San Diego Leaders Urge Macy’s CEO to Drop Efforts Against Creative Office Project

Article by: Costar | Lou Hirsh | October 16, 2019

Photo Provided by CoStar: "A lawsuit recently filed by Macy's could halt plans for The Campus at Horton, a mixed-use creative office complex in downtown San Diego (Stockdale Capital Partners)"

San Diego’s mayor and local business leaders have sent letters to Macy’s Chief Executive Jeffrey Gennette, urging the department store giant to drop efforts to block a developer’s planned conversion of a faded retail mall into a mixed-use creative office campus deemed crucial to bringing major technology and other tenants to the downtown area.

Stockdale Capital Partners’ $275 million project, known as The Campus at Horton, could be halted unless the developer and Macy’s can work out differences ahead of a June court date for a lawsuit recently filed by the retailer.


Macy’s West Stores Inc., the western division of the Cincinnati-based retailer, filed suit Oct. 7 in San Diego Superior Court, seeking to halt Los Angeles-based Stockdale’s plans to convert the former Westfield Horton Plaza mall into a mixed-use campus with 770,000 square feet of creative office space and 300,000 square feet of retail.


Macy’s, one of three remaining retail tenants in the mall, contends the conversion approved earlier this year by the city is in violation of its lease agreement going back to the mall’s 1985 opening, requiring any owner of the mall to maintain the property as a "first-class shopping center" and giving Macy’s approval rights over mall improvement plans.


The retailer earlier this year complained to the city and developer that it has been kept out of the loop on planning for the new project.


On Oct. 15, San Diego Mayor Kevin Faulconer wrote to the Macy’s CEO, saying it appears the legal action has the potential to put the Campus at Horton project in jeopardy, calling the situation "both unfortunate and discouraging, given the recent excitement related to this project finally moving forward."


"For more than a decade, I have worked closely with the owners of Horton Plaza to develop solutions designed to redevelop this civic treasure that initiated the Gaslamp Quarter renaissance more than 30 years ago," Faulconer said in one of two letters released to local media. "Many of us involved believe the Stockdale project will do the same."


"I am reaching out to urge your cooperation in finding a timely resolution and would be pleased to meet with you to discuss this further," Faulconer told Gennette.


Another letter to Gennette was sent the same day by eight local business and government leaders, who said they were disappointed to learn in media reports about Macy’s legal actions. That letter urged the retailer "to work swiftly" with Stockdale to resolve concerns and provide a resolution allowing the mall redevelopment to proceed without delay.


"Our community has long sought a plan that will overhaul the existing Horton Plaza and Horton Plaza Park into a thriving mixed-use community asset, which is exactly what the proposed redevelopment will provide," the letter said, with its authors adding they are "concerned your company’s legal action will significantly and unnecessarily slow or even stop this transformative project."


The letter’s signers included California Assemblyman Todd Gloria, San Diego County Supervisor Nathan Fletcher, City Councilman Chris Ward, and leaders of San Diego County Building & Construction Trades Council, San Diego Regional Economic Development Corp., San Diego Regional Chamber of Commerce, Downtown San Diego Partnership and the Sycuan Band of the Kumeyaay Nation. The Native American tribal band owns local commercial properties including the historic U.S. Grant Hotel, located across the street from Horton Plaza.


Stockdale and Macy’s officials did not immediately respond to requests for comment on the letters, but Macy’s representatives previously told CoStar News the retailer is willing to continue discussions with the developer. Macy’s said it also wants retail elements to get higher priority in future planning for The Campus at Horton.


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