SAN DIEGO -- The San Diego City Council unanimously voted Monday in favor of a proposal to renovate Horton Plaza into a mixed-use retail and technology office facility.
The Los Angeles-based real estate investment firm Stockdale Capital Partners acquired Horton Plaza last August from prior owner-operator Westfield with the intention of redeveloping the dilapidated shopping center, which opened in 1985.
The firm said when it announced the purchase that the redevelopment is expected to generate more than $1.8 billion annually and create as many as 4,000 jobs.
According to the city's agreement with Stockdale, the firm will reduce the current retail space from 600,000 square feet to a minimum of 300,000 square feet. The rest of the property will be repurposed into 772,000 square feet of office space that the company expects will attract tech companies as tenants.
Should Stockdale confirm an office tenant for more than 100,000 square feet, the minimum retail space requirement will be lowered to 200,000 square feet. The firm is also required to construct four additional floors for the existing Nordstrom building and complete various renovations to the Bradley Building.
"I'm very excited to see where this is headed," said City Councilman Chris Ward, whose district includes Horton Plaza. "It's just going to catalyze so much ... of the energy that we see happening downtown."
As part of the agreement, the city will amend its current land use restriction rules for Horton Plaza, allowing for the downsizing of retail space. In return, Stockdale will be required to provide $6.7 million in public benefits to the city as a way of recouping the lost retail revenue.
To do so, the firm must provide Horton Plaza with at least two security officers on duty 24 hours-per-day, year-round. Stockdale must also extend the Lyceum Theater's lease at Horton Plaza at its current annual rate of $1 beyond its expiration in 2035 for the minimum amount of time necessary to recoup the $6.7 million, estimated to be roughly seven years.
"I'm particularly excited that this will be another incentive to keep (UC San Diego) and (San Diego State University) graduates in San Diego," said City Councilwoman Barbara Bry. "UCSD has said that within five years, we lose about half of the engineering graduates to other cities."
Opponents of the agreement, including Jimbo's ... Naturally! founder Jimbo Someck, argued that Stockdale has no plans to respect the shopping center's current tenants or their leases.
Stockdale representatives assured current Horton Plaza tenants that they are welcome to stay in their current locations and will not be evicted in favor of new retail outlets.
"We really think this can be the epicenter," said Dan Michaels, Stockdale's managing director. "Horton Plaza used to be something special, everyone knows that. I grew up going there as a kid. We want to make it special again and economically impactful to the community and we think that this does just that."
Stockdale intends to break ground on the Horton Plaza renovations later this year. The new redeveloped plaza is scheduled to open by the end of 2020.