POINT LOMA – The proposed four-story, 56-unit mixed-use project with a commercial suite and 45 basement-level parking spaces at 1004 Rosecrans Street is up for sale — and developers in Point Loma are potentially interested in buying.
But whether or not any of them are willing to meet the developer’s asking price is the (several) million dollar question.
Protect Point Loma president Eric Law, who also chairs the Peninsula Community Planning Board, argued the sale of the project to local investors would benefit both sides —as well as the community as a whole.
Law said Protect Point Loma is working with Peninsula developers of one sort or another with the idea of producing a different type of development that would be better for the community.
He said real estate comparables, or “comps,” in the area are substantially lower than what the developer wants for 1004 Rosecrans.
“We’ve had a couple of other investors look at it as well as some local businesses who want to lease the property,” said Law. “So, there’s a market for this property — but not at what the developer wants others to pay for it.”
“The property is currently listed with a broker,” said Michael Contreras, founding owner and chief executive officer of Northstar LLP, the project’s developer. “We are asking $5.2 million. But I would be open to offers around $4.8 million, provided there is a short due diligence period.”
He said a previous local investor fell through during escrow, but they are seeing new interest from potential buyers.
“We have invested significant time and resources into the development plan for 1004 Rosecrans Street,” Contreras said. “However, due to my current involvement in two other large-scale projects, I have decided to put this property on the market.”
If the property does not sell in the coming months, Contreras said that he intends to proceed with construction himself.
Law said he felt it was telling that the property now for sale, rather than the developer forging ahead.
“The rental market has gone flat — even depressed — right now. It’s down about 5%,” Law said.
Contreras said there is misinformation regarding the project being circulated.
“The proposed building will be a maximum of 30 feet tall, which is only 3 feet higher than the metal rod currently on top of the existing structure,” he said. “There have also been inaccurate drawings circulated that misrepresent the building’s scale. The actual design is intended to be a beautiful addition to the neighborhood.
“Claims that there is no residential parking are incorrect. The plan includes 45 parking spots designated exclusively for residents.”
The 1004 Rosecrans development proposal would use a density bonus through the city’s Complete Communities program, which seeks to bolster housing and mobility. The density bonus is awarded for the inclusion of residential units deemed affordable for lower-income households.
“It is disappointing to see such opposition from those who already live in the area and benefited from previous developments,” Contreras added. “I believe this project will greatly enhance the community for new families.”
For the proposed Rosecrans building, eight of the 56 proposed apartments have reportedly been designated as affordable.
The site was previously occupied by the San Diego County Credit Union. Law pointed out that the building, formerly a bank, adds more complexity to the task of trying to purchase and redevelop that property. Bank buildings are somewhat expensive to redevelop, because demolition of the bank vaults they contain is a high-risk process demanding specialized skills, equipment for vault removal, and careful planning.
Residential and commercial neighbors near the site are arguing that the redevelopment project, as now proposed, lacks enough parking, which would further compound traffic along Rosecrans and Talbot streets and create safety problems for Cabrillo Elementary School next door to the property.
The state density bonus law was established in 1979 and has been expanded over the years. It requires cities to grant waivers and incentives for projects with units deed-restricted for low-income households. The law was updated recently to clarify that it supersedes local voter initiatives.
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