Downtown's 'Financier of Last Resort'
Kim John Kilkenny took over as CCDC board chairman at the beginning of the year
by Liam Dillon
Voice of San Diego.org
Redevelopment, particularly in downtown San Diego, is under siege.
The governor tried to kill it. The legislature cut its funding. The City Council is forcing the downtown redevelopment agency, the Centre City Development Corp., to pick up more of its day-to-day bills. Big building dreamers continue to eye the agency's coffers to help expand the Convention Center and finance a new Chargers stadium. And CCDC still hasn't fully bounced back from its former president's conflict of interest scandal three years ago.
Enter Kim John Kilkenny, who took over as CCDC board chairman at the beginning of the year.
Like his predecessor, Black Mountain Ranch developer Fred Maas, Kilkenny made his name as a developer of San Diego's fringes. He spent nearly two decades as a key figure in the massive Otay Ranch project in southern San Diego County. Otay Ranch took almost 10 years to break ground, and now stands as a 23,000-acre planned community. Kilkenny retired last year and lives in Carlsbad.
We spoke with Kilkenny about the challenges CCDC faces and why it still always seems to find money to do things.
How does what you learned at Otay Ranch translate to how you view your role here?
Otay Ranch is a remarkably dense development for a suburban environment. We never got pushback on density because the whole of the plan was well conceived and the quality of the design was better than most.
One of the things that I'm a true believer in is what is most important in an urban environment is quality design and the quality of public spaces.
How so? Can you give me concrete examples?
Streets, sidewalks, parks. The relatively mundane stuff of urban planning. That's where it happens.
At the end of the day that's why we plan. So that people meet, greet, work and play together well in an environment that enhances their quality of life.
Is that the focus of the kinds of projects you'd like to see go forward here?
When we are wearing our design and review hat, that is my focus: the public realm. The portions of the building that people can feel and touch and see. I don't really care that strongly what happens above three stories. It's not that it's unimportant, but what is most important is what's happening at the ground level and how people react to it.
The recent state legislation allows cities to buy back into redevelopment if they pay a lot of their property tax dollars to schools and other local governments this year as well as a smaller on-going bill to those other governments. Assuming the city follows the mayor's recommendation and takes the state's deal, how does the legislation affect downtown?
Our ability to do redevelopment over the next several years is going to be extremely curtailed.
A lot of people don't understand the way our budgets work. Twenty percent of our tax increment goes to affordable housing. Thirty-one percent will, starting next year, go to the city and the county and other school entities. That's 50 percent that's diverted immediately. If you take another 10 percent, (the on-going payment to other governments through the state legislation), that leaves us 40 percent to do capital projects.
With the current debt we have ... we're going to be left on a go forward basis on the order of magnitude of $5 million, $6 million, $7 million, in single digit millions in order to do streets, curbs, streetlights, parks, land acquisition.
One of the biggest frustrations I've had in terms of watching this organization since I've been here is idea that a lot of times CCDC will cry poor when there's stuff that they don't want to pay for. But when there's stuff that people want them to pay for all of a sudden money appears. Out of nowhere in the winter, for instance, CCDC decided to fund the $3 million Convention Center expansion design plans. How do you respond to that?
In terms of crying poor, our budget is a public document and if you want to go through it line by line, I'd be happy to.
We do question when money is diverted for other purposes. Now, on the Convention Center design, it was a public policy decision by the agency that that is a good investment. You understand the arguments. I don't think anyone can doubt that the Convention Center has been a tremendous economic engine for all of San Diego.
Sure. But it almost seems like CCDC is always the money of last resort. We're looking around trying to find money and then the answer is we'll just tap CCDC.
The CCDC board has made that point in a critical way repeatedly. We call ourselves the financier of last resort. In terms of protecting our fiduciary responsibility, I find that to be unattractive.
But you did it for the Convention Center.
Yes.
So if the central library fundraising falls short, is there any more money for the library?
I'll give you the same answer. I'll be happy to go through the budget with you. If you divert parks, if you divert, which we already have, improving C Street, if you divert land acquisition, then money's freed up. It's always a question of priorities.
Is there any money available for the Convention Center expansion?
In my opinion, it would be exceedingly difficult to identify any significant funds for the phase III Convention Center.
How about $3 million a year starting in 2025?
I think it would be very, very challenging, especially in light of the state actions.
How are they going to build the thing then?
Don't know.
What's the status of Chargers stadium discussions?
From my perspective and this organization, negligible. We aren't involved. There's not an application, there's not a proposal. We aren't involved in any review publicly and privately.
Presumably what you said about the Convention Center expansion would apply to the downtown stadium as well, correct? In terms of being able to contribute.
The numbers that have been kicked around in the newspapers suggesting very big numbers, in the hundreds of millions. Hundreds of millions of dollars in public contribution that has been suggested, I don't know how redevelopment pays for that.
Is CCDC ever going to have a permanent president?
I certainly hope so. I am hopeful that when the dust settles from the state budget, the mayor and council will see the wisdom in hiring a permanent president.
What else do you want me to know or what do you want to emphasize?
The public policy problems facing this region and the state right now happen to be, inadequate tax revenues. We need to grow tax revenues. We need to grow jobs. We need improve our land patterns and we need to improve our environment. Redevelopment does all those things.
From a land use perspective, over the last decade a third of the homes in the city of San Diego have been built in downtown San Diego. That is a revolution. The practice in San Diego from World War II on has been to expand on the suburbs, over and over again, commonly referred to as urban sprawl. I was in the business of building on the suburbs. I understand how that's done.
Development in downtown San Diego consumes 15 percent less water, 50 percent less energy, has 60 percent fewer miles travelled, 60 percent less air pollution, 60 percent less greenhouse gases and we're providing an urban environment that serves as a resource for the rest of the region. That is a huge, important public policy victory that people haven't paid attention to.
The numbers that have been kicked around in the newspapers suggesting very big numbers, in the hundreds of millions. Hundreds of millions of dollars in public contribution that has been suggested, I don't know how redevelopment pays for that.
Is CCDC ever going to have a permanent president?
I certainly hope so. I am hopeful that when the dust settles from the state budget, the mayor and council will see the wisdom in hiring a permanent president.
What else do you want me to know or what do you want to emphasize?
The public policy problems facing this region and the state right now happen to be, inadequate tax revenues. We need to grow tax revenues. We need to grow jobs. We need improve our land patterns and we need to improve our environment. Redevelopment does all those things.
From a land use perspective, over the last decade a third of the homes in the city of San Diego have been built in downtown San Diego. That is a revolution. The practice in San Diego from World War II on has been to expand on the suburbs, over and over again, commonly referred to as urban sprawl. I was in the business of building on the suburbs. I understand how that's done.
Development in downtown San Diego consumes 15 percent less water, 50 percent less energy, has 60 percent fewer miles travelled, 60 percent less air pollution, 60 percent less greenhouse gases and we're providing an urban environment that serves as a resource for the rest of the region. That is a huge, important public policy victory that people haven't paid attention to.
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