Land Use Modification in an Urban Setting

Conflicting land uses are an integral aspect of planning and development in an urban environment. This paper examines the methodology used in evaluating the economic impact associated with changing the zoning designation of land from industrial to commercial use. The case study is a 20-acre parcel within the City of San Diego, California. Originally zoned as industrial property, at the time of the study, the site housed a small warehouse operation that employed some six to eight employees with an annual payroll of $280,000. Some political and community activists were hoping for the development of the parcel into a manufacturing operation with a large number of high wage jobs. The non-profit Jacobs Foundation bought the site with the intention of developing the property into commercial and office space. One of the conditions imposed by the City of San Diego in considering the request for rezoning the space was a comprehensive economic impact analysis. This paper identifies the methodology employed in the impact analysis and provides some of the highlights of the study. There were several reasons to conclude that the development of the site into an industrial development with a large number of jobs was unlikely. The property is located near a flood zone and within a residential neighborhood with limited transportation avenues. Furthermore, the site is only 20 acres, and isolated from other manufacturing hubs. Finally, the overall number of jobs is trending downward for both the United States as a whole as well as in San Diego. In evaluating the benefits from the rezoning, the author estimates that in addition to the infusion of jobs and expenditures resulting from the construction aspect of the project (360 jobs and $50 million), the development of the site as commercial/office space will eventually support an estimated 1790 jobs with an annual payroll of almost $50 million. Sales revenue in the proposed development is forecast to exceed $25 million annually. In both the construction and operation of Market Creek Plaza, the Jacobs Foundation worked to assure local access to jobs and training opportunities. These benefits are more difficult to quantify, but are probably of even greater importance to the community. In addition, the study demonstrates that the study area was under-served in terms of food stores and other retail shops. It is estimated that at least $60 million of spending on retail sales by study area residents was occurring outside of the study area. A significant portion of this spending, and the subsequent tax dollars, were benefiting municipalities other than the City of San Diego. The proposed development will serve to fill this void. The City of San Diego accepted the economic impact analysis along with other detailed analyses, and approved the change in zoning. The development is complete and has been cited throughout the United States for it success.