May 2010 home page


Daunting Obstacle Course: Let’s talk
Dwight Worden | Sea View Avenue

Olde Del Mar Village Center.  from www.delmar.ca.us



The impediments to downtown revitalization are many, but unfortunately, the city has the ability to influence only a few.

Here are the impediments I have identified and my take on whether the City can influence them. This is my own work product, reflects only my own personal view, and I do not speak for the Form Based Code Committee. I would hope thinking about these issues will stimulate discussion. To me it remains an open question whether the City can and should influence enough of these key factors to make downtown revitalization viable.

All these factors are driven by the private market place or by state law and not by the City.

* High land cost. Del Mar has very high land costs making any downtown acquisition and redevelopment expensive.
* Rental rates. The return an owner can get from downtown commercial property rents is driven by the private market, not by the City. Market rental rates may or may not justify the cost of redevelopment; the proverbial: will it pencil out?
* High construction costs. Construction costs in our area are very high driven by labor rates and materials costs and by other factors beyond the control of the City.
* Property tax issues. Many downtown properties have not changed hands for years and have low existing Prop 13 tax rates and would face the prospect of upward reassessment incident to redevelopment, a disincentive to revitalize.
* Financing. Financing costs for acquisition and construction are major factors not controlled by the City.
* Availability of financing. Recent history tell us how little control the city has over the availability of financing for private projects. When private market financing is not available redevelopment will not happen.
* Competition. Goods and services are available outside Del Mar with easy access and at generally better prices (harsh to admit, but true).
* Owner's personal circumstances. Each downtown property owner has personal and financial circumstances that motivate in favor of, or against, redevelopment of their property . These often include cash flow issues, tax concerns, estate plan issues and other factors not driven by the city.
* Nonconformity requirements. Many downtown buildings are currently non-conforming. Redevelopment of these older buildings requires upgrading to current code (electrical, plumbing, ADA, glazing, etc.) in many cases . Costs for such upgrades are substantial.
* Access to town. Del Mar has only one main road in and out and limited public transit.
* Downtown physical layout. Del Mar's downtown is restricted to a strip along CDM and a small portion of 15th street. We do not have the layout to design a downtown, for example, around a town square.


* Carrying costs. The city can reduce permit processing time somewhat but cannot eliminate the time needed to design, engineer, construct and sell out/lease-up a project nor can the City influence loan servicing costs during this period other than by shortening permit processing time.
* Critical mass. Destination shopping requires critical mass. Currently, Del Mar does not have critical mass as a shopping destination. The city can help change this by increasing the density of downtown. But, Del Mar may be too small to generate true critical mass. And, the more diversity we foster in the types of businesses downtown the less critical mass we have for any given sector.
* Process predictability. The city can make the outcome of its development review process more predictable, although some uncertainty and variation will remain as humans (planning director, DRB, Planning Commission, City Council) will interpret standards and guidelines. Increased predictability increases the willingness to revitalize.
* Parking. Adequate parking can be provided but the costs for structures and other solutions are very high and raise a number of issues. For example, a 100 space parking structure costs about 3 million. No funding sources are currently in place for such solutions.
* Pedestrian friendly. Streetscape, sidewalks, and other pedestrian amenities that draw customers are important and can be provided but the cost will be high.
* Lot size. Many downtown lots are small or awkwardly shaped. The city can facilitate lot re- consolidation but cannot change the requirements of state subdivision law nor compel adjoining owners to cooperate.
* Coastal Act requirements. Del Mar is entirely within the coastal zone and subject to the requirements of the Coastal Act and the Coastal Commission. The Act and the Commission have the final say on many aspects of downtown redevelopment including LCP amendments, neighborhood parking plans, and other key decisions. The City has some ability to influence these decisions but no final control.
* Traffic congestion. Del Mar's downtown experiences traffic congestion during the fair and race seasons, during high visitor summer months, and during daily weekday commute hours. Del Mar has only limited ability to ease traffic ( traffic circles vs. stop signs, etc.)
* CEQA review. CEQA will require an EIR on the FBC which will probably take six months to one year to complete and which will impose substantial costs on the city. The process will also require analysis, and perhaps adoption, of alternatives that are viewed as not ideal from a local perspective but which have less adverse regional impact.

Measure B. Measure B requires the preparation of a Specific Plan for certain downtown projects and voter ratification thereof. The city gov’t cannot alter measure B but the voters can amend or repeal the measure.
What does it all mean? Most of the key impediments to downtown revitalization are outside the city’s control. To overcome the major cost disincentives imposed by these outside impediments the city will need to dramatically change the few key factors that it does control, i.e., major increases in downtown density and major reductions in city review processes will be required to overcome the impediments that are outside the city’s control. Small, incremental changes are unlikely to work.
This means either that the city will, in my view, face the tough choice of adopting an FBC program that dramatically changes downtown - - doubling its density or more-- to craft a program that has a chance to work financially, or of adopting a more modest program likely to languish on the shelf unused. Each of these scenarios has its problems. The “doubling of downtown” scenario raises real issues of traffic congestion, parking, and quality of life. I believe a public vote on such a program is important and that the City Council should commit now to holding a public vote ratifying, or rejecting, the FBC program after it is adopted by the City Council. And, it seems clear to me that whether or not DRB review exists for FBC projects, while an emotionally charged issue and important when one’s view is at stake, is a relatively minor issue compared to the other impediments to redevelopment.
It also seems clear to me that most of the impediments to downtown revitalization that the city can influence will require large amounts of money to address (improving streetscape, construction of parking structures, etc) . The cost to do even some of these will be in the millions. At present the city has no ability to finance such undertakings. Accordingly, a financing plan needs to be part of any serious FBC program.
Absent a financing plan to pay for needed public improvements, the inevitable outcome of the FBC process will be relaxation of the requirements imposed on private property owners and increased density without the financing to implement the equally important public improvements and benefits to make the increase in density compatible with the community. For the FBC to succeed both aspects of the FBC must proceed at the same time: increasing density to provide incentives to private redevelopment and financing and installation of needed public improvements.
I believe we should have a robust city-wide discussion now, so that the community’s views can help shape important aspects of FBC. How big we want downtown to be? What kind of pubic amenities we will insist on? How much we are willing to relax development controls and increase density to provide enough “drive” to fuel revitalization of our downtown? I hope this brief review will stimulate thinking that is rooted in reality with respect to the many impediments to downtown revital



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