The San Diego City Council sat down Monday afternoon to consider leasing an empty warehouse in the Middletown neighborhood so it could be transformed into one of the nation’s largest homeless shelters.
When they wrapped up close to midnight, it wasn’t clear what the final lease might say, when it could be ready or whether the 1,000-bed project would end up holding 1,000 people.
Negotiators are now scrambling to salvage the deal as San Diego braces for the loss of hundreds of other shelter beds in the coming months. Yet a number of decision-makers appear unconvinced that a big one-stop shop, christened “Hope @ Vine,” is the best response to a crisis that has grown every month for more than two years.
“My administration is happy to continue refining the current proposal, but Councilmembers must provide specific negotiating points, which I am immediately requesting,” Mayor Todd Gloria said in a statement Tuesday. “San Diegans expect bold action on homelessness, which is what Hope @ Vine represents, and we must continue to address this crisis with the urgency and compassion that it demands.”
The property’s owner, San Diego businessman Douglas Hamm, had already made some concessions over the weekend and agreed to more Monday following reports from the city attorney and Independent Budget Analyst that questioned whether the deal introduced too many legal and financial risks.
After listening to hours of often hostile testimony, Hamm and a small group of supporters left the council chambers, huddled in the lobby and began speaking quietly. A recent version of the lease would have lasted 30 years and paid above-market rates. Spokesperson Ken Moore later said it was too early to know what additional changes, if any, Hamm might be willing to make.
Furthermore, Christina Bibler, director of the city’s Economic Development Department, told the council that the terms were probably the best available.
At least two people on the nine-member council appear opposed no matter what happens in the coming days.
Kent Lee and Vivian Moreno both voted against continuing discussions after publicly criticizing the deal. “The real estate transaction that is at hand is not one that truly does protect the taxpayers,” Lee said Monday, while Moreno, during a previous hearing about San Diego’s budget deficit, added that it would be “irresponsible” to sign a lease worth hundreds of millions of dollars.
Several colleagues suggested they could get to “yes” — if the agreement was substantially revised.
Marni von Wilpert noted that repairs to the decades-old structure, including new electrical infrastructure and plumbing, would fall to the city. “I do not believe that we should be using taxpayer money to fix Mr. Hamm’s roof,” she said.
Renovations are estimated to cost at least $18 million. If more money is one day needed, Stephen Cushman, the city’s lead negotiator, reiterated that the owner had already pledged $5 million toward the project. Any additional funds could be raised through philanthropy, he added.
Councilmember Raul Campillo highlighted the lease’s annual 3.5 percent rent increase that would eventually push the monthly bill past $320,500. “We’re getting treated like the owner, but paying rent like a tenant,” he said. “This is money flowing to the landlord that’s not serving people.”
Council President Sean Elo-Rivera was frustrated that negotiators had ruled out using eminent domain, which can force the sale of a property, on the grounds that it might take too long. The current process had already lasted months and the shelter, if adopted, wouldn’t be ready for another year-and-a-half, he said. “It feels that we’re relying more on hope than on reality-based assessments.”
Elo-Rivera also wanted the project to use workers through San Diego’s project labor agreement.
The only council member to offer an extended defense of the shelter proposal was Stephen Whitburn.
Some similar properties might be cheaper, he acknowledged. But choosing a spot for vulnerable people was deceptively hard. You couldn’t be in the middle of a neighborhood, yet public transit had to be nearby. Owners must be open to extensive renovations.
When you factored in money saved from having a range of services in one place and reducing sidewalk encampments, Whitburn argued that the agreement was a good deal.
It’s difficult to calculate the exact value a big shelter might bring, partially because it’s recently become less clear how many people would actually sleep inside.
Proponents have often said more than 1,000 beds could fit. But Lisa Jones, head of the San Diego Housing Commission, told the council Monday that 1,000 people in a nearly 65,000-square-foot building “wouldn’t necessarily be the best configuration.” Her assessment echoed that of Tamera Kohler, CEO of the Regional Task Force on Homelessness.
One official remarked that capacity decisions wouldn’t be made until after the site started offering services. “It very well may not ever see 1,000 people,” said Sarah Jarman, director of the city’s homelessness strategies and solutions department.
A revised lease is scheduled to be considered July 30, although that deadline could easily be pushed back. Representatives from the City Attorney’s Office said they’d need more time to review the changing proposal and multiple council members were uncomfortable making a decision without that legal advice.
Lawmakers take a break in August, meaning the issue might not be resolved until summer’s end.
Monday’s vote further told staffers to present on Sept. 9 a short-term plan to quickly replace 732 beds the city will soon lose.
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