Little Italy is one of San Diego's most popular neighborhoods today. In some ways a high-priced residential district with an Italian theme, Little Italy also provides an example of what a city can do to restore a down-on-its heels area.     

Twelve years ago, few had heard of this area north of downtown San Diego. But since the late 1990s, the area has grown and prospered.

The Little Italy neighborhood dates back to the 1920s, when the area near the San Diego harbor became home to Italian immigrants who worked for the tuna industry. For years, it was common to see fishermen in the neighborhood spreading out their nets to repair them. Our Lady of the Rosary Church remained a center of community life for Italian Americans, even as later generations moved away.

But the fishing industry died during the 1970s, and the area became best known for its many parking lots within walking distance of government buildings in downtown San Diego. One-third of the community was demolished in 1972, when Interstate 5 was built through the area.

Thirty-six years later, Little Italy has rebounded, thanks to a real estate boom, creation of a business improvement district and the neighborhood's central location near a trolley line and the downtown railroad station. The numerous parking lots have been converted into housing. More than 1,200 new condos have been built in the neighborhood, and 3,000 new residents have moved in.

San Diegans agree that formation of a Business Improvement District (BID) during the 1990s, and run by the private, non-profit Little Italy Association, was a key factor in the area's rebound. The association also runs a Community Benefit District (CBD). The Business Improvement District is funded through business tax licenses in the area and generates $90,000 a year. The Community Benefit District generates $750,000 a year through property assessments. The money from the BID and the CBD are used for maintenance and neighborhood security.

The association and its executive director, San Diego native Marco Li Mandri, are the driving force behind new public spaces, landscaping and benches that now make up the streetscape, especially along India Street, the core of Little Italy. An arched entrance sign over India Street was installed in 2000 to mark the neighborhood's renaissance.

Little Italy map
From eleven Italian-related businesses in the mid-1990s, Little Italy has grown to become home to 19 Italian restaurants, 22 home furnishing stores and 11 art galleries. There's a farmer's market and art walks. In short, Little Italy is a yuppie dream – and it is one without chain stores.  

"We convinced the community to keep out corporate owners," said Li Mandri. "What people want when they come to a neighborhood business district is that it's not like a thousand other business districts throughout the country."

The City of San Diego, which has focused on massive downtown redevelopment during recent years, also played a part in Little Italy's rebirth through its Centre City Development Corporation. The CCDC provided more than $4 million for many of the capital improvements to the streetscape, Li Mandri said.

"We get capital improvement money from the redevelopment agency," he said, but the Little Italy Association provides maintenance funding for trees, trashcans, landscaping and new sidewalks.

City policy changes have helped create piazzas, which Li Mandri described as wider sidewalks filled with tables, chairs, umbrellas and enhanced landscaping. "They have done no eminent domain in Little Italy," he said. "The market has driven a lot of redevelopment."

The CCDC has also subsidized construction of 16 row houses, 12 affordable rental lofts and 37 low- and moderate-income apartments on a block of land the CCDC purchased. Overall, however, the CCDC owns little land in Little Italy.

Li Mandri said the area grew during the real estate boom between 2001 and 2006. While the city's real estate market has declined recently, the neighborhood still is considered the most desirable neighborhood in downtown San Diego, he said.    

Despite the ongoing gentrification, Little Italy still contains a variety of commercial and office buildings, including auto repair shops and a Mexican consulate, according to Michael Stepner, an architect and former city planner.   

Li Mandri's company, New City America, has taken its lessons from Little Italy to a number of other California cities and worked to spruce up business districts with community benefit districts in San Francisco, Oakland, Los Angeles and San Jose.

Not everyone is enamored with Little Italy, although the most common complaint is that an area once covered with parking lots is now one of the most difficult places to park in all of San Diego.
"Outside of six or seven Italian restaurants, it's hard to see the relationship to what Little Italy once was, a working class fishing neighborhood" said University of California, San Diego political science professor Steve Erie.  "It's another yuppie neighborhood."

