Centre City Development Corporation, the City’s downtown redevelopment organization, has been correctly accused of many things. Arrogance. Bullying. Conflicts of interest. Excessive pay and perks for employees. Loose contract policies. Being in the pocket of the real estate development industry. Now there is another: “It seems like [Centre City] once again wants to destroy African-American heritage in San Diego,” says Karen Huff-Willis, head of the Black Historical Society of San Diego.
She is referring to Centre City’s push for a major project, called “Seventh and Market.” It is planned to be a mixed-use, 41-story building with a 224-room hotel, 364 residential units (mostly rental, some condo), 19,000 square feet of retail space, and a public parking garage in the area bounded by Market Street and Seventh, Eighth, and Island avenues. The project has been given a number of extensions. Centre City hopes to have it in front of its board by late April or, more realistically, late May. The city council, ultimate boss of Centre City, has it tentatively penciled in for consideration in late May. That would happen only if the project gets the board’s nod late this month.
The City owns most of the property, but not one very important building: the Clermont Hotel at Island and Seventh avenues. This three-story structure, built in 1887, is an important part of San Diego’s African-American history. According to the Journal of San Diego History, the building was denied historical status by the City’s Historical Resources Board several times until Huff-Willis dug into its history. Among many things, jazz greats Charlie Parker and Jelly Roll Morton played and stayed there. It was the first hotel in the county to be recognized as segregated, or “colored only.” In 2001, the Clermont finally was officially cited as a city historical landmark. In 2005, the building got an official plaque recognizing the hotel’s unique role in San Diego’s African-American history. But the development team selected by Centre City refuses to include it in the Seventh and Market redevelopment project.
Huff-Willis has seen African-American heritage trampled before. The famed black-only Douglas Hotel at 206 Market Street, which had a restaurant, card room, barbershop, and billiard rooms, was razed in 1985. Demolished with it was the adjoining Creole Palace nightclub, which once had been alive with jazz, blues, boogie-woogie, Charleston music, and lots of wild dancing. Centre City declared the Douglas blighted and arranged to have it replaced with a four-story apartment structure.
Then, during the redevelopment push of recent years, Centre City took aim at a half-block on J Street that had once been the state’s largest contiguous landholding owned by African Americans. The buildings had belonged to Lillian and Ocie Grant. She was a madam of note. An irate Huff-Willis sued Centre City. “The suit got thrown out on a technicality. We were time-barred,” says Huff-Willis. “They tore the buildings down. It was horrible.”
Now she fears greed will triumph again under Centre City’s direction. In early 2004, the Clermont Hotel was purchased for $2.2 million by Larry Sidiropoulos, his law partner Anthony Laureti, and another lawyer, Ashley Abano. They brought in a developer, the Robert Green Company of Encinitas, to compete in Centre City’s plan to develop the City’s property. They wanted the project to include restoration of the hotel.
Centre City brought in William Jones, a former councilmember and deputy mayor, and currently president and chief executive of CityLink Investment Corporation, a small developer. A large New York developer, the Related Companies, was later recruited to do the heavy lifting. Jones is an African American. “William Jones is not qualified to be developer with respect to this project, certainly a high-rise, and Related has not done any projects in downtown San Diego,” says Huff-Willis. “[Centre City] was playing the race card. It thought if it brought an African American, a black face, into the project, it could get away with its shenanigans.” Jones did not return calls for comment.
Related and CityLink won the bidding last year, refusing to include the hotel but promising to honor African-American culture within the project. “[Centre City] said it would not work with the Black Historical Society. ‘You are the organization that gave us too much trouble,’ ” says Huff-Willis, whose organization now has a black history museum on Market Street, across the street from the proposed project.
“We have every intention of taking legal action if it goes forward,” she promises. “The very idea of developing a project next to an historic African-American site and not even including that hotel is…astonishing. Gall.”
“We could remodel the hotel, bring it back to its original condition, but we can’t do it without [financial] help,” says Sidiropoulos. In 2004, before Related was in the picture, Jones made an offer to the hotel owners, inviting them to come aboard in the bidding. But the two sides could not come to terms. Because of the frailty of the downtown real estate market, the lack of financing, and a delay in hiring a general contractor, “This is a big smokescreen,” says Sidiropoulos. “They will stall it out for two or three years [until] the market comes back. I just want to know the process was fair.”
Civic activist Ian Trowbridge agrees with Huff-Willis: In recruiting Jones, Centre City “was playing the race card,” he says. Moreover, “The Green proposal is better than the one they are about to accept. It gives the City more money up front.” The Related/Jones plans have been scaled down to resemble the more modest Green proposal. Trowbridge says the project was rigged from the outset.
After I made inquiries of Centre City about the deal, the developers came to Sidiropoulos and wanted to discuss buying density rights. (Because the project is large, the developers need more land to justify the size. Sidiropoulos and partners could sell them rights to expand.) “If we get [adequate] money from them, we could improve the building,” Sidiropoulos says. “But they have no plans to embody the hotel in their plan.”
Late last year, the City came to the Clermont owners and demanded changes in windows, electrical wiring, and the fire escape. As a result, only a handful of people are now living there, and the owners are not getting much income as they sink up to $300,000 into the upgrades. Huff-Willis thinks Centre City was behind the orders. “It’s a heckuva coincidence,” says Sidiropoulos.
As a developer, Jones has critics. Councilmember Donna Frye remembers when Jones and his lawyer came to her office during the Murphy administration. They wanted to build a mixed-use project in Linda Vista. “He [Jones] came in and said, ‘This is how much’ he needed for his project. He was furious that I would not agree to giving him $10 million. I was shocked. It was one of the most amazing meetings I’ve ever had. He got his [$10 million subsidy] from council over my strong protests. He didn’t do any traffic improvements, and after the project was built we had serious traffic issues.”
Both Huff-Willis and Trowbridge are suspicious of the long relationship between Related and Nancy Graham, president of Centre City. She was mayor, later head of downtown development, and then a private developer in West Palm Beach, Florida. As revealed in a Reader column of November 23, 2005, before she even came to San Diego, a successor mayor criticized Graham for her cozy relationship with Related. While she was mayor, her signature redevelopment project was done by Related’s big New York wing. When she went out on her own, she did business on a big project with Related’s Florida operation.
Graham says she disclosed this to the Centre City board. “I did not negotiate this [Seventh and Market deal],” she claims. “I was in a few meetings where we were not able to reach agreement.” It was the board that rejected Huff-Willis, she says. “The Black Historical Society wanted whoever was selected to give them space. It went before our board, and it chose not to do this.”
As to Related and Graham, “There was no relationship that presents us with a conflict,” says John Collum, Centre City’s senior project manager on Seventh and Market.
One big question is financing. Who would provide it in this downtown market? “The condo market is a little sad,” says Frank Alessi, Centre City’s chief financial officer. A little sad? “Hotel financing is not the best in the world, but it is better than condo.” Financing for rentals is better, he says. The board will approve the deal before the developers have to line up financing. “At day’s end, it should be doable.”
But not without a fight.