me excuse development are supposed to make answer communities more sustainable, convenient and if affordable places. KPBS with water Allison St. John says that it -- housing is in high demand, and -- new retail storefronts can find tenants . a mixed-use developments in Mission Valley. Hundreds of -- and sizes have spread up around it, he was once an architect and teaches architectures ptosis students this project is an example of the kind of community San Diego needs to build the house it's called growing population. any ideas that you have a community here's a part that's coming -- here's a part that's coming in and run for the -- through the entire center, you have their own shopping and you have office buildings which will be cooling in provides job. They begin to throw in the needs of housing, retail, and jobs for the future. Rather than building housing, new developments have to have a sustainable mix of homes, offices and shops that means you don't always have to get a new car if you need to unload the bread -- bread (-left-parenthesis-open paren to no caps, his rule of thumb for a circle commute complete community is a popsicle will. Thatchild can walk and get a popsicle and walk home before the whole thing melts. Very few neighborhood provide for that situation. he refers to an empty lot where the developer parents to build -- at street level. What's going to happen over here is the fog is Palm trees and vacant lot will be retail. It will have all the residents that will live in the area. This kind of mixed-use is the way to make density more desirable. If they can build higher density housing it has to be done right. Some mixed-use development has been in planning's ages and now they are running into problems. In San Marcos the creek side promenade project that open last year and two stories -- to stories of affordable housing above. It has a waiting list of 700 most storefronts are empty. She says the city is rethinking of the project . I was sent ten, this is a walkable community words you don't have to get in a car to get a gallon of milk will go to the dry cleaner store -- cleaners store Baker, that was a full intent, the retail on the first floor maybe professional officers on the next -- offer this on the next four and residential up above. We have a plan for seven stories, but it hasn't really worked. Bassman says the retail spaces not find -- finding tenants. To retail stores, the mom-and-pop shops others troubling because of the online sales. A lot of myself included, Amazon is quicker and easier to buy online then go into the store -- than going to the store. San Marcus is not the only city -- seniors thinking of, this is beside the point that open last year which with 70 affordable housing unit that available -- the shops when those are dark at the skill a relatively new shopping center in Vista, the city granted the developer a permit to knock it down and build 88 housing units instead, there's another reason this trend is important, San Marcos -- said the city search simply cannot pay city services on property taxes alone. Property taxes don't even pay for police and fire. Sales taxes can, that's where we get most of our dollars to pay for the general fund. Proposition 13 in the 1970's Limited out as property taxes could rise. Now, cities rely more and more on building shops and retail to generate the sales tax they need to balance their -- they need to balance their budgets. You saw in the last decade or two while the -- of the big boxes, you are clamoring to get those to get sales-tax dollars to help offset some cause. Now even some of the big box stores are closing our -- as online shopping takes over. The project to increase its not materialize as expected . something the city . something the city has to grapple with it's a. -- peer than -- its appear then shift. In these North country communities, the model of sustainable communities for families could run out the store or again -- a get a haircut without getting in the car is not working up as planners had hoped. . joining me this day and -- is Dana queue -- Cunard real estate lecturer at San Diego State University, Dana welcome to the program . as you just heard, this mixed-use developments are struggling to find retail tenants, is or something specific to mix use art is very retail week nationwide . I think it's a nationwide phenomenon I don't think it's going to change except even more so. We heard someone saying in this report that online sales are eating into retail, is that the bottom line is why retailers struggling as Mac. That's a single biggest problem yes. What kind of -- yes. What kind of retail outlets the community planners have in mind as part of the mixed-use housing developments ? I don't know that they thought through when these things were -- when these things were being planned years ago, the exodus of good goods from the local shopping place, but now with what they know, they have to and the sip date the services -- the services set your will have to. Most of the load. That means a kind of popsicle shops basically that we heard about. Right, things that you can't order online and services and get online. Is it an expensive for someone when is that mom-and-pop service with retail to relocate from where -- wherever they are to a new mixed-use retail and housing density development ? they probably if they are moving from an older property, they will experience higher operating expenses, most are structured on a triple net aces. Moving into a new project with no construction costs will not want necessary -- will necessarily increase that expense. You have spoken with some developers -- know spoken with some developers were having difficulty finding retail partners, are they assuming they won't find a tenant and then increasing the housing unit cost to make up for it . Performance have to make sure that it will work regardless of how long to get a tenant and that's square cold footage is a minority of the project and because residential is doing so well, the solution can be simply in the increase in residential went's as a projects been developed and that will save the project in case we -- retail doesn't go. If what retail that's just go with icing on the cake then -- then. Correct . Or have we seen -- were producing successful development that are able to find retail. It's more of a functional workability and compatibility of uses, -- abuses, synergy of retail out it's, the idea that one isn't going to walk just to get a popsicle, but also to do something else on -- on the way. That's energy is easy to see in hindsight winds once it's happens very has a plan for very hard to create, it has happened. What is that leave -- does that leave city planners to mix this was meant to encourage more than -- density and more of that sort of neighborhood to which is good for the environment and in that reducing commute to work it seems like what you are saying is you already need density for these projects to have a good shot at succeeding. Absolutely in the example -- in the example in San Marcos, a gentleman mentioned seven-story project in been should be -- endangered became a three-story project look what has done in the customer base and that specific location. You need density. There are in the areas of downtown that have a minimum for Illia racial you can build no less than a square amount of square feet because they blessed -- recognized the benefits of density. Are the neighborhoods where this high-density concept is actually working ? the normal Heights area around the corner middle section of Golden Hill is not working now working a small shop walkable neighborhood health. Not that's because that neighborhood structure was already there before these housing and next use development when in. I, there's still amount of apartment development and small house development and just does fall like -- Oswal lot idea even if it is and -- even if it is and attach product lends itself for more density and given square miles . We heard the kind of dream concept of having a mixed use development with the retail on the bottom maybe even -- maybe even some offices businesses and in the high-density housing on top of that area we heard that dream, will high density work even without -- high-density work even without retail, will it work just building more housing unit because we need them so -- so desperately ? essentially, the city rents and house prices are beyond getting out of hand and we have to have more permitted units so what I see us -- as a solution absolutely planners ideal of retail on the ground floor is flex based on the ground floor that can be temporarily residential that can warp into retail -- retailers that are more and more residence in the -- residents in the area. You know any developments are being built along those lines. I don't, but -- that we should do one. Okay. I've been speaking with Dana Kuhn. Thank you.
