Escondido City Council September 19 authorized entering into negotiations to sell the 1.03 acre parking lot that sits behind and serves restaurants such as Filippi’s Pizza Grotto, Swami’s Restaurant and a Delight of France and is across of Valley Parkway from the California Center for the Arts, Escondido. The buyer is Touchstone Properties, which approached the city with the offer.
The sale and the loss of parking for Grand Avenue businesses is opposed by the founder of Filippi’s, who said he might have to close if it goes forward—as well as by the Downtown Business Association.
The sale would only occur if Touchstone’s proposed project is approved. That approval process has not yet begun.
The property is known as Parking Lot #1. Transitioning it into a multi-story condo complex is part of the city’s vision for establishing downtown as a “dynamic, attractive, economically vital city center providing social, cultural, economic, and residential focus…” The project would bring more residential development into the historic downtown and therefore more customers, many of them pedestrians.
The vote was 3-1 in favor, with councilmember Olga Diaz voting no and John Masson abstaining because his civil engineering company, Masson & Associates, has done work with Touchstone as a consultant.
The city-owned land would be sold at the “fair market value,” estimated at $1.4 million. The sale is contingent upon the final approval of the Aspire project. “The Agreement requires that Touchstone provide and maintain seventy-six (76) parking spaces for the public and provide the City with any future revenue from the public parking area,” says the resolution.
Parking Lot #1 is one of seven city owned lots that have a total of 497 spaces. It has 118 spaces.
Over and over during the discussion it was emphasized that the sale is contingent upon the development being approved. Under the agreement Touchstone would pay $300,000 in three installments, with the remaining balance as a promissory note.
The buyer would have to maintain a minimum of 76 parking spaces in perpetuality.
Councilmember Diaz said the process of selling the property before the project was approved seems different from previous projects. “Is this normal? Because it doesn’t feel normal,” she said.
Mayor Sam Abed emphasized that sale is contingent on the development’s approval. If the council does not approve the project, the property would remain with the city. “I don’t want to sell the property if we don’t approve the project,” he said.
“Sounds like we are talking about selling something before anyone knows what the plans are for that space,” said Diaz. “Usually we get appraisals first before we agree to sell something.”
“If the price comes to $400,000 we don’t have to sell it at that price. This is just the part of the process. The buyer will have some assurance that the city is a willing seller,” insisted Abed.
The first speaker was Robert DePhilippis, owner of Filippi’s, of which Escondido’s was the first.
Noting that he started the business in 1972, he said, “I’m against this condo project because it will kill my business. We have a great business there.” He owns an office building next door. He lost a year’s lease because the prospective renter was afraid to commit to longer because of the uncertainty about parking.
“We’ve had a great business for forty-six years. Escondido has been very good to me.” He said he’d happily buy the parking lot for $400,000. “Without it I know my business will fail. This is my best restaurant. All the businesses on Grand Avenue will close without parking.”
He was followed by Jim Crowe, who said, “The history of this parking lot has been to support the downtown. All of them rely on our public parking.” Pointing out that city parking is paid for by taxes largely collected from businesses, he added, “This developer is being asked to provide 76 spaces, which is inadequate,” and said some parking was lost when Maple Square was built.
“I just built Starbucks on Felicita,” said Crowe. “Which has lots of parking. You can’t do this to downtown.” He owns two buildings on Grand. “We need downstream thinking. We don’t need to take parking away.” Aiming a barb at Touchstone, Crowe said, “The developer will make money and go to Newport Beach and have a good time with it. But business will crater.” Offering to partner with DePhilippis to save the parking lot, he concluded, “You are going to cause millions of dollars’ worth of damage .”
Speaker Maria Bowman supported the project. “I have been a supporter of this project. I think it’s going to be wonderful!”
Dan Forster, vice president of the Downtown Business Association emphasized, “While we wholly support smart growth and we appreciate that Touchstone would bring that to downtown, we do have concerns and our concern is parking.” Forster said the project shown to the association previously had mitigated parking loss. “I don’t see anything about that. Without that we can’t support it. It will hurt business. It will hurt our business. We hear this all the time, that there isn’t enough parking.”
Attorney Dave Ferguson, representing Touchstone, clarified that the purchase was contingent upon the project approval and said the appraisal would probably take 30 days. He estimated it would be $1.4 million.
Pointing out that if the council denies the project, the city will still keep the deposits, he said, “Parking is a valid concern. We have retained a parking expert to study the parking issue. That will guide us on this.”
Diaz said she preferred not to find a recommendation like this on the consent calendar, or for it to go straight to passage without review by the parking subcommittee. “Regardless of whether you think there is nothing happening here, there IS something happening here. I know of no plans to create a parking structure downtown. It is important to have a parking structure. We are creating distrust. If we don’t create a parking solution then we are creating more angst than is necessary.” She added, “If you are going to sell city owned property there is an expectation that the city will be informed.”
Many city employees use the lot, she said. She recalled that the last time it was proposed to sell Lot # 1it was connected to what was going to be the downtown hotel—which never happened.
