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One Who’s Out and Wants In

A man walks into the lobby of a downtown sales office on Sixth Avenue and G Street on a Sunday morning, wheeling his young son in a stroller in front of him.

The glass and marble lobby has flat-screen televisions showing downtown views and condominium interiors and wall-sized photographs of construction sites. But the centerpiece is an architectural scale model of a building beneath a glass shell. The model is three by five by four feet high, detailed out to its balconies, with Matchbox cars and model people in the street.

The boy in the stroller points at the model building, wide-eyed, and says, “Whoa!!”

“Do you want to live in there?” the man asks his son, but the little boy’s face scrunches into a frown, and he says nothing. “Do you want to live in that building?” the boy’s father asks him again. Still no answer from the young skeptic.

The sales manager for the building, Donna Lutz, emerges from a nearby glass-enclosed office and laughs. “That’s not the real building,” she says to the little boy. “You don’t have to live in that. That’s a model. The real building will be a lot bigger.”

In fact, the real building for Vantage Pointe condominiums, when it reaches completion in late spring of next year, will be the largest residential development in downtown San Diego, with 679 condos and 25,000 feet of commercial space. The 40-story project, which encompasses the entire block between A and B streets and Ninth and Tenth avenues, entailed what real-estate analysts say is the largest private construction loan in San Diego County history: $210 million.

The man who’s visiting the sales center today is Scott Spick, and his two-year-old son’s name is Ian. Spick was one of the first people to put a deposit down at Vantage Pointe, back in 2004. His condo will be a two-bedroom, two-bath “K plan,” with north-facing views of Balboa Park from the 17th floor.

He’s visiting today because he has concerns and questions for Lutz.

“Any update on estimated status for completion on our unit?” Spick asks.

“We hope to start moving in our first buyers in April,” Lutz says. “Starting next month, we’ll be giving the construction company a punch list of things that need to be corrected, and then we’ll start walk-throughs after the first of the year.”

“I was reading about all this,” Spick begins, “and I’m wondering.…” His voice trails off. Spick is 33, a musician — “I’d like to say I’m a full-time musician” — but also works as a project manager at Nokia to help make ends meet. His wife Ana used to work for Qualcomm, but now she’s in interior design. Ian is their first child. Spick says now to Lutz, “I’m X amount of dollars into this for the down payment, and I’m wondering, is it better for me to move forward with this investment or to step back and take my money and try to invest it somewhere else? I personally think it’s still a great investment, but I’d like to know my options. Reading through the contracts, I see that there’s a clause that says that after 42 months from my signing on, if I don’t close escrow, then I can get out.”

Lutz says, “If your home is not deliverable by 42 months after signing, then, yes, you’re able to get out of it. But, I tell you, all hands are on deck to make that date.”

“And that is May 2009?”

“Yes, that’s May.”

Spick locked into his unit at a price of $419,000. He put five percent down on the property. “I wonder what it would appraise for right now,” he says.

“Oh,” says Lutz, “at that floor level, at that size — you’ve got 950 square feet — you’d be really hard-pressed to beat $419,000, even in today’s market. I know that because I’m buying a property here, too. I’m in the same boat that you are. And as long as you’re on the upper levels, you’re still very positive. That same home today, list price, would be about $600,000.”

Spick’s face brightens. “Is that at this stage right now?”

“Yes.”

“That’s why I want to try so hard to qualify for this,” Spick says. “And get as creative as possible. With my parents being real-estate agents, they’re saying, hey, you know, do what it takes. We’ll help you if need be.”

Spick explains that he used to live in Golden Hill. Then, in 2003, he and his wife started looking for an investment. They purchased a four-bedroom, 1700-square-foot home in Scripps Ranch. “We should have sold at the peak,” he says. “We have neighbors who sold really well, when we, like most people, were thinking, ‘Let’s wait a little bit and see if we can get a little more out of it.’ So I guess we got greedy and didn’t get out in time, and now we’re stuck there.”

“It’s nice that you got to keep it, at least.” Lutz is alluding to the hundreds of thousands of people in Spick’s situation who’ve been foreclosed on, or short-sold.

“I think, in the long run, if we can hold on to it, that’s the best decision,” Spick says.

“Well, for Vantage Pointe,” says Lutz, “we are allowing co-buyers. So if you do need to add your parents on, the builder is allowing you to do that. Your name still has to remain on the title at closing, but you can add a co-buyer for qualifying or down payment. And we’re going to have some seminars with Wells Fargo, and if you come to those — we’ll let you know when those are — you’ll learn that you can use gift money for a higher down payment.”

