Shea Homes has been selected to develop the Mercado, a mixed-use project long proposed for a 6.8-acre plot of land in Barrio Logan.
The weedy patch of earth running along Cesar Chavez Parkway has been a sore spot for the neighborhood ever since the city used eminent domain in 1993 to obliterate some rundown buildings to make way for a mixed commercial/ housing project.
The Barrio Logan Selection Committee heard proposals from Shea and McCormick Baron Salazar at a public meeting in January. After interviewing the two developers privately, the committee voted unanimously to select the Shea proposal. Shea proposes 85,000 square feet of mostly retail space, including a Latino-oriented grocery store, 12 for-sale townhouses and 60 “affordable” housing units for people with lower incomes.
Many residents of Barrio Logan preferred the Shea project because of its lower height—two stories as opposed to four—and because it would cost $53 million, half as much as the more ambitious McCormick proposal. Some residents also feared that the McCormick project would accelerate gentrification in their rapidly developing neighborhood.
“I don't like to see families lose their homes for condos,” Maria Martinez, a Barrio Logan resident, said through a translator. She preferred the Shea proposal because she liked that it would make it easy for locals to stay in the neighborhood.
The Environmental Health Coalition (EHC), which advocates for environmental and social justice in the Barrio Logan/Logan Heights area and includes as members some 800 residents, endorsed Shea because of the promised 60 units of low-income housing.
“The weight of this project is not to be under estimated—it's going to set the tone for everything,” said Laura Benson, an EHC community organizer. “That's on people's minds; they see gentrification coming.”
But before it can build anything, Shea has to begin collecting the permits and conducting the environmental studies required of such a big development. Most immediately, the company will have to get approval from the Barrio Logan Project Area Committee, chaired by Shea-proposal supporter Rachel Ortiz, and then get ratification of an exclusive negotiating agreement with the City Council acting in its capacity as the city's Redevelopment Agency.
Kevin McCook, the Shea Homes project manager, said the company is “very excited” to get going on the project, but he declined to say anything beyond that. City officials and McCook were concerned that commenting further would interfere with the ongoing litigation between the city and former Mercado developer Sam Marasco.
City Attorney Mike Aguirre sued Marasco in 2006 for breach of contract. Aguirre won the rights to the land back, but that wasn't the end. Marasco countersued, and the matter is pending a trial date.
Though Marasco has already lost several key legal skirmishes, he has appealed, and any investment by the city or Shea holds the risk of being rendered moot if Marasco scores an unexpected victory.