Imperial Beach has gone National City one better on redevelopment: The entire city of 27,000 has been declared a redevelopment zone. Early in December, the city sold $22.5 million in redevelopment bonds. “Now we’ve started on a process to develop a five-year capital plan as well as a business development plan,” says Mayor Diane Rose. In other words, to figure out how to spend it.

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Imperial Beach’s struggles for survival over the years—it came so close to bankruptcy there was talk of having the county take it over—have revolved around saving the tiny beach town that is, without question, the last relatively inexpensive oceanfront city in California. Home prices in Imperial Beach averaged $374,000 last year—way below elsewhere, but a huge increase from the $312,000 average in 2002.

“Most are still fixer-uppers, but they’re in great locations,” says former interim city manager Lauren Wasserman, a retired county planner and Encinitas city official who spent six months in I.B. before a new city manager took over in December.

In recent years, the town’s biker-bar image has given way to the laid-back California beach town image Imperial Beach citizens want. A vigorous code-enforcement program over the past four years has encouraged homeowners to improve their properties (with the help of hefty fines that are actually levied, much to the amazement of recalcitrant property owners). Imperial Beach’s lower prices have also meant more owner-occupied homes in a town that, a few years ago, was 70 percent rentals. Now redevelopment money may help homeowners even more, by providing down payments for first-time buyers.

Imperial Beach boosters say redevelopment will push along what the improving property values have already started. “We had 23 new homes built in Imperial Beach this year, where people scraped the lots and started over,” says Rose. It might not sound like much by Chula Vista standards, but it’s a “real shift that has been gradual,” she says. “It’s a stabilization of the neighborhoods.”

Critical to redevelopment in Imperial Beach, eminent domain—the forced sale of property to a government agency—cannot be used to buy any home to convert it to commercial purposes. That alone was the sticking point that kept skeptical citizens, who envisioned massive high-rises erasing their small-town life, from supporting any redevelopment, until the council voted against eminent domain.

Commercial development opportunities for tiny Imperial Beach are limited. As it is, city officials are ecstatic about sales-tax revenues that are up 8 percent in the year since the opening of I.B.’s first redevelopment project, the Palm Promenade, which includes the city’s only national retail chain, a Sav-On Drugs. This is big news in a city that counts on 25 percent of its $12 million budget from a contract with the Port District to provide lifeguard and other services on tidelands and at the beach.

But that oceanfront is calling out to Imperial Beach planners for a hotel and amenities that will continue to draw growing numbers of day-trippers to the shore—along with their money. As redevelopment moves ahead with more commercial development, visitors will travel a newly revitalized Palm Avenue to get there. Plans are being funded to redo the section from Third Street to Seacoast Drive to do what Mayor Rose describes as a “sort of Little Italy–type thing.”

“There is a lot of traffic that uses this street every day,” Wasserman says. “The key is also to get businesses in there that attract people going to work on Coronado so they want to stop and shop.”

Hefty investments by the Port of San Diego have helped create more tourist-friendly beach areas, as has improved quality of the ocean water lapping at the sand. The 2001 opening of the international sewage treatment plant in Tijuana has cut the number of beach closure days from 130 a year to barely 30. “Now we’re open more days than parts of Mission Bay,” Rose boasts.

The city and county of San Diego also have their eyes on development in their southern jurisdiction. In the city’s portion of Otay Mesa—nearly 4,000 acres—new homes are quickly going up west of the 13 million square feet of industrial space already abutting the Mexico border. In the past three years, more than 1,300 houses were built, a whopping 291.5 percent increase. At the end of 2003, most single-family homes were selling in the high $200,000 to low $300,000 range, with a few as high as $600,000. In the same three years, 1,054 condos and apartments went up, a 232.7 percent increase. Plans call for as many as 32,000 people living on Otay Mesa by 2030, five times the 2003 population.

Most of the multifamily housing has been in apartments, but “City Councilman Ralph Inzunza wants to see more condos, once legal issues over construction-defect liability are worked out,” says Rob Hixson, chair of the Otay Mesa Planning Group and a CB Richard Ellis commercial real estate broker there for 17 years.

Otay Mesa’s industrial picture also is changing, with plans to come up with realistic uses for Brown Field, Hixson says. The area’s ties to the maquiladoras in Tijuana are still dominant among the businesses there, but now more companies are moving in with no ties to Mexico, because they see the available labor pool, including the minimum-wage, green-card workers who cross the border daily.

In unincorporated eastern Otay Mesa, there are 6,000 more acres of open space ripe for the kind of development going on north and west of it, in Chula Vista and the city’s portion of Otay Mesa.

“We’re working on getting specific plan approvals to develop it into an industrial orientation, a high-tech zone,” says Supervisor Greg Cox, chair of the county Board of Supervisors, the South County representative and a former Chula Vista mayor. “Overall, I think the transition that’s been going on in the South Bay, in general, is very positive. There are more jobs, the planned communities have been very well-designed and thought out,” he says.

The San Diego region is growing twice as fast as the rest of the country—for now, according to SANDAG’s “Preliminary 2030 Cities/County Forecast.” But “that gap will gradually narrow until sometime in the 2020s, when our growth rate is expected to fall below the national figure.” That sends the message that cities like Chula Vista have only so much time in the boomburb sun, and people have to do all the smart-growth planning they can to take advantage of the developable land that is left.

The prospect of that slowdown—and the ultimate lack of open space—may lead to a fight over unincorporated land that’s left in South County. Everyone is very polite about it now, but it’s clear the county wants to hold on to its jurisdiction—just as it’s clear San Diego and Chula Vista officials are salivating over the prospect of the property-tax base that acreage can provide.

“In Otay Mesa, you will have continual construction of more than a million square feet a year of industrial space,” says economist Nevin, the consultant for many Chula Vista developers. “It’ll be a battle between the city of San Diego and Chula Vista over who gets to annex this 6,000 acres. And it will be a hot spot for the next 20 years.”