“And what about FHA? Does Vantage Pointe qualify?”

“We’re working on that. Right now, FHA has been changing their guidelines. And we wouldn’t qualify today. But we’ll know by the end of November, with the new guideline changes, whether we can proceed with the application.”

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Comments

danwhitehead1 Dec. 3, 2008 @ 6:14 p.m.

I am completely sickened at how a collection of greedy swine took such an easy-going, laid-back, relatively inexpensive place, like San Diego used to be, and RUINED it. I'm glad I got to experience San Diego (and indeed the whole of southern California), before it was destroyed by the locusts.

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Fred Williams Dec. 4, 2008 @ 7:33 a.m.

Do the math:

The average wage in San Diego is just over $40k per year.

Take away just 25% for taxes, and you're left with $30k net.

That's $2,500 take home pay per month.

If half of it is going to housing, (which is high), you can only pay $1,250 per month for your mortgage, HOA, and taxes combined.

Nothing downtown at that price.

Well, let's assume that all the people living downtown are exceptional and make double the average in San Diego...$80k per year.

Still only $2,500 per month for your housing.

So your spouse or partner must make at least another average ($40k) salary just to make ends meet on a one bedroom place. Either one of you lose your job, and you're in trouble. No 401k or retirement savings to dip into for a rainy day now...

In other words, under any foreseeable combination of circumstances there are going to be a growing number of those who cannot afford their downtown condo in the next several years, and almost certainly the alleged values of these properties must drop further from where they are today.

It's a lot cheaper to rent, with no risk of going further under water, I can't understand anyone who is buying at today's prices.

Look at craigslist and see...

The elected officials of our nation, and San Diego especially, at the behest of their development and finance backers, threw fuel on the housing fire during the bubble years. Now, with unemployment shooting up and people's savings wiped out, how will they respond to the new crisis?

One thing is certain. CCDC's job is over. It built out downtown, as it promised, and now we've got too many condos that are simply too expensive for most San Diegans to ever buy.

Now the city needs to concentrate on encouraging wealth creation not through property speculation but by actually producing things of value. I'd like to see the city encourage start ups in some of these vacant units, especially the ones near the ground floor, where telecommuters and knowledge workers can actually find well paid work here.

We'll see what happens over the next decade, but I predict it's going to get uglier still if we don't adapt to the changes in the world around us, or hold our heads under the sand.

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stevewag23 Dec. 4, 2008 @ 1:49 p.m.

You really need to me making $150,000 per year in San Diego to pull it off and live a nice life.

No kids. No dog. No wife.

$300k if you want those things.

Anyone know where to get a job in San Diego for 300k?

And we don't even have topless beaches with Model girls.

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stevewag23 Dec. 4, 2008 @ 1:50 p.m.

danwhitehead1,

Agreed.

So what is the next move?

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NinaNaNaNa Dec. 4, 2008 @ 2:22 p.m.

I think all the people who were interviewed sounded like d-bags. With their "mommies and daddies" paying for these places, and "recent USD Grad's" - what do they know about struggling? Interview a family with two parents working to supports kids and a house and how stressed out they are about making their mortgage that they busted their a**es for and took everything they had to get into in the first place and it would really change the tone of this article. I don't feel bad for these people....at all. Maybe Spick, because at least he seems intelligent.

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danwhitehead1 Dec. 5, 2008 @ 5:42 a.m.

To Stevewag23: I really have no answer as to the next move. The damage has been thoroughly and extensively done. I left in complete and total disgust in December of 2000. The San Diego that exists now is a sickening, loathsome aberration of the real San Diego. At this point in time, I wouldn't care if I never saw it again (and I NEVER thought I'd live to say such a thing!!).

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stevewag23 Dec. 5, 2008 @ 9:59 a.m.

NinaNaNaNa,

Lets not talk bad about USD.

Its one of the last bastions of class this town has.

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stevewag23 Dec. 5, 2008 @ 10:02 a.m.

danwhitehead1,

I have to hand it to you.

I moved back in 2000!

You are smarter than me.

A lot of this country is in a similar boat so its difficult at times to figure where to move.

Any suggestions?

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nofears Dec. 5, 2008 @ 7:38 p.m.

