By Gary H. London

Even though Juan Cabrillo initiated Western civilization in San Diego in 1542, the irony of San Diego is that it is perceived as a new city, at least in terms of its urban development. It is because of this that the city has become zealous about preserving the old.

Indeed, in 2009 the City of San Diego revised and tightened its historic site rules, in an effort to not be witness to the destruction of old structures. The rules, which are based on guidelines from the U.S. Department of the Interior, are broad and discourage destruction or major redevelopment of sites deemed historical.

There has been great angst about preserving local history. The issues focus on the extra level of review imposed on these structures, as well as the uncertainty associated with whether an old structure should be demolished, moved or untouched.

However, the cost of preserving a building often places that structure into economic jeopardy.

Sometimes it works to all of our favor. Liberty Station is the best example of using history to create viability, although I have previously argued that a little flexibility in the rules (more use of colors, better outdoor art, more development diversity) would make the whole project more economically viable without much historical cost.

Preserving History

Great cities must preserve their history. The rub comes when history is pitted against economic viability. Sometimes old homes can be moved. Centre City Development Corp., the city’s downtown redevelopment agency, is exploring just such an idea right now in an effort to preserve small, old homes while maintaining the momentum of new downtown development.

Large, old historic structures cannot be moved. They must remain historic. And often that means they become economically unviable.

A perfect example of the effects of designating a building “historical” is the California Theatre building on Fourth Avenue, between B and C streets. This excellently located structure is now nothing more than a privately owned eyesore of a building, practically falling apart in front of our eyes, which apparently cannot be viably renovated because it costs too much. Yet, it cannot be demolished because the city’s rules don’t allow it!

WTC Building

The World Trade Center, or WTC, building at 1250 Sixth Ave. is just such a large structure. It is an architecturally distinct 83-year-old, 12-story building that was purchased by the City of San Diego in 1994.

WTC, built in 1927, is a perfect example of how the rules of historic preservation have compromised the economic viability of buildings.

In the private world, a Class C office building such as this might eventually be demolished. Currently everyone has to meet the new rules of keeping the building basically “as is.” Only under a public money program (subsidies and grants) can many buildings like the WTC rehabilitate and remain economically viable.

The current battle over the fate of WTC is an example of what happens when history meets economics. The battle just happens to be taking place in a very public setting, the San Diego City Council’s Land Use and Housing Committee, which, a couple of weeks ago, agreed to send the idea of turning this old building into transitional and permanent housing for up to 225 people to the full City Council.

Conversion to a homeless shelter is, frankly, the best method to get this problem property off its books. The city apparently cannot sell it, because any prospective buyer would have to retrofit the building. The cost of retrofitting the building, say to a more modern office structure, is currently economically prohibitive, and probably will remain so for the long-term future. Such a buyer would not likely be able to sufficiently upgrade to drive up lease rates enough to justify the improvement.

$31M Project

The city has to follow the same rules as its constituents, so it is now hemmed in with an old building that is functionally obsolete. The other problem with rehabbing the WTC is that the city would have to spend money that it doesn’t have.

The lack of competitive viability of the WTC, coupled with the city’s need to meet its obligations to the homeless, triggered this “solution.”

The homeless project is expected to cost more than $31 million on a building that it owns, and should not, within the context of a downtown commercial market that is currently experiencing high vacancy rates and lowering lease rates.

The very rules that the city created to preserve history now work against the viability of maintaining an old building for the use for which it was intended (commercial office) and force an end-around alternative (homeless shelter) at the cost of jeopardizing the very viability of a historic business district (B Street Corridor).

The economics of owning an old historic structure does not make sense for the city as the owner. It mostly does not make sense for a private owner of a private building.

A Problem of Its Own Doing

This is a problem of the city’s own doing: Through its historic preservation codes, the city has hemmed itself in to a very short list of possible resolutions. A public subsidy solution, such as the homeless shelter proposal, may be the only way out for them.

No one can be happy. For instance, the East Village Association, long an opponent to any additional homeless facilities in its district, took a position in favor of a WTC shelter over a competing idea to expand the St. Vincent de Paul (Father Joe) facility. In its zeal to favor another location, the association has an ironic position that “two wrongs make a right,” which is to say that somehow not concentrating more homeless in East Village, and instead “spreading out” the problem in other parts of the Centre City area, will be good for East Village.

How can putting more homeless in the business district be good for East Village, which is fast becoming a residential and commercial home to the very people who work in the business district? The city’s proposal to add the WTC facility into the homeless mix threatens all of downtown. It doesn’t threaten East Village any less.

Others have argued that on a strictly cost basis, the $31 million that will be spent for renovation could be better spent on housing more homeless and serving their other needs elsewhere and more economically.

Members of the B Street business community are also, obviously, up in arms. Who can blame them? They are surmising that the idea that B Street Corridor businesspeople have to share sidewalk space with pan handlers and shopping carts is not a perfect business message to prospective new tenants, nor old tenants with expiring leases.

The problem with this all is that by placing a homeless shelter near the heart of San Diego’s historic business district — and I use the word “historic” purposely — is to put in jeopardy the historic fabric of that district.

The question becomes, whose history is more important?