March 30, 2005 - From the March, 2005 issue

San Diego Councilman Madaffer Is Using Redevelopment To Transform Blighted Neighborhoods

In the wake of a fiscal scandal, a mayoral election that gave no mandate to the winner, and a fundamental change in governance structure, some might be cool on San Diego's prospects for the next few years, but not District 7 Councilmember Jim Madaffer. He is staying focused on the positive as he goes about re-making San Diego's more distressed neighborhoods one at a time. TPR is pleased to present this interview with Councilman Madaffer, in which we talk about the tools of revitalization and political climate in San Diego.

San Diego has been the subject of harsh criticism regarding the management of its unfunded pension obligations. Could you update our readers on how the City is responding to its fiscal challenges?

We have considered two strategies for dealing with the unfunded pension liability. One strategy is for San Diego to declare Chapter 9 bankruptcy, which would take care of some problems almost in one fell swoop, akin to Orange County. We could also try to work out things through the meet and confer process, which is where we are right now. We have offered current employees wage freezes and pay cuts that would relieve about $600 million of the $1.3 billion unfunded pension liability. This puts the responsibility on the backs of current employees -- not the retirees.

Well, I think San Diego finds itself in the middle of a perfect storm -- perfect fiscal storm -- and it isn't going to be easy to get through some of these issues. I am hoping that by the middle of April our audits will be coming back from KPMG. We hired Lynn Turner, the former chief accountant of the Securities and Exchange Commission, to distill information from the city attorney's office and other sources into a clearer picture for KPMG. Once the audit is completed, we will have the 2004 audit completed shortly thereafter. That ought to begin to restore San Diego's credit rating in the bond market.

As I mentioned, the pension issue will be taken care of through labor and a plan that our Pension Reform Commission came up with. Converting from a council-manager to a strong-mayor government will certainly change the way San Diego is run and I would agree we'll need a good couple of years to work out the fine details, as well as to get past the pension and disclosure problems that have plagued the City for the last two years. As for what else is happening in San Diego, the city has a number of good things going right now. Our region recently passed TransNet, which is our half-cent sales tax measure, to address some of our congestion issues. We are also about to break ground on a new main library that is being funded completely with tax increment financing from our redevelopment area and a $20 million state grant that we received with the state library program. In addition, we have several new redevelopment areas that are being created, a new Padres ballpark downtown, and a number of neighborhood branch libraries under construction. There are a lot of good things going on in San Diego, despite some of the rhetoric, and I tend to focus on these good things.

You represent City Heights on the San Diego City Council. TPR has featured articles with William Jones and others, like Price Charities, who have been involved in the successful effort to transform City Heights through the strategic investment of housing, library, park, and school bond funds. Is there a central lesson from that effort?

The lesson is that we should do more of it, and that is exactly what I am doing. After being elected in 2000, I initiated a new redevelopment area called the Crossroads Redevelopment Area, which is adjacent to City Heights. Crossroads picks up right where we left off with City Heights and will help transform one of the forgotten parts of San Diego along University Ave and El Cajon Blvd. Right now, we have about 1000 new units of housing pending in a number of projects within Crossroads. One of the projects is an abandoned Albertson's shopping center. It will have close to 400 new, market-rate and affordable condominiums.

There are other projects in the redevelopment area that are similar to City Heights. I am interested in a K-mart site at the intersection of 54th and University. It is about thirty acres, and I plan to put out an RFP for the entire site. The store is operating right now, but there is the potential to turn it into an incredible oasis that would include residential, retail and commercial uses. We could do that and keep the K-mart going as well.

I have also created another redevelopment area for the Grantville community which will be the first redevelopment area in San Diego completely north of Interstate 8. Traditionally redevelopment projects have been south of Interstate 8, in the older parts of the city. Grantville will transform underutilized property along Interstate 8 and our new trolley line, as well as turn an old rock quarry into a high-tech biotech business park.

Central to many of the interviews that TPR has included about City Heights has been a discussion of holistic planning -- taking an integrated, place-based approach to the development of housing, transportation, parks and schools. How could public officials create better incentives for public agencies and other stakeholders to take such an approach?

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Clearly, that is the challenge. I think we start by using the tools of redevelopment, because that gives me, as a councilman, the ability to reinvest dollars back into an area. My district also contains the College Grove shopping center, which eight years ago had failed. We attracted in Sam's Club, Wal-Mart, and Target, all in the same center, and it is now one of San Diego's most successful shopping centers. One of the reasons I am interested in the K-mart site is that it is on a major transportation line and there are residential and industrial uses in the same area.

For me, redevelopment is about taking an area that has been ignored and neglected, that has not had sufficient public infrastructure development, and turning it into an asset for the community. For example, adjacent to the Crossroads area, I am building a new park, building and new affordable housing on what had been an abandoned vacant lot that had no other prospects. Using the tool of redevelopment we can show developers that there is potential in these sites. Using this approach, it has not been as difficult as I thought it might be to interest developers in building holistic projects that include transportation, jobs and housing.

We are doing this interview in Northern California at a conference about state and local fiscal reform. Much of the day has been spent reviewing failed attempts to reform how we tax and distribute revenues. What needs to be done?

Clearly, the biggest problem that we have in this state is that the fiscal system is broken. The state has proved that well. Proposition 1A is really just the first step in a multi-step process toward fiscal reform. I am here today because I am interested in hearing what others have to say as we look toward the next key issue, which is housing.

California is renowned for its housing crisis. I suspect that if we create incentives for housing we will see more housing built, as opposed to big-box retail and car lots. As we do this, we need to also have in mind the need to provide adequate infrastructure for these new projects.

In closing, I know that you are an active member of the League of Cities. What is your role with the League?

I am chairing the Housing Task Force of the League of Cities. The task force includes representatives from the building industry as well as League members. We are trying to address issues regarding the provision of housing, investment in infrastructure and related funding issues with regard to local communities.

Lastly, How difficult has it been to address these policy issues?

It is definitely a challenge for us. While I hope that the Legislature can solve these problems, they may ultimately find their way to the ballot box as initiatives again, just like Proposition 1A.

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