Stepner predicts that the future focus in the neighborhood will be on the waterfront, which lies a few blocks west from inland India Street. Plans for the waterfront, known as the North Embarcadero area, call for developing parks with direct links to Little Italy.  

Marco Li Mandri, New City America, (619) 233-5009.
Steve Erie, University of California, San Diego, (858) 534-3083.
Michael Stepner, Stepner Design Group, (619) 234-2112.
Derek Danziger, Centre City Development Corporation, (619) 533-7103.
Little Italty Association:



SD Redevelopment Leaders Resign Amid Scandals

Redevelopment in San Diego suffered a black eye this summer when top officials of two of the city's major redevelopment entities left their jobs under a cloud of controversy.  The departure of the officials raised questions about whether the city's program needs an overhaul.
San Diego is an anomaly in California redevelopment. Redevelopment in downtown and the adjacent southeastern area are run by non-profit corporations that do not have the same level of public oversight as redevelopment agencies in other California cities. San Diego's redevelopment organizations are based on a model used successfully in such East Coast cities as Baltimore, whose Inner Harbor is considered a national model of  redevelopment. 

The main downtown redevelopment agency in San Diego is called the Centre City Development Corporation (CCDC), while nearby, in a predominantly minority neighborhood, redevelopment is run by the Southeastern Economic Development Corporation (SEDC). The city also has its own redevelopment agency, which focuses on redevelopment projects elsewhere within the city.

The structure of the two development corporations is now undergoing review by the City Council after presidents of both resigned. SEDC President Carolyn Y. Smith was forced to leave her job in July because of a scandal involving employee bonuses. The website first revealed the bonus payments. The city then commissioned an outside audit which reported that Smith had approved $872,000 in extra pay for herself and the SEDC staff from 2003 to 2008, including $89,000 for Smith alone during the 2006-07 fiscal year. The audit said the bonus program amounted to fraud. After Smith's departure, the City Council replaced the SEDC board.

Centre City president Nancy Graham left her job in July, too, after she faced questions about conflicts of interest she had in negotiating with developer The Related Cos. Although she has denied any wrong-doing, Graham was charged in September with three misdemeanors by the San Diego city attorney's office.

Under Graham's guidance, the CCDC in 2007 chose The Related Cos. from a field of seven bidders for a $400 million condominium and hotel project in the East Village. However, Graham did not reveal until April of this year that she and her former husband once formed a partnership with Related to develop a condominium project in Florida. According to the city attorney's office, Graham received nearly $3 million in income from the Florida development in 2006 and 2007. However, she never reported the income in conflict-of-interest statements. In September, the CCDC board canceled its negotiating agreement with Related.

San Diego's downtown redevelopment has led to a boom in the area, with numerous office towers, hotels and restaurants opening in recent years, along with Petco Park baseball stadium and downtown shopping. But critics have contended that not enough emphasis has been placed on the city's public spaces and buildings, including replacement of an outdated downtown library. SEDC focused on building more shopping, housing and adding jobs in its region.

Michael Stepner, a downtown planning consultant, said some of the recent personnel problems were related to the individuals, and not the set up of the two corporations.  "The need for people doing the right thing doesn't change," he said.

University of California, San Diego professor Steve Erie calls the two corporations "a wonderful thing for developers," because there is less public oversight.

But Derek Danziger, a spokesman for CCDC, said downtown redevelopment has been a success, with the area generating millions of dollars for the city, Danziger said a primary focus during recent years has been on public infrastructure. Redevelopment money has been set aside for a new library, for example, but private fundraising efforts need to be successful before the library project moves further, he said.

Stepner said redevelopment in San Diego may change over the next six months, as the city government begins debating the future of the two corporations. The City Council is considering whether the two corporations should be merged back into the city's redevelopment agency, and whether the redevelopment agency should run more like agencies in San Francisco and Los Angeles. Another options being considered is for the City Council to directly hire and fire the president of the development corporations, Danziger said.