Cajon Boulevard and Imperial Avenue, as well as a separate $50-million investment fund to generate revenue through buying and leasing property. As this process plays out, advocates argue that a community-benefits policy would not only ensure good jobs but also prevent new development from displacing existing residents.
"The only anti-gentrification strategy there is is affordable housing," said San Diego Organizing Project Executive Director Kevin Malone. "If the new redevelopment 2.0 has no affordable-housing dollars in it, then gentrification just happens."
During the last year, several members of Civic San Diego's board of directors tried to raise similar points, calling for a public discussion of a community-benefits policy to regulate how the multimillion-dollar investment funds are spent. So far, the board has largely sidestepped the issue, declining to adopt a policy or even discuss the substance of the idea.
"I've been advocating for community benefits for over a year and haven't seen much momentum at Civic San Diego in terms of good jobs and affordable housing," said Murtaza Baxamusa, a member of Civic San Diego's board. "This is a pivotal moment for Civic to decide where to go. To the extent that the City Council sets the goals and objectives for Civic, the better it will be to sustain itself in the long run."
Senior staff with Civic San Diego declined to comment for this story.
The issue of defining community benefits for the investment funds heated up at a series of board meetings last fall. At one meeting in September, Baxamusa, with the support of other board members, requested that city staff be on hand to answer questions about the creation of the funds.
In a stern response, Jeff Graham, Civic San Diego's then-president, said, "Do I need to get the entire City Council in here to tell the board what their direction is? I have briefed every council member on this, and I have not received any opposition. I have briefed many, many community groups on this, and they are all asking, When can you get out here and start helping us?'"
After spearheading the investment funds, Graham abruptly left in March to work for real-estate company Jones Lang LaSalle. Now, appointed by Faulconer and approved by the council, Jarrett, a former partner with developers Carter Reese and Associates, takes over as head of the agency.
While it's unclear how Jarrett will handle the coming debate over a community-benefits policy, he acknowledges that it's a significant issue in the community.
"There's been a lot of discussion as I've made the rounds to talk to community groups and labor groups and other interested shareholders in the economic development that's going to occur in these neighborhoods," he said at Monday's council meeting. "I think there's a real important aspect of creating a template for having goals set for economic development, neighborhood development, community benefits—however you want to phrase it."