All across America, designated Opportunity Zones (OZs) have become a critical tool in the future development and revitalization of cities. These zones give both individuals and corporations the chance to re-invest existing capital gains into Qualified Opportunity Zone Funds in order to receive tax breaks for helping fund investment in impoverished areas. According to the The Rockefeller Foundation, OZs “have the potential to become the largest community development program in our nation’s history.”
One of Southern California’s Opportunity Zones is located within Downtown Vista - home to a vibrant and diverse community of people and businesses. Downtown, which the City has been revitalizing, includes a rich arts history and has been transformed into a walkable community filled with retail, restaurants, breweries, and businesses, including a creative co-working space. Vista is one of about 30 designated OZs in San Diego County and 8,700 across the US. California has the most designated OZs with 879.
Since 2010, the City of Vista has grown by 8% - a rate higher than the San Diego region as a whole - and has earned a spot as the 7th fastest growing city in the region. Since OZs were introduced in 2017, Vista leaders have been working with local business owners, developers, and investors on a number of projects to further enhance the Downtown area, as well as fuel positive growth in the community.
“One of our jobs as civic leaders is to promote and foster the quality of life in the community,” said Vista Mayor Judy Ritter. “We view the Opportunity Zone in Downtown Vista as another tool to do just that. We are excited about the current and future projects within the zone, which will not only help make Downtown Vista a destination, but will also create jobs for our residents and help spur other needed economic development in the region.”
Vista’s OZ is in sync with the City of Vista’s Downtown Specific Plan, which includes:
- Supporting economic development through a coordinated effort between the public and private sectors.
- Establishing a formal Arts Culture District to encourage and promote the arts as a key element of Downtown Vista's economy and identity.
- Creating a lively mixed-use environment that provides a variety of housing, retail, and recreational opportunities and choices.
- Acknowledging the unique history and community identity of Vista.
- Enhancing public gathering spaces with social and recreational amenities.
- Fostering stronger connections between adjacent neighborhoods and commercial centers downtown through enhanced pedestrian and bicycle networks, improved transit access, and efficient parking.
- Enhancing Buena Vista Creek as a pedestrian and recreational resource by providing pedestrian and bicycle trail opportunities along the creek.
- Incorporating the principles of health and sustainability.
Downtown Vista’s revival also includes enhancements to Vista Village, which is connected to historic downtown Vista via the redeveloped Paseo Santa Fe. The center includes multi-modal transportation connections and has attracted new shops and restaurants over the last few years that are, in turn, attracting locals and visitors from around North County.
“By leveraging the diversity of commercial, residential, restaurants, and retail establishments in Downtown Vista, coupled with the projects within the OZ, we can further activate the street fronts and activate Vista’s urban landscape, transforming downtown into a vibrant center,” said Kevin Ham, Vista’s Economic Development Director. “The goal is to enhance everyday life, vitality, safety, and improve mobility throughout Downtown. We want to turn Downtown Vista into a place that leaves a lasting impression.”
Let’s take a look at a couple of different development projects within Vista’s Opportunity Zone and what they mean to the growing Downtown area, residents, visitors and the community at large.
100 Main - Mixed use development (currently under construction)
The Site Development Plan is for a five-story mixed use development consisting of two levels of underground parking and 126 units of market rate residential units, including a mix of studio, one bedroom, and two bedroom apartments. There will also be approximately 14,000 square feet of ground floor commercial space.
Expected Completion Date: July 2020
Developer: JCG Development in collaboration with Grasshopper Development and Street Lights Residential, all of whom specialize in urban and community redevelopment.
Jay Wentz, principal of JCG Development and Grasshopper Development, purchased the old King and Queen hair salon on Broadway some five years ago because he was attracted to historic Downtown Vista’s charm, character, and walkability. That began a series of acquisitions, business owner moves, and redevelopment of other property on South Santa Fe, all leading to a discussion with the City about the possible purchase of 100 Main Street and a possible site for future parking on Broadway in Vista’s growing Downtown.
“Not too many downtowns in San Diego have the feel that Vista’s downtown does,” Wentz said. “After speaking with a number of City officials some six years ago when the journey began, I concluded that there were changes occurring with public policy regarding the downtown and development activity bubbling beneath the surface that could help propel Vista’s Downtown into an entirely different and vibrante future. Walking the area and speaking with different business people and citizens only bolstered my sentiments.”
“We are in the process of retaining a commercial brokerage company at this time given while we are in the construction timeframe and are excited to see what commercial uses we are ultimately able to attract,” he added. “There has already been significant interest from prospective commercial users.”
Wentz said the apartments will be highly amenitized for its future residents and the finished exterior design attributes will feed off the historic nature of Downtown. “It will be a welcoming presence to all citizens of Vista.”
