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City Picks Pair of Developers for Sears Site; Price Is Unknown

January 26, 1988|LEONARD BERNSTEIN | Times Staff Writer

Despite questions over how much the city actually will earn on the deal, the San Diego City Council Monday chose two developers to build a $46.6-million "urban village" on the site of the former Hillcrest Sears store.

The council's selection of The Odmark Development Co. and Oliver McMillan Inc. to build stores, offices and homes on the Cleveland Avenue parcel ended a three-way competition among developers for exclusive negotiating rights with the city. The 12-acre parcel has been vacant since Sears closed its doors in March, 1986.

If plans proceed on schedule, the council will approve an agreement with the developers Feb. 16 and review their plans May 23--in time to receive at least $9.6 million as payment for the land and use the money for currently budgeted capital improvement projects.

Possible End of Uncertainty Over Site

The payment would end troublesome questions over whether the city could recoup the investment it made when it bought the site for $9 million in 1986 at the urging of former Councilman Bill Cleator, who wanted to turn the site into a new central library. The council rejected that idea later that year.

In November, consultants told the council to expect just $7.2 million if it sold the land under restrictions limiting retail space. But at Cleator's urging, the council softened its stand and changed the "restrictions" to "guidelines" for developers.

Just how much the developers will pay for the land was the subject of some debate at Monday's council meeting. While the only other serious bidder, Trammell Crow Co., promised the city $10.5 million, the Odmark-McMillan team offered $9.6 million to $10.56 million, depending on whether the council decides whether certain off-site improvements are necessary.

The cost of improvements such as rebuilding the Vermont Street bridge to the site or replacing the main sewer line down University Avenue would come out of the additional $960,000 the developers have offered to pay. In soliciting bids, the city had demanded at least $9.5 million for the site.

"I have a problem, because when I look . . . I see Trammell Crow offering $900,000 more for the property," said Councilman Bruce Henderson, one of two council members who voted against Odmark and McMillan. "I just can't support, with the information I have, accepting the bid that appears to be $900,000 less than the Trammell Crow bid."

"I am very leery of approving contracts with unknowns and uncertainties," added Councilwoman Abbe Wolfsheimer, who voted for the deal. "I want to know what the price is going to be."

City Manager John Lockwood was instructed to return to the council in three weeks with more precise figures on how much Odmark-McMillan will pay for the land and the 265,000-square-foot Sears store, which will be demolished as part of the redevelopment.

Bradley Geier, a partner in Trammell Crow, also told the council that his company's proposal was closer to what the city requested when it solicited bids. Trammell Crow proposed to build less commercial space and more housing than Odmark-McMillan, in keeping with the city's desire that the site not become a huge strip mall that would steal customers from existing Hillcrest businesses.

2 Acres for New Mormon Church

Trammell Crow would also sell two acres to the Mormon Church for construction of a new church and offered to build a slightly larger community center, Geier said.

"They are offering us almost $1 million more and they are putting in less commercial (space), which is what we were told the community wanted," said Councilwoman Judy McCarty, who also voted against Odmark-McMillan's selection.

Councilman Ron Roberts, whose 2nd District includes the Sears site, was purposely absent for the vote because Odmark-McMillan is proposing to hire the architectural firm where he was formerly employed, said Roberts' aide, Paul Grasso.

Odmark-McMillan scored points with the city's selection committee for meeting often with community members to discuss the process, for lining up a Ralphs supermarket to anchor the development, and for negotiating purchase rights to adjacent parcels on 10th Avenue and University Avenue to expand the project.

"It was really a matter of choosing the best of two very qualified proposals," said James Spotts, the city's property director.

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