Economy making it difficult to sell Pacifica quarry

0 Comments | Oakland Tribune, Jun 16, 2009 | by Julia Scott

PACIFICA -- The vacant quarry that sits at the center of town, one of the best-known pieces of coastal real estate in Northern California, may become a victim of the recession if it isn't sold soon.

The 86-acre Rockaway Quarry has seen more dog-walkers than potential developers touring the site since it went on sale in March. The former limestone quarry with a troubled past has only been officially marketed to commercial developers since last week, but no offers have been forthcoming.

"Buyers are having trouble getting loans to buy commercial real estate. We do have a lot of interest but whether that's going to translate into viable buyers is another question," said Rick Ingwers, who is managing the Rockaway Quarry account at Cushman & Wakefield brokers.

The large "For Sale" signs are the only clue that anything has changed at the quarry site since environmentalists clashed with property owner R. Dohanue Peebles over plans to build a whole new neighborhood in the bowl of the quarry containing hundreds of homes, a hotel and shopping outlets. Pacifica voters ultimately rejected his proposal in November 2006, and the Florida-based Peebles Corp. finally put the property up for sale in March.

The company bought the Coastside quarry for $7.5 million in 2005; three years later, it was independently appraised at $90 million, according to Daniel Grimm, president of Peebles Pacific Development Corp., a subsidiary of the Peebles Corp. Market conditions have made it more likely that the company will be forced to accept an offer considerably lower than its most recent valuation.

"It's not realistic to look at $90 million anymore," Grimm said.

The state of the market has also made it more likely that Peebles Pacific won't necessarily favor a developer who has a vision for the site similar to theirs -- a mixed-use walkable community. If someone wants to built a strip mall or a storage complex, it could happen if the bid comes in on top.

"We'd like to sell it as quickly as possible," Grimm said. "At this point we want to maximize proceeds."

Peebles Pacific continues to pay property taxes, insurance and interest on loans associated with the quarry site.

Many generations of Pacifica City Council members have spoken longingly of the quarry's potential as an economic engine to rev up Pacifica's comparatively small commercial base.

But a housing-free development might be the least desirable outcome for both a developer and the city, according to City Manager Steve Rhodes. "What we've learned with that property is that a straight commercial development might not pencil out," he said. On the other hand, "Residential is not a good deal right now, because it's not easy to sell anything."

Any future developer attempting a mixed-use project in the quarry will need patience and deep pockets, because any residential project will need voter approval. It could be just enough of a deterrent to keep a buyer from bidding on the quarry site, Rhodes said.

"There's an acknowledgment that the property can enhance the economic well-being of the community while fulfilling the environmental expectation people have -- and that may be an impossible balancing act," he said.

Reach Julia Scott at 650-348-4340 or at julia.scott@bayareanewsgroup.com