San Diego politicians and land-use officials have become polarized over an unusual controversy pitting one of the city's largest private employers against an apartment developer in the city's downtown area. At issue is whether the proposed Fat City development in the Little Italy neighborhood threatens the operations of nearby Solar Turbines. 

Solar is a unit of Caterpillar Corp. that employs 3,800 workers in a plant on the city's industrial waterfront, plus an additional plant in Kearny Mesa. The company has argued that the proposed Fat City apartment project, located 240 feet from the plant, could result in air-quality complaints from future residents, and threaten its operations. Solar appears especially anxious because it plans to install new spray booths and other equipment that could conceivably boost its emission levels. Any complaint, according to the company, could trigger a new air quality assessment of the plant, at a cost of $100,000.  A consultant to the developers, who asked not to be named, speculated that Solar had already spent as much or more on a "phalanx" of lawyers and lobbyists.

This is the latest in a series of instances around California in which an existing institution has expressed concern over its environmental impact on a new project, rather than vice-versa. Recent court cases, in Los Angeles and in Dana Point (see CP&DR Legal Digest Vol. 26, No. 22 Dec. 2011), have held that the California Environmental Quality Act does not require a developer of a new project to consider this role reversal. However, in San Diego, Solar is not threatening legal action; it is threatening simply to move away of its own accord – even at its own expense. 

Solar has taken an all-or-nothing position, rejecting several compromise measures, and even threatens to leave the city if the 242-unit project is approved. Public hearings in January featured a long line of Solar employees pleading with board members of the Centre City Development Corp., one of the city's former redevelopment agencies, to reject the project. 

Several local officials, including the San Diego County Board of Supervisors and even the county's Air Pollution Control District of San Diego County (APCD) are backing the manufacturer. APCD director Bob Kard told reporters in January that he had never experienced a situation with housing and industry side-by-side that did not generate complaints.   

The homebuilders, architect-developer Jonathan Segal and Garth Erdossy, and their lawyers claim that Solar has little or no reason to fear the new project. Although the plant currently operates within 400 feet of existing housing in Little Italy, where Segal and Garth have built several multifamily complexes in the past decade, no local resident has ever filed a complaint against Solar. Of the three types of air pollution regulated by APCD – smoke, dust and odor—none seems to apply the Solar plant. The plant site is entirely paved and dust-free, and the building, which has no smoke stacks, emits neither smoke or smell. 

"I've bicycled by there every day for 20 years, and I've never smelled anything," said Richard G. Opper, an environmental attorney representing the home builders. He added that Solar's emission levels have actually fallen 80 percent as compared to an initial air quality assessment conducted on the plant decades ago, due to the installation of improved air-scrubbing technology. 

The apartment developers argue that the city has no basis to deny the project, which conforms to existing zoning for residential use.  

"The reason they've (CCDC) been so successful in San Diego in the last 10 years is that the city has done such a great job of making the process transparent, predictable and consistent," said developer Garth Erdossy, president of GLJ Partners, who seeks to build the project in partnership with architect Jonathan Segal. "Investors have flocked to San Diego because of this."

Erdossy points out that a car painting shop, with both odor and noise, operates immediately next door the existing Waterfront Lofts in the same neighborhood, without eliciting complaints. 

The developer said he and Segal have offered several compromises to appease Solar, including requirements that renters sign waivers on air-quality issues, and offering to negotiate any complaints about the plant directly with Solar, rather than refer complaints to the APCD. The developer also offered a land-swap with the city, in which the developer would switch locations with a public parking structure planned about 1,000 feet from the Solar plant. The company reportedly rejected all the offers. 

On January 25, the board of the Centre City Development Corp. rejected the housing proposal by a 4-2 vote, with three abstentions. Board member Laurie Black resigned in protest, although she told the San Diego Union-Tribune that the demise of redevelopment was also a cause for leaving the board.

A final decision rests with interim Centre City president Kim John Kilkenny, although any decision he makes is likely to be appealed to the city's Planning Commission. 


Citing the project's inconsistency with the 2008 City of San Diego General Plan Economic Prosperity Element and the Centre City Community Plan, CCDC Chairman Kim John Kilkenny today denied the Coastal and Centre City Development permits for the proposed Fat City Lofts project. The entire decision, findings and analysis is now posted on under the News section. 

Kilkenny offered the following statement.

"After extensive evaluation, my decision is based on a few key factors. Neither the City of San Diego's General Plan nor the 1992 Centre City Community Plan establishes the proposed residential project as a land use that must be approved as a matter of right, but rather a use that may be approved depending on an evaluation of its conformance to General Plan and Community Plan policies. In my judgment, the proposed project is inconsistent with the General Plan's Economic Prosperity Element Policy and Centre City Community Plan, which recognizes that base sector industries should be protected and land use inconsistencies should be avoided. The construction of a residential project close to Solar Turbines would result in increased regulatory burdens which may jeopardize Solar Turbines' continued operations."

Kilkenny's decision is appealable to the San Diego Planning Commission, but not the San Diego City Council.