FLOWER HILL PROMENANDE RENOVATION
QUESTIONS AND ANSWERS

ABOUT THE PROJECT:

What has changed in this plan from the original plans in 2005 and before?
These are the major changes not only from the 2005 plan but also since the start of the community outreach effort several years ago:

• Addition of a Whole Foods Market

• Elimination of the 56,000-square-foot office building atop the parking structure

• Elimination of underground parking and reduction of the elevation of the parking structure to below grade at the top of Flower Hill Drive

• Elimination of the movie theaters

• Introduction of boutique office space rather than a large office structure

• Realignment of east entrance to facilitate easier ingress and egress for Promenade members and Spindrift residents and through traffic residential access on San Andres, including a new left turn lane from Flower Hill Drive.

• Elimination of a boutique hotel at the top of Flower Hill Drive, based on input from residents of the Spindrift Community

• Elimination of residential rental units along Flower Hill Drive

Why have you made such significant changes?
Two factors drove our redesign. First, some community members and groups and government organizations had concerns about the bulk of the parking/office structure on the west end of the development. Second, the cost to build subterranean parking is very high. Instead, we were able to recast the design to include uses with less intensive parking requirements, less traffic generation and lower construction costs. The result is a win-win situation.

How much square footage are you adding? What will total square footage then be?
The original plan called for 246,000 square feet, adding 136,000 square feet of new construction. The revised plans include a net addition of approximately 61,000 square feet over the existing 112,116 square feet, for a total of 173,111 square feet. This is a reduction of approximately 73,000 square feet over the last plan.

Where are the office and parking structures going?
We believe the new parking structure is ideal for the western part of our site, right next to the freeway and tucked into the hillside. Recent discussion placed emphasis on downsizing this structure, which was incorporated into the plans.

The original structure was planned to have parking on the lower floors and office space on the top floors. Current plans no longer include office space atop that structure. New construction on the west side of the Promenade and where the Ultra-Star Cinemas currently resides will house boutique office and retail businesses.

Shouldn’t you be counting the new parking structure in your square footage totals?
Based on established commercial practice, parking garage totals are not generally added to square footage totals because they do not generate traffic. Square footage totals are used to determine how much parking is required for various retail uses and how much traffic will be generated by those uses.

Isn’t it true that you could turn around and build condominiums in a few years, even though you say now that you won’t?
We have no plans to develop residential housing for two very good reasons: first, the property is not zoned to do so and obtaining a change in zoning would be very difficult; second, we have built our entire plan on a solid balance that produces a viable project for our customers, tenants and ourselves and there is no need to build condominiums for us to be financially successful.

Are you willing to put a deed restriction on your property that would prevent you from building condos in the future?
Our lender will not allow us to deed restrict the property.

Why did you do a lot subdivision
The lot subdivision was done solely to make financing the project easier, since most of the construction is being done on the west-end parcel. We committed, however, to developing both parcels as a single plan, so there is no practical effect of the lot split on the project plan or construction.

ABOUT THE IMPACTS

What will the traffic impacts be?
A traffic study completed in March 2008 indicates that there are no significant impacts to key intersections nor to two out of three key roadway segments near the project. There is an impact on the roadway segment from San Andreas Drive to El Camino Real (West), which can be mitigated by roadway improvements for which Flower Hill will contribute a fair share as directed by the City of San Diego.

What are you going to do to minimize traffic impacts?
We will comply with all the traffic requirements asked of us by the city. Our new plan includes adding a westbound right turn lanes at our entrance and a redesign of the ingress/egress from San Andres to Flower Hill Drive. In addition, we are widening our mall entrance by two lanes to better facilitate the ingress and egress traffic and will also move the entrance on the east side of the mall to the north to make ingress and egress easier there.

Is it true that if Via de la Valle is not widened between San Andreas and El Camino Real, then your renovation will not be able to move forward?
That is not the case. Our renovation is not the cause of the widening of Via de la Valle, a fact made clear by a city official at an earlier public hearing, but it does impact that road segment and as a result, we will pay a fair share contribution toward the City’s 25 year old plan to widen the road.

You say that your project won’t result in any changes in LOS. But LOS F is as bad as it gets. Isn’t that a little dishonest of you to say that?
There are two important things to remember: first, the City will be making the decision on whether to improve traffic on that segment or leave it at the existing LOS F. We are not able to affect that grade regardless of any mitigation we might do. Second, we are willing to do our share when the time comes regardless of the fact that our impact is a small portion of the cumulative impact of all projects over the next few years. We have and will continue to make the facts available to the community.

Why do you have to have office access or any kind of access that will result in more traffic on Flower Hill Drive?
Because we own Flower Hill Drive, it is part of our plan to make use of it in our renovation. Several years ago, we met with Spindrift residents and asked them what kind of business they would prefer to see there. They disapproved the idea of a boutique hotel or a restaurant, because those uses would generate more traffic and crowding. They liked the idea of office space because it is a less intensive use with generally counter-cyclical traffic patterns.

Is the clinic at the top of the hill going to stay there? What do you intend to use that building for?
We will evaluate its highest and best use when the additions are complete. Among the choices, there is a plan to use that space for additional mall storage.

OTHER IMPACTS

Isn’t it true that Flower Hill Promenade’s sewage flows into Solana Beach and is exceeding its allowable amount annually?
The Flower Hill sewage flows to the Solana Beach treatment plant as the result of a long-time agreement between the cities of San Diego and Solana Beach. It is the sewage from the entire commercial area east of the I-5 freeway that exceeds the agreed upon limit, not Flower Hill specifically.