Diaz said she believes John Masson, who abstained from any of the discussion, was still in a conflict of interest because of his involvement with the current project. “Engineers have their logos on every document that comes before staff. That doubles down on the conflict,” she said.
Councilmember Ed Gallo agreed that “We are not approving the project, we are approving the sale of the lot.” Saying he moved to Escondido in 1973, he said, “We have had a parking problem since 1940. We always have a parking problem.” He did an unofficial study of parking on Grand a year ago: “The average available parking on the street was about 105, not counting the lots. We have parking problem because you can’t park in front of the shop you want to shop at.” He added, “too many people park in front of their store and then wonder why they don’t have parking for customers. I get tired of talking about the parking thing.”
Council member Mike Morasco commented, “I don’t feel like this has been the opposite of transparent. I don’t feel it was discussed in backrooms or to slip one by the residents. I think these individuals have spent their time at meetings, making presentations, nothing secretive about it, nothing clandestine about it. When we try to present it as something opposite of that, I think it’s grandstanding.”
Morasco said he too was concerned about parking. “I think we rely on the downtown folks to give us input. We’re not talking about a project approval. This complies completely with the plan the citizens voted for in 2018. I believe what our staff has told us, and this is a sale agreement that has no other strings attached but.”
Mayor Sam Abed came riding to the rescue of the process and John Masson’s honor. “According to city attorney we have followed the law of conflict of interest. We have gone beyond the requirements. John’s not voting. You keep bringing up trust and secrecy. A closed session is totally correct to negotiate a sale of property. If we’re going to hear every single item that we already approved we will have ten hour meetings. The reason is not secrecy, it is the way the government works.”
He said it was wrong to imply that they would sell the property and worry about parking later. “We are protecting the city’s interest. I know there are issues with the parking. We’ll have to look into that.” He said he would insist on transitional parking. “You can’t shut down for a year.”
He defended public private partnerships “to create the environment to support business. Businesses need a more vibrant downtown. But it’s a work in progress.” He said they were looking for grants to help carry out the Grand Avenue vision. The process is transparent. The public will be involved, but you can’t get them involved on a closed session.”
Diaz insisted that despite protestations that Masson’s situation is not a conflict, that exactly that kind of situation was brought up in ethics training she attended. “When you have an elected official that stands to profit off the city’s sale of an asset, you are doubling down on a conflict of interest.” She added, “I’m not trying to accuse anyone of wrongdoing, but we can do better.”
City Attorney Michael McGuinness said that in his opinion Masson was following the law. “He has been maintaining a distance from this project,” he said.
Alex MacLachlan of the Downtown Business Association further explained the DBA’s position on this matter. He told The Times-Advocate, “The developer, Touchstone, and city officials have been engaged with the Downtown Business Association and its member businesses, since the Summer of 2017, gauging our support or resistance and trying to keep us informed of the several proposals coming in for downtown developments. The selling of this parking lot # 1 was always explained to us as having a sister project of a multi-story parking garage at Kalmia and Second avenue, to which we were given blueprints to this and all other proposals.”
According to MacLachlan, “The existence of these linked projects was very well received by the majority of business owners downtown, in that it replaced the lost parking spaces of Lot #1 and added new parking capacity overall, and added hundreds of new potential customers living, dining, shopping, and learning downtown. I still viewed this as incomplete, though, because having a former 100 west Grand block business, I knew how critical that parking lot #1 is to the success of those businesses west of Broadway on Grand avenue and side streets. So, in the context of all these new proposed projects, we set out to design a more comprehensive vision for downtown, and that’s what was proposed by the city to SANDAG for the $2.5 million grant, that was unfortunately turned down.”
Part of that vision was for Grand avenue to become two lanes, more walkable, and adding diagonal parking, which adds over 100 new parking spaces when the bus line is moved one block.
“In that design,” says MacLachlan, “we saved the medians, which the DBA just landscaped in partnership with the city and added more decorative lighting and sidewalk features. So, by the end of say a five year period, we’d have hundreds of new people living downtown at Aspire, the old Police station project, hundreds more at The Ivy, several hundred more at the Palomar Hospital site, a parking garage at Kalmia, across from the library and central to downtown, a beautified set of medians and sidewalks, a gateway sign over Grand avenue, and a traffic calmed Grand with more street parking in front of thriving businesses.”
MacLachlan concluded, “All of these ideas are well thought out and interrelated. You take away the net increase in parking or the beautification efforts, or the concern for parking for businesses west of Broadway and you’ll get a cascading effect of hassle and inconvenience for new customers who want to shop and dine in downtown Escondido businesses, but will probably go elsewhere. These projects are going to pay millions in fees for the opportunity to invest in Escondido, it is not unreasonable to expect that Impact Fees get spent where the most impact is felt during those two years of construction traffic and lack of parking. Downtown property and business owners were asked for our feedback and we’ve proposed mitigating solutions, we’ll see if there is the will to do it right or to do it piecemeal. We have a great opportunity to do right for the whole city, I hope that is the path that is taken.”