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State says Chula Vista must offer land set aside for universities to housing developers

Assembly member David Alvarez introduces bill to exempt city from requirement that it declare the property surplus

San Diego Union Tribune: Chula Vista wants to create a University and Innovation District near its Otay Ranch Town Center. A general concept is pictured.

Article Via: San Diego Union Tribune

Tammy Murga

February 23, 2023, 7:15pm PST

The state says the 300-plus acres Chula Vista has set aside for a university and innovation district is not exempt from the Surplus Land Act and it has ordered the South County city to begin the process of making the property available for sale or lease to affordable housing developers.

The determination by the Department of Housing and Community Development threatens the city’s decades-long dream of creating a vibrant educational hub.

Chula Vista has refused to initiate the process outlined by the state and instead has enlisted the help of Assembly member David Alvarez.

Alvarez, whose 80th District includes Chula Vista, last week introduced Assembly Bill 837 to protect the property.

There are some exceptions to the Surplus Land Act: parcels deemed unsuitable for housing because of factors such as size, lands that a local agency is exchanging for another property or those being transferred to another local, state or federal government.

AB 837 would add one more very specific exemption: land acquired by a local agency for the development of a university and innovation district.

Without the land, “you can’t build a campus,” said Alvarez. “This legislation would protect that land for the purposes of a university campus, educational facility.”

He added that he does not want “to run the same risk” San Diego faced over the redevelopment of its sports arena site when HCD determined in 2021 the city ran afoul of the Surplus Land Act because it failed to first offer the site to affordable housing builders.

Deputy City Manager Eric Crockett said having to declare the land as surplus “would undermine our ability to attract and develop a university.”

A college town in the making

Chula Vista, with nearly 300,000 residents, is home to Southwestern College, a community college. The city has lobbied to attract a four-year institution for nearly four decades.

Last year, the city announced it would house San Diego State University’s film, TV and new media production programs in a yet-to-be-built complex in Otay Ranch. That building will be located about 2 miles from the 383-acre University Innovation District, where the city envisions having a university, market-rate residential units and research and development companies.

About 30 years ago, Chula Vista took interest in the parcel but it was owned by several residential builders. The city entered into multiple land agreements with them and acquired the property in 2015, allowing developers to build homes in the surrounding area.

State says ‘not tenable’

The city reached out to the state asking for the property to be declared “exempt surplus land.”

Chula Vista told HCD that it was restricted under those agreements with developers. The land agreements detailed that Chula Vista would use the parcel for higher education purposes and not housing that could compete with developers unless it was university-related housing. Other allowable uses included public recreation, industrial and commercial.

The state agency rejected that claim.

Laura Nunn, an HCD senior manager, told the city in a November letter that its claim “is not tenable” because “the fact that university-related housing (student and/or faculty housing) is permitted on the Property demonstrates that housing development is feasibly on the Property.”

In a separate but related letter, she wrote “that the Property can be used for both university and housing purposes.”

The agency then instructed the city to follow the Surplus Land Act’s protocols, including declaring the land surplus and notifying developers of its availability.

Crockett said in an email that the city has resisted declaring it surplus because any developer “could make an offer to purchase the entire property and if we don’t agree, HCD can overturn our decision. So the process creates too much risk of the City losing its 30 year vision.”

Concerns over proposed bill

AB 837 is in its infancy stage, but there are some concerns about its potential effects.

Steve Russell, president and CEO of the San Diego Housing Federation, said it could set a dangerous precedent for exempting lands and facilitating pathways for projects that may not add value to a community.

Russell said that while the Federation recognizes the benefits of having a university in South County, such a development without an affordable housing component could hinder access to higher education for many students, especially those who are low income.

Chula Vista is building a lot of housing, including affordable units.

Through the first nine months of 2022, more than 8,500 units were built across San Diego County. Chula Vista contributed 11 percent of that total, building 916 units.

From 2013 to 2020, Chula Vista reported a total of 1,008 new affordable units, said Stacey Kurz, director of the city’s Dept. of Housing and Homeless Services.

Should the bill pass, the city would complete its negotiations with HomeFed Corporation to be its master developer in preparing the land for development, as well as have CBRE begin the solicitation of educational institutions and businesses, said Crockett.

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