Wentz is no stranger to revitalization and urban redevelopment. Through JCG and Grasshopper Development, he led the redevelopment and revival of the iconic Lafayette Hotel, Swim Club & Bungalows in North Park.
Wentz said he and his partners actually started considering Downtown Vista before the Federal Opportunity Zone rules were in effect - largely in part due to the City’s proactive approach to help redevelop and enhance Downtown Vista.
“In my career as both an affordable housing developer and as a market rate developer and having worked in many states around the country over the last 25 years, I can speak for myself and my partners when I say that the Vista City Council members, the City Manager, and the City Staff have been some of the most welcoming and encouraging people we have ever met with and done business with,” he said. “It’s one thing to have a great vision as the City mapped out years ago for its downtown area. It is an entirely different matter to be able to execute on it and achieve it. The City of Vista is a shining example of how to get great things done. We are looking forward to a long-term relationship in Vista.”
Wentz added that he is excited to work with the City to help move Downtown Vista to the next level.
“We are also grateful to have met many of the business owners in the Downtown area who share our exuberance for the future and who have invested in and are working hard to help the greater good succeed. Like the revitalized Lafayette Hotel helped accomplish in North Park, and while we are but one of many projects in the Vista Downtown area, we hope that our project at 100 Main will be so successful that as the saying goes, ‘the tide will come in and all boats will rise.’”
Terrace Lofts - Five-story, 42-unit apartment project recently approved by the Vista Planning Commission
Developer: Tideline Partners
Expected Completion Date: The company plans to break ground in the first quarter 2020 and finish construction in the third quarter 2021.
This isn’t your usual apartment “complex.” Lev Gershan, Managing Partner of Tideline, explained further about this unique project.
Terrace Lofts is designed and curated for individuals, people who march to the beat of their own drum. It won't be for everybody. We will have a large mural facing into the downtown core. The primary goal of the project is to anchor the Downtown Vista Arts and Culture District. All units will have higher ceilings, lots of natural light and large outdoor terraces. Our average terrace size is 90 square feet - we are trying to create that indoor/outdoor living experience. We will have a rooftop deck with a fire pit and a living plant wall and a ‘Makers Garage’ outfitted with a workbench and tools for the tenants to use to wrench on bikes, assemble furniture, etc... We have 14,000 square feet of landscaping that we are positioning to be seen from the street to beautify the corridor.”
Terrace Lofts are a part of the rebirth of Paseo Santa Fe and historic Downtown Vista. While Gershan and his partners began investing in Downtown Vista before the OZ, he said the program definitely helped make Terrace Lofts a reality.
Here’s a little bit of history:
“I did not start doing business in Downtown Vista because of the OZ regulation,” Gershan said. “Working in Downtown Vista is a bit of a home coming for me personally. I was working here in the late nineties while putting myself through college at CSUSM. In 2014, we acquired 150 E. Broadway, a small two-story office building, and I moved our office from downtown La Jolla into this building in Downtown Vista. This was all well before the OZ regulation. When we were looking at buying the 150 building I came across the new Downtown Vista Community Plan and fell in love with the vision. The plan called for a walkable, vibrant cultural village center, with districts to represent the unique character of the different areas.”
In particular, Gershan was struck by the City’s S. Santa Fe Capital Improvement Project “CIP” Revitalization, which also envisioned an arts and cultural district Downtown.
“The CIP funding and work literally paved the wave for our OZ project, Terrace Lofts,” he said. “Without the City making these investments and having a vision there was no way we could make financial sense of Terrace Lofts.”
As for OZ, Gershan said the regulation pretty much saved Terrace Lofts. “We were not interested in a ‘build-and-sell’ project just to make money. Our development is impact focused. The thesis is to positively impact the community in which the project is delivered.”
He said the OZ regulation provided significant tax savings to the equity investor to stay with the project for 10 years.
“When you start looking at development through a 10-year lens versus a three-year lens you start making wiser long term investment decisions that better align with community values. You invest more in the quality of the project because you have to own it longer and with that you have to believe in improving the future of the neighborhood. Without OZ, we would not be able to build this type of project.”
Gershan said the City of Vista was also instrumental in facilitating Terrace Lofts’ success. “The City has given us direct access to top decision makers and worked collaboratively with us to get through the challenges. This is even more important than the OZ regulation itself because while there is a 10-year window for repayment of equity, there is a very tight window for decision making to deploy that equity. If you can't meet the deployment window requirements, there is no OZ deal. The City was a great partner in the process.”
Terrace Lofts is not the first project Gershan has been involved with in Downtown Vista. His company Tideline developed the corner of Broadway and Indiana and leased it to Dog Haus Biergarten, and redeveloped the two story office building at 150 E. Broadway.
He hopes the investments Tideline has made in Downtown Vista will encourage others to do the same. “We hope this investment will give others the courage and proof of concept to do the same. Vista is a unique place. It has a rich history influenced by makers and artists and strong sense of community and pride.”