Horton Plaza Poised To Become Tech Office Hub

Horton Plaza once transformed downtown San Diego and its new owners believe it can do it again. The 900000 square foot location has been sold for a price estimated by the San Diego Union Tribune as one hundred seventy five million dollars by Stockdale Capital Partners. When the Horton Plaza Mall opened more than 30 years ago it was seen as the new image of a rejuvenated downtown San Diego. The new owners are calling their vision of ultra modern office buildings on the site. The campus at Horten and they hope to attract new high tech businesses. Joining me is San Diego Union Tribune reporter Jennifer Van Grove. And Jennifer welcome. Hello. So tell us more about the vision for the future. Horton Plaza I know it won't be named that but what will it look like. Well how it looks it is still being figured out. But the new owners Stockdale they want to tear it down to the studs and rebuild it completely. So it's not a complete turnaround but it's a complete overhaul of the existing space as we know it today so it will look nothing like the way it looks right now. And their vision is to court the high profile Bay Area tech companies that haven't set up a satellite campus here in San Diego. And their logic is that these companies have avoided San Diego because we don't have the type of space that they want particularly in the downtown area where everything is kind of like locked up in these towers that have smaller floor plans. So they want to use a building like the Nordstrom's building which is currently empty and they want to use that as you know a big office for a company of Facebook's caliber Yelp's caliber Linkins caliber. And so the idea would be to transform not space into this very what's called efficient floor plan where you know you have these big long floors and escalators that kind of take you know employees between the floors and there's just kind of like open space where in theory companies get to save save time on resources who don't have to like take elevators back and forth. I see. So what what is your conception of the kind of density that the new developers are talking about is a good question. And I know I don't have the answer to that question but my understanding is they want to use a bow. I think it's more than two thirds of the space which is 900000 square feet for office. So that would be a majority of the space that's there now would be office. And then you know just the ground floor would be retail. And when I say retail I'm not talking about you know traditional stores that are Horton Plaza. Right now I'm talking about you know very very attractive Lake eateries entertainment destinations that would that would cater to these types of high tech workers along with you know other residents and downtown that have kind of come in and in the past like 10 years with all the development going on. Now just one hundred seventy five million dollars for the sale of Horten Plaza seem low to you. So I don't think that it seems low. My initial reaction was oh that's really high. But I talked to someone who's kind of an expert in these things and he broke it down for me. So I guess the surrounding area typically gets 50 to 70 per far which is floor area ratio. And so when he did the math based on the 900000 square feet that there is now along with there's a potential for one point five million more square feet in an office tower that that's totally hypothetical but that potential means that per far ratio would come out to seventy two dollars which makes it at the high end. But given that it's Horton Plaza given you know it's location. He said that that price was completely fair. Now as you know when Horton Plaza opened in 1985 it was really seen as a model of urban redevelopment. But since then a lot of the main department stores have left etc.. Can you explain how Horton Plaza lost its status as a downtown destination. I think there were so many factors the big two big factors are of course you know this change and how people shop in moving towards e-commerce and Horton Plaza's own design which was built like a fortress that was part of the design plan because you know the idea was to keep people out from the surrounding neighborhood which wasn't exactly safe at the time but now you know we had we've had all this residential development downtown and people are aren't necessarily going into the mall because it's not easy to get into even though there's parking. It's not designed in such a way where you actually want to shop there. And so those two forces have really affected the ability of Horton Plaza to do well and plus if you look at Westfield which was the prior operator owner they they put a lot of resources into redeveloping UTC and they kind of oscillated on what they wanted to do with this properties so they let it fall into disrepair if you will because they didn't really invest in it. They put you know energy into that park and the city helped finance that. Horton Plaza Park situation but other you know remodeling the mall and kind of you know making it more modern they stagnated on making those decisions and eventually decided to sell it. Do you know how do you get a sense of how downtown residents and city leaders feel about this new project. You know I've heard rumblings for and against. And I would say you know I don't have a sense of how this would do because it will have to come to city council at some point. So there's this thing called the Horton Plaza owner participation agreement that basically dictates how that land can be used. And in that document it requires that 600000 square feet be east of retail in so Stockdale's going to need a new owner participation agreement and any sort of changes to that that's going to have to go in front of City Council. So you know it's hard to say how City Council will vote on something like that but I think the feeling is that everyone can agree that what's there now doesn't work. So there will be a consensus on that and whether you know office makes sense. That's up to Stockdale's to pitch. But if there's a downside from the city's perspective it's that you have this great piece of land and maybe Stockdale isn't doing enough in terms of density. So that will be interesting see what are city leaders are kind of expecting from that piece of land. I've been speaking with San Diego Union Tribune reporter Jennifer Van Grove and Jennifer thank you. Thank you.