On November 15, 2022, the City of San Diego (City) executed a 25-year ground lease and related maintenance agreement with DCP Park Services, an affiliate of Stockdale Capital Partners (Stockdale), for the City-owned property known as the Horton Plaza Urban Park (Park). This public park plaza, envisioned to become a civic treasure, adjoins the “Campus at Horton”, a burgeoning mixed-use creative hub rising from an extensive renovation of the iconic Horton Plaza Regional Mall in Downtown San Diego.

KMA prepared an independent evaluation of the proposed business terms contained in the lease and related legal agreements between the City and Developer. Specifically, KMA evaluated the reasonableness of the Developer’s financial projections for the Park related to anticipated capital investment, operating income and expenditures, and potential lease payments to the City.

As background, Stockdale purchased the 10-acre Horton Plaza mall in 2018. The following year, the City approved their ambitious adaptive reuse project, which included conversion of mall space into creative office space along with significant upgrades to remaining retail, entertainment, and food and beverage uses. The former Nordstrom department building serves as the 10-story flagship of the development including an added five (5) additional floors of space designed for life science tenants. Upon completion, the renovated campus is projected to have 683,000 SF of office/life science space and 264,000 SF of retail space.

A provision for enhanced security to the Horton Plaza Urban Park was part of the community benefits package negotiated in 2019, with an option to later execute a ground lease for the public plaza. Read more detail about KMA’s involvement in structuring the 2019 transaction. (link to older KMA write up) The ground lease allows the Developer to manage the Park and program activities with the goal of integrating its historic charm into the project while also creating a community gathering space in the heart of Downtown. Stockdale will rehabilitate and maintain the space, making a required amount of capital improvements including restaurants with outdoor seating, a dining deck to service the Bradley Building and its food hall, public access space, artwork, outdoor shaded seating, and other permanent and temporary improvements, while simultaneously controlling loitering and vandalism. The Park is expected to open in 2023.