The San Diego City Council on Monday voted to seek a closer analysis of a privately owned building on Second Avenue for use as a homeless shelter, days after Mayor Todd Gloria announced he would no longer pursue a shelter at vacant warehouse in Middletown.
City staffers presented the council with three potential shelter sites: a soon-to-be-vacated office building on First Avenue, the former Central Library on E Street and a mixed-use building on Second Avenue. The first two sites are owned by the city while the third is privately owned and available to either lease or purchase. The city has not yet released the private property's address.
The city estimated it would cost $45.2 million to convert the City Operations Building into a shelter. Doing the same to the former library site would cost $86.8 million. Both buildings would take 46 months to rehabilitate.
Councilmember Sean Elo-Rivera said those price tags would be hard to justify in a budget crisis.
"I have concerns that that will either completely blow up our budget related to homelessness — not allow us to do things that are working like prevention and diversion — and it won't bring beds online that quickly," Elo-Rivera said.
The council ultimately voted to request a more detailed presentation on the Second Avenue property, and to request the expansion of an existing shelter in the Midway District operated by Veterans Village of San Diego. The council also asked for the former Central Library to be fully redeveloped into any number of uses, including permanent housing.
“I thank the City Council for their vote today to move forward our critically important effort to expand shelter and help people come off the streets and get connected to assistance and housing," Mayor Gloria said in a statement following the council's vote. "Our sustained action over the past several years is turning the tide on this crisis, and additional shelter will help ensure our progress on reducing homelessness and ending unsafe encampments continues."
On Friday, Gloria announced he saw no path forward for his ambitious project to convert a 65,000-square-foot commercial building to a shelter providing on-site security, meals, housing navigation and case management services and space for 1,000 beds.
Gloria came to a tentative 30-year lease deal with the landlord in July of last year, at a cost of $1.95 per square foot with annual 3.5% rent increases and an estimated $12.5 million in facility maintenance costs over the term.
However, the city's Independent Budget Analyst (IBA) — an independent office intended to review and publish reports on the mayor's budget moves — advised the council to proceed with caution, warning that the deal could lead to another costly real estate misstep, such as 101 Ash Street.
The IBA acknowledged the need for shelter space but warned that the lease was above market rate and would cost San Diego $72 million over 30 years.
"The proposal represents an opportunity to change the city's current approach to shelter by pursuing permanent emergency shelter and potentially provide needed replacement and new shelter beds," the IBA report reads. "However, the proposal also comes with an above-market-rate lease, as well as significant upfront and ongoing costs associated with rent, lease operating, tenant improvement and program operating costs."
With a looming budget deficit and the quoted rate, the council balked, delaying any agreement until Gloria's pivot on Friday.