Mixed-use housing developments are supposed to make dense communities sustainable, convenient and affordable. But that vision is threatened by a trend emerging in some communities: new retail storefronts can’t find tenants.
Mixed-use developments make density more desirable
In Mission Valley, residents walk their dogs across an open space that will one day be a park at Civita, a new mixed-use development.
Mike Stepner, who was once the San Diego city architect and now teaches architecture, tells his students Civita is an example of the kind of community San Diego needs to build in order to house its growing population.
“The idea is that you have a 'complete community,'” Stepner said, pointing to a map of the finished project posted near the park. “Here’s a park that will run through the center, you have your own shopping, you will have office centers that will be going in that will provide jobs.”
Rather than building just housing, Stepner said, new developments need to have a sustainable mix of homes, offices and shops. That means you don’t always have to get in your car if you need a loaf of bread or a pint of milk.
Stepner's rule of thumb for a complete community is the “popsicle rule."
“Your child can walk and get a popsicle and walk home before the whole thing melts,” he said. “Very few neighborhoods have been built in recent years that provide that sort of situation.”
Stepner pointed to an empty lot across the road from the soon-to-be park, where the developer plans to build a multistory building, with housing above and shops, pubs and restaurants at street level.
“What’s going to happen here will be retail,” Stepner said. "Retail that will begin to serve all the residents in this area. I think you can build higher density housing, but it has to be done right.”
Mixed-use may not always work
Some North County mixed-use developments that have been in the planning stages for years are now running into problems.
In San Marcos, the Promenade at Creekside opened last year with shop fronts at street level and two stories of affordable housing above. While the housing now has a waiting list of 700, most of the storefronts at street level are vacant.
Mayor Jim Desmond said the city is rethinking the project.
“That was the intent, to make this a walkable community so you didn’t have to get into your car to get a gallon of milk or go to a dry cleaner or to a baker," he said. “It was going to be retail on the first floor and maybe professional offices on the next floor, and then residential up above. We actually had plans up to seven stories. But that hasn’t really worked.”
Desmond said the city is now reviewing the whole project and considering reducing the retail to perhaps just a corner store, because the retail space is simply not finding tenants.
“The retail stores — the mom and pop shops — are struggling now,” Desmond said, “primarily because of the online sales. A lot of people — myself included — go to Amazon to buy things. It’s sometimes quicker and easier to buy things online than it is to go to the store.”
San Marcos is not the only city rethinking its mixed-use projects.
Vista’s Paseo Point opened last year with nearly 70 affordable housing units. But “available for lease” signs are still plastered on the windows of the shop fronts below.
At Breeze Hill, a relatively new shopping center in Vista, the shop windows are all dark. The city council has granted the developer a permit to knock it down and start again with 88 housing units instead.
Cities lose sales tax
There’s another reason this trend is important. San Marcos Mayor Jim Desmond said cities simply cannot pay for essential services with property taxes alone.
“Property taxes don’t even pay for police and fire,” he said. “Sales tax is king — that’s where we get most of our dollars to pay for the general fund.”
Proposition 13 in the 1970s limited how fast property taxes could rise. Now, Desmond said, cities rely more and more on building new shops and retail to generate the sales tax they need to balance their budgets.
“You saw in the last decade or two — all the big boxes,” Desmond said. “We were all clamoring to get those to get sales tax dollars to help offset our costs.”
Now even some of the big box stores are closing, as online shopping takes over.
In California, online stores have to pay sales tax to the city where their customers made the purchase. So far, the evidence suggests sales tax revenues have continued to increase gradually in the past few years since the economic downtown.
A comparison of North County city budgets now and in 2009 shows sales taxes make up about the same share of city budget now as they did then.
But the projected increase from the new mixed-use developments has not materialized as expected.
In these North County communities, the model of sustainable communities — where families could run out to the store or get a haircut without getting in the car — is not working out as planners had hoped.
“It’s something that cities have to grapple with,” Desmond said, “because it’s a paradigm shift.”
