Building Industry Association
of San Diego

The San Diego City Council voted to approve funding to build an Indirect Potable Water Reuse(IPR) facility at the North City Water Reclamation plant.  The IPR facility would  convert wastewater into drinking water for the city’s 1.3 million residents. On a 6-2 vote with Councilmembers Sherri Lightner and Carl DeMaio dissenting, the council agreed to the demonstration project as a means to determine if recycled water should be a viable part of San Diego’s long-term water strategy.  Several councilmembers stressed that while they voted for the project, it should not be construed as a vote for IPR but rather support for a fact finding process.

The pilot facility will process approximately 1 million gallons of purified water a day .  No purified water will be sent to San Vincente Reservoir during the demonstration phase. Ultimately the purified water will be mixed into the city’s existing water supply.

The BIA joined a broad coalition of business and environmental groups to support the project that is expected to be completed in early 2013.

From Tuesday’s Union Tribune…

By Jennifer Davies, Union Tribune Staff Writer

The number of housing permits in San Diego County last month rose to their highest level in two years.
There were 558 residential permits issued in June, a jump of almost 63 percent from the previous year when 343 permits were pulled. It’s also a 27 percent increase from May, which had 440 housing permits. For the first six months of the year, the total number of residential building permits was 2148, a 28 percent increase from the first half of 2009.
While the increase is heartening, the numbers are far off their peak, said Alan Gin, an economist at University of San Diego.
“This will probably be the second worst year for building permits in San Diego County — second only to last year,” he said.
He estimated that some 4,000 building permits will be issued in the county by the end of the year. In 2009, just 2,990 permits were issued. By way of comparison, around 7,445 residential permits were issued in 2007.
On a statewide level, 4,238 housing permits were pulled, a 19 percent increase from June 2009 and up 34 percent from May. For the first half of the year, 21,149 permits were pulled, a 17 percent increase compared to the first six months of 2009 when 18,083 permits were issued.
Liz Snow, chief executive officer of the California Building Industry Association, said she continues to worry about the sluggish pace of the recovery.
“The fact remains that we’re still hovering around the record-low production levels of the past two years, and the industry is still facing an uphill battle,” she said.
For nonresidential activity, the numbers were especially bleak, Gin said. The valuations in June for nonresidential buildings in San Diego County was $46.4 million, an almost 16 percent drop from the $55.1 million valuations in June 2009.
“We are way off in the commercial area,” Gin said.

The San Diego City Council voted against placing a 1/2 cent sales tax increase measure on the November ballot.  Six votes were needed to get it on the November ballot but -  in a surprise move – Councilmember Donna Frye opted out which left the measure one vote short of approval.  Frye said she wanted to see additional budget reforms in place before supporting a tax increase.

While the Mayor put the kibosh on a tax increase plan two weeks ago, the issue was resurrected by Council President Ben Hueso at the behest of organized labor.  Hueso now says the plan is ‘dead’ but with two weeks left before the deadline for placing items on the November ballot anything is possible.

The San Diego City Council will consider a union backed ordinance that will subject hotel developments to additional regulatory and economic review.  The hotel union, ‘Unite Here,’ wants all major hotel projects to be appealable to the San Diego City Council where they believe they have a better chance at Project Labor Agreements and a union only hiring requirement because a majority of the council were backed by unions in their elections.

The regulation would apply to hotels built in the redevelopment area  managed by the city’s Center City Development Corporation.  CCDC is one of the most successful redevelopment operation in the state that generates millions of dollars annually in property and sales tax that the city uses for infrastructure, parks and a host of city services.

An independent analysis done by ‘The London Group’ reveals that the city could lose up to $207 million in Transient Occupancy Tax revenue over ten years and lose over 10,000 construction jobs if the council adopts the pro-union ordinance.

The requirement would essentially negate the benefits that come from CCDC by eliminating the regulatory certainty that has led to downtown San Diego’s impressive transformation over the last 35 years. It will also stymie future hotel plans costing the city millions in lost economic activity and jobs.

The BIA has joined with the business community in strongly opposing the union move and have urged council members to reject the ordinance.

The hearing is scheduled for Tuesday, July 27th at San Diego City Hall.

Bill Horn

The San Diego County Board of Supervisors voted 4 – 1 today to place an initiative on the November ballot that would prohibit mandatory Project Labor Agreements on county projects.

Introduced by Supervisor Bill Horn, the ‘Ensuring Fair and Open Competition in County Contracting’ initiative mirrors  an existing county ordinance, but the current ordinance can be changed by a simple board action.  If the initiative is approved by the voters, it would take another public vote to change it.

Supervisors’ Horn, Roberts, Jacob and Slater voted in favor of the initiative. The lone dissenting vote was Supervisor Greg Cox who said the current ordinance was adequate. Ironically, Cox’s wife is the Mayor of Chula Vista where a similar anti-PLA ballot measure won in a landslide in the June Primary election.

Along with Chula Vista, voters in Oceanside overwhelmingly approved a city charter that includes a prohibition on mandatory PLAs. Opponents to PLAs argue that such agreements, sought by unions, increase costs up to 30% and limits competition from non-union companies.

The initiative heads to a second reading on August 4th and then on to the November ballot.

County Supervisor Bill Horn will ask his colleagues on the Board of Supervisors to place an initiative on the November ballot that would prohibit mandatory Project Labor Agreements for county construction projects.

The move comes on the heels of a successful ballot measure in Chula Vista and the Oceanside City Charter that also prohibits PLAs.  Both were were overwhelming approved by voters in June.  A similar measure in the city of San Diego failed to get the necessary signatures to qualify for the November election.

In a board letter that will be considered on Tuesday, July 13th, the  North County supervisor states that PLAs result in ‘artificial increases in project costs’ [that] ‘reduce the value of taxpayer dollars by limiting the number of public works projects that can be performed.’

If approved by the full board on the 13th, the measure would go to a second reading in early August and then placed on the November ballot.

The San Diego County Planning Commission gave the green light to an equity mechanism program intended to compensate landowners who will be severely downzoned as a result of the General Plan Update.  The ‘Transfer of Development Rights’ program will allow property owners to sell the units they would otherwise lose under the new general plan to home builders  seeking to increase densities in designated ‘receiving sites’  in the county. The county will develop a process for property owners to use in order to determine the number of actual units that could have been built on their property.  Typically, the number of available units is less than the land designation after multiple environmental constraints are considered.

While identifying areas where units will be taken from – the trick will be to identify areas where the units can actually be placed.  County staff will focus their attention on Campo and Borrego as ‘receiving sites’ but only after the General Plan Update is adopted by the Board of Supervisors.

Project applicants seeking to increase densities would have to go through a General Plan Amendment process and purchase the additional units through the TDR program.

The TDR program and General Plan Update now moves to the Board of Supervisors for consideration.  A late November or early December hearing is anticipated.