Little Italy laundry threatened with eminent domain: San Diego (CA) Union-Tribune, 7/19/05

By Martin Stolz

San Diego redevelopment officials are using the threat of taking private property to compel a laundry business in Little Italy to negotiate selling its land to make way for a condominium and retail project.

The board of the Centre City Development Corp., the city's downtown redevelopment agency, voted unanimously last week to give the owners of Alsco, a linen and uniform laundry with 150 employees, a month to reply to the demand.

The beneficiary of the action would be CLB Partners, a Solana Beach development company with options to buy three parcels surrounding the laundry. Alsco owns three-quarters of the block, bordered by Grape, India and Fir streets and Kettner Boulevard.

CLB Partners has sought, without success, to buy the Alsco land since 2000, developer Patrick Rhamey said. He described his company's communication with Alsco staff as courteous, but indecisive and frustrating.

"Prior to this, there has been no movement," he told redevelopment officials last week. "CCDC's involvement can really help us."

"The stick, the fire to create a sense of urgency for Alsco to take action is the threat of eminent domain," Rhamey said.

CLB Partners, which told the board it would need the entire block, has proposed building 224 condominiums, including 22 affordable housing units it promised to sell at a loss for about $200,000 each. At street level, the complex – a series of buildings ranging from three to 13 stories – would have shops and boutiques, in keeping with Little Italy's feel.

Alsco, a 116-year-old family-owned company based in Salt Lake City, opened its Little Italy shop sometime before 1960, said Steve Larson, a regional manager.

The company's San Diego operation serves more than 3,000 businesses, including restaurants, clubs and garages. Most of its customers are in or near downtown, Larson said.

Larson declined to comment on the board's action. The attorney representing Alsco could not be reached.

In a June 21 letter to the redevelopment agency, Larson said Alsco has hired a real estate broker and expects relocating the plant to take three to five years.

"Unfortunately," he wrote, "there are very few, if any, sites in the area" with adequate water rights to supply "Alsco's proposed use and also have the sewer capacity for our operations."

The redevelopment staff said the CLB Partners project would better suit Little Italy than a laundry, which does not conform to city codes, but is grandfathered at the location.

Little Italy has rapidly evolved in recent years from a working-class community with small manufacturing plants to a haven for boutiques, restaurants and housing.

But remnants of the neighborhood's industrial past survive, including Alsco, a thriving business in the heart of Little Italy near an Interstate 5 interchange.

Alsco gives its unionized workers in San Diego negotiated wages, health care, pensions, paid vacation, sick leave and holidays, Larson said.

Gary Smith, a downtown resident, told the redevelopment board that it was "taking away good-paying jobs and probably exporting them across the border."

"And I'm not sure that's a good call," Smith said.

While the board supported sending Alsco notice of its demands, several board members questioned the action.

Redevelopment staff sought to assuage board concerns about eminent domain, calling it instead a "negotiated sale."

"I don't understand that distinction," board member Harold "Gil" Johnson said.

Board member Jennifer LaSar said relocating Alsco, which would be required by redevelopment law under any agreement between the laundry and the city, could potentially involve substantial obligations and risks to taxpayers.

She also said she would be concerned about the precedent the action could set.

But redevelopment staff said Alsco wanted to negotiate the property sale under the redevelopment law to obtain as many benefits as possible, including relocation costs and money.

Staff members supported their position by describing Alice Larkin Steiner, who attended a meeting to discuss the redevelopment project in San Diego, as "highly sophisticated" and astute because she works as a planner in Salt Lake City.

Larson said Steiner is related by marriage to an Alsco employee, but does not work for or represent the company.

After receiving the Centre City Development Corp. letter, Alsco has 30 days to respond. Its options include agreeing to sell, proposing a partnership with CLB Partners or devising its own residential project. If Alsco proposes its own housing development, CLB Partners could lose its option to build on the site.

But if Alsco challenges the sale and relocation, the redevelopment board would have to decide whether to pursue eminent domain in court.

Union-Tribune: www.signonsandiego.com