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San Diego in a Housing Bust but Mission Valley in a Housing Boom?

The housing market has been depressed for a few years now, prices are way down, foreclosures and bank-owned properties are everywhere. We have all figured out that the party is over....all of us that is, except developers in Mission Valley. There is an enormous glut of housing on the market, so much that the Federal Government had to come in and purchase foreclosed properties to keep the market from totally tanking and YET Mission Valley is experiencing a BOOM! You would think it was 2003 all over again.

Civitas is one of the largest developments in San Diego. Its a 230-acre mixed-use project being built in San Diego's old quarry. How can San Diego be in the middle of the largest housing bust in history and simultaneously be experiencing this boom? Why would a developer build a project of this magnitude in this market?

http://www.reuters.com/article/2011/05/31/idUS209361+31-May-2011+BW20110531

Maybe it helps to understand who this developer is. He is Stephen Haase: President of Sudberry Properties. He previously worked as assistant director and acting director of the City of San Diego Development Services Department.

“Mr. Stephen M. Haase provides entitlement support for the company's retail and mixed-use projects, including the recently approved 230-acre Civita mixed-use development in San Diego, CA. He is actively involved in project design and community outreach to achieve the company's goal of delivering the highest quality development.”

“He joined the company in 2006 after 16 years in the public sector where he managed large, complex organizations responsible for all aspects of land use, planning and building safety.”

http://www.sudprop.com/about/profiles/shaase.html

So essentially Stephen went from running Development Services to a job in the private sector for a for-profit development company and received the largest development deal in Mission Valley to develop 230 acres in mixed use. The project was approved by City Council in 2008 and broke ground in December of 2010.

Coincidentally, the project was approved at the same time Haase was serving as a primary member on the Mayor's Technical Advisory Board a board which had expanded its role in a very questionable and perhaps illegal way...

"To proactively advise the Mayor and the Land Use and Housing Committee on improvements to the regulatory process through the review of policies and regulations that impact development."

The meeting minutes of this board show they discuss everything from building codes, height limitations, streamlining their permit process, how they should take advantage of their relationship with politicians, their own fees and my favorite quote "if the public benefits they should pay". One particular note from Haase in the minutes was his recommendations with regards to green building code requirements: "Stephen Haase stated should not need third party certification, should be local discussion."

Is this another case of the Mayor throwing his weight around to get his friend this project? (see the Kessler lawsuit) http://www.sandiegoreader.com/weblogs...

No matter how you spin it something isn't adding up here. This project begs alot of questions.

How is this project being financed?

Why is this project being financed?

How much did the developer pay for the land?

Who is paying for all the infrastructure?

Did the Mayor help Haase get this project approved?

Is this a Delaware LLc hiding the names of individual investors?

Is this project being subsidized by the City of San Diego?

And perhaps most importantly how did Haase get away with serving on the Mayor's Technical Advisory Board WHILE this project was being approved by the City? and thus...Why isn't the FBI looking into this?

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The housing market has been depressed for a few years now, prices are way down, foreclosures and bank-owned properties are everywhere. We have all figured out that the party is over....all of us that is, except developers in Mission Valley. There is an enormous glut of housing on the market, so much that the Federal Government had to come in and purchase foreclosed properties to keep the market from totally tanking and YET Mission Valley is experiencing a BOOM! You would think it was 2003 all over again.

Civitas is one of the largest developments in San Diego. Its a 230-acre mixed-use project being built in San Diego's old quarry. How can San Diego be in the middle of the largest housing bust in history and simultaneously be experiencing this boom? Why would a developer build a project of this magnitude in this market?

http://www.reuters.com/article/2011/05/31/idUS209361+31-May-2011+BW20110531

Maybe it helps to understand who this developer is. He is Stephen Haase: President of Sudberry Properties. He previously worked as assistant director and acting director of the City of San Diego Development Services Department.

“Mr. Stephen M. Haase provides entitlement support for the company's retail and mixed-use projects, including the recently approved 230-acre Civita mixed-use development in San Diego, CA. He is actively involved in project design and community outreach to achieve the company's goal of delivering the highest quality development.”

“He joined the company in 2006 after 16 years in the public sector where he managed large, complex organizations responsible for all aspects of land use, planning and building safety.”

http://www.sudprop.com/about/profiles/shaase.html

So essentially Stephen went from running Development Services to a job in the private sector for a for-profit development company and received the largest development deal in Mission Valley to develop 230 acres in mixed use. The project was approved by City Council in 2008 and broke ground in December of 2010.

