UC regents approve budget, scope and financing of UCSD’s Theatre District Living and Learning Neighborhood
By Elisabeth Frausto, November 19, 2020

University of California regents voted Nov. 18 to approve the budget, scope and external financing of UC San Diego’s planned Theatre District Living and Learning Neighborhood as the La Jolla Shores Association and Blackhorse Farms homeowners association look to the next steps in their joint lawsuit challenging the project.

The project, planned for La Jolla Village Drive at North Torrey Pines Road, calls for five buildings ranging from nine to 21 stories tall with housing for 2,000 students, along with a conference center, hotel rooms, classrooms, retail and a 1,200-space parking garage underneath.

The lawsuit was filed last month in San Diego County Superior Court by Escondido firm DeLano and DeLano on behalf of LJSA and the HOA of Blackhorse Farms, a gated residential community on the western edge of UCSD near the proposed site of TDLLN. The action is the latest step in the organizations’ fight against the development.

The plaintiffs contend the project violates the California Environmental Quality Act, citing potential impacts on traffic, animal species, pollution and wastewater, and have voiced concerns about the project’s scope and perceived lack of community input.

During a closed session Nov. 18, the Board of Regents’ Finance and Capital Strategies Committee discussed the lawsuit but took no action, according to the regents’ secretary and chief of staff, Anne Shaw.

In its open session immediately following, the committee took up the TDLLN “budget, scope and external financing pursuant to the California Environmental Quality Act.”

Before the discussion, committee Chairman Hadi Makarechian addressed actions taken at the regents’ meeting in September, when the committee delayed approval of TDLLN’s budget pending financial clarifications and an action that was recorded — approval of the project’s design — did not match what was said during the meeting.

“I would like to clarify for everyone, at the September meeting … the regents had questions regarding the project’s financial feasibility as well as project costs,” Makarechian said. “Due to these questions, the regents amended the action to 1) authorize an additional $5 million to fund partial project work and 2) approve the project design and 3) adopt findings for the project having considered the addendum No. 5 to the 2018 [Long Range Development Plan environmental impact report] pursuant to CEQA.”

Makarechian said “the action was amended, was approved and the regents requested the campus to revisit and reduce the project budget before returning to a future regents meeting to request full budget and financing approval.”

The updated information that UCSD presented to the regents reflected a reduction in the overall budget to $565 million from $645 million, with Chancellor Pradeep Khosla saying the university “took the feedback from the regents very seriously.”

UCSD was able to reduce the project’s budget by more than 12 percent by cutting “construction costs, financing costs and making additional adjustments to reflect post-pandemic reality,” Khosla said. He indicated that a larger classroom originally included in the plans has been replaced by “smaller classrooms,” with fewer students projected on campus for classes.

Student demand for housing, however, continues to be “very high and very significant,” Khosla said, adding that the “2018 campus strategy [is] to house 65 percent of our students in below-market-rate units.”

UCSD’s goal, Khosla said, is to offer a four-year housing guarantee at 20 percent below market rate. He said UCSD “was the first campus to come up with this notion of 20 percent below market. If you look at our housing right now, it’s more like 31 percent below market,” which he said is “the lowest by far” of all UC campuses.

“We have a very strong commitment to reducing the housing costs and keeping them low,” Khosla said.

“Our pre-COVID shortage of 10,000 beds has been compounded now with a permanent loss of 2,000 more beds because we got rid of all triple[-occupancy rooms],” leading to the university’s inability “to offer even a two-year housing guarantee,” Khosla said.

“I think [that] is terrible for an institution of our size and caliber,” he said.

TDLLN, then, is “critical for us to have these beds ready by 2023,” he said. “This would add 2,000 beds, barely compensating for the 2,000 beds we lost.”

Khosla also mentioned that TDLLN’s “great design” recently received an award for urban design from the San Diego chapter of the American Institute of Architects.

“I’m hoping that we can get this approved and be on our way to construct great housing, great living conditions and a great educational experience for our undergrads,” he said.

Makarechian congratulated Khosla on bringing the cost down by $80 million. “That’s a substantial savings,” Makarechian said.

Regent Richard Leib said “I think this is a great project” and commended Makarechian for “doing a lot of work with the university in scaling down and to really test a lot of the financial questions.”

Leib also commended UCSD and Khosla “for listening to those responses and really coming up with a fantastic project. I’m very excited about it.”

The committee voted unanimously to approve the budget, scope and external financing without further discussion. Nearly all the cost will be covered through the external (debt) financing, with $1 million coming from housing auxiliary reserves.

Earlier, in public comments during the regents meeting, which was held online and livestreamed, the board heard from two UCSD community members, both of whom spoke in support of TDLLN.

Chris Nielsen, a local resident and member of the UCSD Chancellor’s Community Advisory Board, urged the regents to support TDLLN, saying “the single largest impact by students at UC San Diego on the local community is housing. The addition of 2,000 beds by the [TDLLN] project will make a measurable difference.”

UCSD student Abby Reuter said “a college degree is incredibly important for success in the world today, and with the increasing cost of education, public schools like the UCs are more important than ever. Stable housing is a critical factor in student success and well-being while pursuing that degree. On-campus housing will also allow more students to be part of the on-campus community and to experience independence and excitement of the college experience. [TDLLN] addresses both of these issues, and I urge the Finance and Capital Strategies Committee to support this project.”

After watching the meeting, La Jolla Shores Association President Janie Emerson told the La Jolla Light that “the vote was pretty much a foregone conclusion.”

“My concern is all the money that the University of California handles and the way they make decisions. At no point did they fully vet this project, and they are the committee that is supposed to get down and dirty,” she said.

Emerson said she feels the regents aren’t doing enough to be “creative with what you have in front of you,” such as repurposing empty buildings instead of moving forward with new construction.

“The regents … are just plowing ahead on the path that they have already set out,” she said, “which to me is fiscally irresponsible. In this age, they need to be more creative about solving the housing issue. Their responsibility is to keep the university solvent.”

Emerson said a settlement discussion involving all parties in the lawsuit is scheduled for Wednesday, Nov. 25. It is a mandated step per CEQA regulations.

“A settlement discussion in CEQA is simply the parties involved with their attorneys to discuss if there’s any way they can resolve the differences” she said. “It’s much more informal than in regular litigation.”

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