ULI San Diego-Tijuana News

Tijuana, San Ysidro projects transforming border

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By Thor Kamban Biberman

Whether for medical tourism, affordable housing, or a retail experience, Tijuana is continually being transformed, and at least one binational proposal could constitute the greatest transformation yet.

The future of the binational region was the topic of a ULI San Diego-Tijuana chapter forum at the University Club Tuesday.

“This the only binational ULI council in the world,” said Diego Velasco, a principal with the M.W. Steele Group design firm who moderated the program.

Velasco said those coming into Tijuana can see how the skyline is changing.

“You don’t quite get the same experience coming the other way,” he said, adding that it is just as important that San Ysidro get the same attention.

Velasco said perhaps the greatest challenge — and the one with the most promise — is to create a cross-border development that is a destination itself, rather than a place to get through as quickly as possible.

“You need to make a place that people want to visit,” he said.

M.W. Steele Group has been instrumental in the creation of concepts that are now the subject of the ULI Technical Assistance Panel (TAP) study that would be implemented on both sides of the border.

“A visionary developer could build a mixed-use development that includes apartments, where such workers might like to live, close to their cross-border workplaces,” the TAP stated in its mission statement. “Americans, priced out San Diego real estate, represent a new for sale market for Mexican developers.”

The TAP report added that a commercial developer could also create co-working space for startups and satellite office users.

The binational plans also envision a major conference hotel, a community center, as well as a university presence right on the border at San Ysidro.

Addtionally, the Miller Hull Partnership has worked closely with Customs and Border Protection to develop new ways to process cars, buses and pedestrians in order to expedite processing of visitors while improving security at the San Ysidro Port of Entry.

Carolina Chavez, binational affairs director of the medical provider SIMNSA, noted how her firm announced in 2016 the construction of a full-service regional hospital just on the Tijuana side of the border.

The facility will include 120 hospital rooms and intensive care units, emergency services, surgery, cardiology, obstetrics, pediatrics and state of the art labs and imaging technology.

Chavez said once the hospital is in place in 2020, SIMNSA (which stands for Sistemas Medicos Nacionales S.A. de C.V.) will be able to handle triple the number of patients it does today.

Even without the new hospital, Chavez said Tijuana is home to at least $400 million in medical tourism spending annually. She said about $700 million worth of medical tourism monies are spent in Baja each year.

“There’s business enough for everyone,” Chavez said. “There’s $190 million being spent from people crossing the border from Calexico to Mexicali for dental work.”

The new hospital will need medical office space. Isaac Abadi is about a year away from completing the seventh tower in his NewCity Medical Plaza Tijuana development, which will feature 480 residential units, along with medical office space. A total of 120 residences will be completed during the next 12 months to finish the project.

“This will be a one-stop shop for medical tourism,” said Abadi, adding that what would otherwise be million-dollar units in San Diego are selling for about $300,000.

Chavez said for those who do not want to buy a home, renters can save about $1,000 per month if they are willing to live in Baja.

“It’s less expensive, and it’s close to the border,” he said. “You could walk across the border, take the trolley, and be downtown in 20 minutes.”

Not everything is as Abadi would like. While interest rates are on the rise in the U.S., they are still less than half the 11 to 12 percent rate people are paying in Mexico.

“Financing is so high there, and people want to know ‘How much am I going to have to pay per month,’ ” Abadi said.

While all this is going on, however, people are avoiding crossing the border, according to real estate consultant Gary London, whether it is an unwillingness to battle border lines or concerns about safety.

That problem could be alleviated by the $750 million renovation of the San Ysidro Port of Entry, which is scheduled to finish up sometime next year. The work will include adding eight more lanes for a total of 32 northbound vehicular lanes.

In July 2017, the pedestrian crossing known as PedWest at San Ysidro opened to southbound pedestrians. Nearly half of the 8.3 million pedestrians crossing the border in 2017 crossed at that location.

The grand reopening of PedEast in August added 22 lanes and has created a well-defined pedestrian loop.

London, a senior principal at London Moeder Advisors, said another component that might help would be to redevelop San Ysidro into a vibrant mixed-use area that, at the very least, would bring people to the border if not across it.

San Ysidro already lures many Mexican buyers, according to London.

Simon Property Group’s 560,000-square-foot Las Americas Premium Outlets is netting about $600-per-square-foot in sales, he said. But, for the most part, San Ysidro is still often overlooked in terms of its development potential.

“You could create a Mexican experience,” London said. “The best restaurants are in Mexico.”

On the other side of the border, London said that those developers who haven’t leapt at building in Northern Baja are missing an opportunity.

“With the Chula Vista Bayfront and other projects [in development], we’re going to see a lot more projects in the South County, and more housing opportunities in Tijuana,” he said.

A lot is at stake. The binational region boasts a shared economy of $230 billion, a shared workforce of 3.8 million and a combined population of 7.1 million people.

The region includes San Diego and Imperial counties in the U.S., and the Mexican cities of Tijuana, Tecate, and Mexicali.


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