During the past six months, the city's Real Estate Assets Department has seen its director resign and its acting director retire. Now it's bracing for more big changes as the mayor outlines his plans for an overhaul.
Mayor Jerry Sanders has put a freeze on leases on city land while he hires new leadership and private consultants to recommend how to update the city's leasing policies and its antiquated system for managing a multibillion-dollar collection of property.
“We're leaving probably millions of dollars on the table right now,” he said. “This is about putting in a new policy and making sure the Real Estate Assets Department understands it and knows it and follows it.”
Sanders, who became the city's top executive at the beginning of the year under the new strong-mayor form of government, said he would consider outsourcing city property management if the department continued to underperform. Before this could happen, voters would have to approve an initiative that allowed outsourcing of jobs.
In January, Sanders appointed Jim Waring to oversee Land Use and Economic Development, including the Real Estate Assets Department. Waring, a property attorney, said his goal is to create a city real estate department that is as aggressive as a private firm. Sanders plans to name a new director of real estate assets this month to replace Jack Farris, the acting director who recently retired.
“We have to get somebody that we trust who knows the field,” he said, adding that the department's two most recent leaders weren't experts in property or leasing.
“We're looking for somebody who understands what the industry standards are so we can incorporate that into what we're doing as a city.”
Once new leadership is in place, the department will hire outside experts to audit and catalog the leases and other land deals.
The audit is expected to be complete by the end of the year. The city is operating with a leasing policy that hasn't been updated in two decades. More than 150 of the city's land deals are expired but the tenants generally have been allowed to continue operating under old terms.
One of the expired leases is with American Golf Corp., which runs three golf courses on public land. Its lease to operate golf carts and a pro shop at the Balboa Park Golf Course expired in 2000.
While the mayor puts plans into place, more leases will expire. Nearly 80 are set to run out this year.
They involve nearly 1,000 acres of land and 64,300 square feet of interior space, from offices downtown to a snack shop at the Mission Bay Golf Course. Seven of the agreements date to at least the 1980s.
One, for example, is with San Diego Gas & Electric for a transmission line that the city signed in 1956. Another is with Clear Channel Outdoor for a billboard on University Avenue and will expire in September. It pays the city about $615 a month.