Coincidentally, the project was approved at the same time Haase was serving as a primary member on the Mayor's Technical Advisory Board a board which had expanded its role in a very questionable and perhaps illegal way...

"To proactively advise the Mayor and the Land Use and Housing Committee on improvements to the regulatory process through the review of policies and regulations that impact development."

The meeting minutes of this board show they discuss everything from building codes, height limitations, streamlining their permit process, how they should take advantage of their relationship with politicians, their own fees and my favorite quote "if the public benefits they should pay". One particular note from Haase in the minutes was his recommendations with regards to green building code requirements: "Stephen Haase stated should not need third party certification, should be local discussion."

Is this another case of the Mayor throwing his weight around to get his friend this project? (see the Kessler lawsuit) http://www.sandiegoreader.com/weblogs...

No matter how you spin it something isn't adding up here. This project begs alot of questions.

How is this project being financed?

Why is this project being financed?

How much did the developer pay for the land?

Who is paying for all the infrastructure?

Did the Mayor help Haase get this project approved?

Is this a Delaware LLc hiding the names of individual investors?

Is this project being subsidized by the City of San Diego?

And perhaps most importantly how did Haase get away with serving on the Mayor's Technical Advisory Board WHILE this project was being approved by the City? and thus...Why isn't the FBI looking into this?

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Comments
5

always enjoy reading what you have to report ...seems like somethings always "going on" in our real estate game.

Aug. 14, 2011

Good job, HM!

BTW, "Mission Valley" is not a "valley," it is a river bottom. If San Vicente Dam every breaks loose, it will be one helluva tsunami in reverse. In an earthquake, the soft alluvium will rise up and smite a goodly percentage of the hapless helpless occupying what should be a river, gently braiding its way to the sea, full of steelhead and other once-numerous native fish . . .

Aug. 14, 2011

Thanks Richzombie, I really appreciate that you read my blog. I like to know that there are other people that are awake to this unconscionable and most likely illegal behavior by our politicians and private developers. I am astounded they are STILL getting away with it. There is more than enough to convict the mayor of this city. Hopefully we can all raise awareness and take our city back.

Aug. 14, 2011

@twister, love your comment!! yes I have to confess I have a secret fantasy that mission Valley will be swept away in a Tsunami. Of course in my fantasy no one is hurt and everyone gets out safe but Ikea, CostCo, Mission valley Shopping Center, and the 1000s and 1000s of hideous unsustainale Archstone Condos will be taken out to see far far away where they will biodegrade back into the earth. I know, the materials are likely not going to biodegrade but I would love for Mission Valley to return to an ecosystem.

That river bottom as you call it is absolutely gorgeous and it is criminal that it was stolen from the people.You look at other cities like portland or even reno and you see how they designed their cities to embrace and celebrate the river and we built lackluster monstrosities that hide and block this river from the citizens.

Aug. 14, 2011

In regards to this project there are alot of alarm bells. 1st of all NO bank would finance a project of this magnitude in this market and no developer would have the cash to finance the project himself. we are talking 230 acres and has to be a cost of at least a million dollars an acre so you are looking at 100s of millions of dollars that are available to this developer. Where is that money coming from?

Just the land costs alone should have wiped this developer out. What did he pay for this quarry land?

Haase left the City of SD as Development services Director in 2006. Was he courted by Sudberry properties and told "if you join us and help us get this project through the city we will make you CEO"? It must have been a bit of work to get the zoning on all this land changed. Was Haase instrumental in that?

This is just bizarre to see foreclosures everywhere and to see this massive new development going ahead full force. For 1 thing the federal govt is subsidizing the principal on peoples mortgages since so many people are underwater (which I dont agree w/ at all), but the reason prices are tanking is simple economics...too much supply, not enough demand. thats why no bank would finance this. adding to the glut only further depresses surrounding property values and increases the amount taxpayers are going to pay to subsidize the principal.

There is something very wrong with this picture and I guess what I am getting at is that the only way it makes any sense at all is if they found a way w/ all their smoke and mirrors to get the public to pay for it. Thats why I really want to know how all that grading is being paid for (grading is extremely expensive), and how are all those roads being paid for and all the water and sewer lines?

Aug. 14, 2011

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