What a great article for all San Diegans. I came across the same article as NinaNaNaNa and saw her comments. It was a good article because it was San Diegans honestly sharing thoughts about their City and it's future. That is what The Reader is, and has always been, about. I have lived here since 1963 and I miss the old San Diego, too. But, it's always your choice where you live. BTW, NinaNaNaNa, have you met these people or walked in their shoes? USD has always been about excellent grades, scholarships and ethics. Rich kids get expelled. Did you really read the article or are you just standing on a pedestal playing poor me? Are you raising your children to be victims of the economy or to hate what is evolving? If you can take the time to criticize, you must be intelligent. Why don't you take the time to go to City Hall {202 C St. 12th Floor}? Do something to make your children proud and not embarrass them further.

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JohnnyVegas Dec. 7, 2008 @ 3:13 p.m.

Anyone know where to get a job in San Diego for 300k?

And we don't even have topless beaches with Model girls.

By stevewag23

Only place to get a $300K per year job in San Diego is with the government-and that would include the benefits.

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JohnnyVegas Dec. 7, 2008 @ 3:19 p.m.

USD has always been about excellent grades, scholarships and ethics. Rich kids get expelled.

By nofears

nofears, USD expells no one. USD is simply a trust funder univerity who gives every advantage to their rich pampered students.

I personally had a trust funder friend at USD who would have not lasted 2 semesters at San Diego State-but because he was at USD he was allowed to withdraw from classes on virtually the last day of class-which he did repeatedly because he was failing and would have received an F. This went on for 8 years. He withdrew from 1 specific class he needed to graduate on 9 different occassions.

BTW-this clown finally graduated with this extra ordinary private university flexibility-which you would never in a million years find at a public university.

Dont tell me USD is the meritocrocy of education you make it out to be. It's not.

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nomasbean Dec. 8, 2008 @ 12:26 p.m.

Oh my God! I don't think I've ever read so many lies.

There aren't going to be any walk throughs" or punch lists for months and months!
No one is going to be moving in in April OR May. I work in that building. It's so far behind schedule it's a joke.
We have all heard that all of the unsold units are going to be rentals.
What a crock.
Run away!!!!

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Burwell Dec. 10, 2008 @ 10:33 p.m.

Spick should bail out of his condo and face his family responsibilities. Downtown is no place to raise a child. The area is rife with dopers and drunks. He should give up his dream of a fantasy lifestyle that he probably can't afford and remain in Scripps Ranch where the schools are decent. He's never going to get a loan to buy the condo anyway. Lenders know that he'll walk on the Scripps Ranch loan if he receives a loan to buy the condo. They've seen the pattern over and over.

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JulieParrots Dec. 10, 2008 @ 11:31 p.m.

I agree with Burwell that the schools are decent in Scripps Ranch. If not in Scripps Ranch then in Carmel Valley. You can't raise a kid in downtown. Spick should get out now while he can.

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mythusmage Dec. 11, 2008 @ 9:17 a.m.

Hate to tell you this, but more than a few of you are being a bit too optimistic. When things go pear shaped you're going to see condo projects being abandoned outright. No finishing, nobody moving in. Shooting galleries with stainless steel washers and dryers.

What will change things?

Federal indictments. Indictments on people in local government. Indictments on upper management at the Union/Tribune. Indictments on upper management in construction companies. San Diego will have to go into receivership, with a Federal judge as "Governor General".

Add in one or more local judges, plus at least one state official (Yo, Moon Beam!) in that list of indictment recipients, and San Diego's gonna be a happening place pretty dang soon. You'll know things are going down when Mike Aguirre is called to testify before certain Congressional committees and sub-committees.

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danwhitehead1 Dec. 19, 2008 @ 10:30 p.m.

Mythusmage

Don't faint when you read this, but you are 100% correct and I couldn't agree with you more as per your above comments.

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stevewag23 Feb. 2, 2009 @ 9:03 p.m.

"Only place to get a $300K per year job in San Diego is with the government-and that would include the benefits."

Yeah, but what about the topless beaches with Model girls?

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stevewag23 Feb. 2, 2009 @ 9:04 p.m.

"Downtown is no place to raise a child. The area is rife with dopers and drunks."

It actually could use more dopers.

It would make it more fun and we would get more tourists coming in.

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mitthbevnuruodo Feb. 3, 2009 @ 11:11 a.m.

Anyone with kids in downtown would be transporting their kids to private schools anyway. They surely won't send them to public ones there. There are surely not load of dopers compared to how it used to be. Friends used to hold gigs in Croce's basement in the mid 80's, when Croce's was the only place there. Now there were dopers then! Or even round '90 when we used to track from 5th ave down to, oh was it 9th and G St? to go to Java, now there were really dopers!

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