Part of the development will be to create and implement a sewage plan that addresses any potential problems. We will direct sewage based on what the City tells us to do. We have provided additional sewer studies to the City of Solana Beach which has approved the proposed level of flow from the proposed additional square footage.

Will any views be affected for surrounding homeowners?
There will be very little, if any, change in view for any residents primarily because the parking structure, the tallest part of the project, will be on the far west end of the property and built into the hillside. As an extra measure for those closest to the center, rooftop equipment will be screened from view by design in order to enhance the aesthetic appeal of the center from the top view. The main portion of the existing mall will remain at two stories. Furthermore, the parking lot was redesigned so that the highest point is several feet below Flower Hill Drive.

What will the light impacts be?
Light impacts will be minimal since the design of the center concentrates light within the center rather than up and back toward the residential areas.

What expected impacts are there for Spindrift, Las Brisas and Lomas Del Mar residents?
There will be minor impacts on these residents during construction for those who shop at Flower Hill and for those using Flower Hill Drive. When the center renovation is completed, impacts will be a moderate traffic increase into the center.

What kind of construction impacts do you foresee? What about noise, dust and access problems during construction?
We do not anticipate major disruption caused by construction. We are working with the city on a potential plan to limit truck traffic on surface streets. For office and retail construction, most activity will occur during daytime hours within the city’s noise guidelines, when many residents are at work and in order to limit impact on our tenants, customers and surrounding neighbors. No significant noise or dust problems are anticipated. We will have a construction management plan in place that minimizes disruption. We will also keep our neighbors informed about any significant construction events that might affect them.

ABOUT THE PROCESS

Where are you in the planning process?
We are close to completion of the review process of our design plans by the city. We have made a number of changes based on community input and other factors, and those are reflected in the design.

How long until construction starts?
Because we cannot tell how long the city will take for permitting and environmental review, we can’t pinpoint an exact construction start date. Experience indicates, however, that it takes between nine and 18 months to get all approvals. We hope to start construction early 2011.

How was community input gathered?
We have reached out to residents, businesses, staff of our neighboring cities, shoppers, and various other stakeholders for more than five years. We have presented to community groups more than a dozen times, and have also conducted multiple focus group meetings with local residents. These meetings were open to anyone who was interested to meet and provide feedback about our plans. In addition, we conducted intercept surveys and obtained feedback directly from shoppers. We continue to post and update information about the revitalization on our website at FlowerHill.com and we have and continue to encourage community feedback on our plans for Flower Hill.

Will you do an Environmental Impact Report?
Yes. We are in the process of completing an environmental impact report ias we were asked to do by the City of San Diego.

You have to admit that Robert Vicino has accurately portrayed what you are trying to do, don’t you?
Mr. Vicino has been very vocal, which is his right, but not particularly accurate. However, he is only one of many individuals and groups that have provided a wealth of comments that have led to our new plan. We will continue to welcome community input. Mr. Vicino’s website is both inaccurate and outdated and does not honestly.

TENANT QUESTIONS

What kind of additional retailers do you intend to bring in?
The milestone addition is that of a Whole Foods market, the kind of specialty store that was enthusiastically endorsed by many community members with whom we spoke. While retaining the charm of the stores we currently have, we will continue to focus on local, one-of-a-kind businesses that make Flower Hill Promenade unique. We will also look at some other retail uses that make sense in our community and round out our mix of tenants.

Why have you eliminated the movie theaters?

The most frequently heard concerns from the community during our research was the generation of more traffic. Close to that was concern about parking. Theaters generate significantly greater traffic and require more parking than many other retail uses. Those were the major considerations in making the decision not to renew the UltraStar lease. UltraStar, fortunately, has another theater complex just one exit up the road at Del Mar Highlands.

While earlier plans envisioned renovating the theater, there were critics that referred to the theaters as “attractive nuisance," that attracted noisy teens, late night traffic and car noise and other negative impacts.

What kind of new restaurants do you envision?
At this time, we don’t envision additional restaurants at the center and are happy to offer various dining options now at the Promenade. This change results in less traffic into the Promenade and a reduced need for additional parking.

Are the current tenants going to remain?
We believe and hope that most of our local tenants will remain with community support. Many of them share our excitement about the redevelopment and look forward to the additional customers that will be visiting the center more regularly.

Isn’t Whole Foods going to put some small tenants out of business?
We believe that tenants who focus on their strongest assets and work to complement the offerings of Whole Foods, as they do with other potential competitors, can do well. Flower Hill is based on small, entrepreneurial merchants who do very well at building a loyal customer base.

Will tenant rents be going up significantly when the renovation is completed?
As tenants know, lease agreements generally depend on market rates at the time of negotiations. We will continue to negotiate in good faith, as we have always done, lease arrangements that work for both our tenants and for us. In general, we expect the new development to draw more customers to the center, benefiting all tenants.

When are you going to renovate the existing retail stores?
The intention is to reface the existing retail but not to disturb tenants with added construction or expansion there. We don’t know the exact timing of that because we are focusing first on the west end of the project. Over the past 12 months we have renovated 13 new stores and will continue to upgrade as we attract new tenants.

Isn’t Paradise Grill in violation of certain city codes?
Paradise Grill has complied as directed by the City with all requirements. They were given a new requirement by the City at the end of their build-out and they received approval by the City Council for the required permit. The matter has been challenged and is currently being handled by the City of San Diego.

Why hasn’t there been more communication to tenants about the renovation?
We have met with tenants several times and continue to meet when there is significant news to report. We have always been up-front with tenants about where we are in the development process and our door is always open to discuss the revitalization of Flower Hill.