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SAN DIEGO-”There’s an inertia and a momentum tied to any large-scale project,” John Kratzer, president and CEO of JMI Realty Inc., told a standing room crowd yesterday at the first annual RealShare San Diego event held at the Omni Hotel Downtown. Kratzer should know; he battled since 1998 for the development of Petco Park, which has proved a watershed project for Downtown’s resurgence. “Petco broke the logjam,” Kratzer said. “It allowed other projects to ride its coattails.”Jonathan A. Schein, president and CEO of New York-based Real Estate Media Inc., kicked off the event by praising the standing room crowd of conferences attendees, which included many of the area’s leading powerbrokers and dealmakers of commercial real estate, for their creativity and ingenuity in helping shape a resurgent San Diego. Kratzer followed with his energized keynote address. “The ballpark’s been a catalyst for redevelopment,” said Kratzer.Although he beamed when talking about the park’s success, he admitted to underestimating the depth of its ripple effect when plans for its development began in 1998. “We didn’t really understand how much more Petco was than just a ballpark,” Kratzer said. “Our $300-million commitment has become $590 million. And we had hoped for an additional $150 million built around it, but the park’s been responsible for more than $1.2 billion being built around it.”He said he learned numerous lessons during the laborious battle to get the park’s development off the ground. Chief among the lessons learned was the legal complexity of major public-private partnerships. “We wound up two years behind schedule because of the 17 lawsuits filed against the project,” Kratzer said.The project continued to face roadblocks even after the construction had begun. “This place looked like Stonehenge with steel coming up out of the ground,” said Kratzer. “We had $40 million already invested in the project but were preparing to walk away from it if it were stalled any further from litigation.”Kratzer heeded a final warning to developers and investors in attendance. “Be financially prepared if you’re planning to attempt a large-scale project.”Later, Michael Desiato, editor-in-chief of Real Estate Media Inc., told conference attendees about a proposed ballpark in his hometown of New York and said proponents there could benefit from some of the ideas created by the development of Petco Park. Next up was Hessam Nadji, chief marketing officer and managing director of Marcus & Millichap, who delivered a talk on the Facts and Figures Behind the San Diego Investment Market.Nadji pointed to both positives and negatives in the San Diego market. “Housing prices are up 140% since 1999,” Nadji said. “That’s okay for now, but at some point, when the music stops, there will be a shortage of chairs.”He also added that retail was the strongest product type but to be aware of the retail zombie tenants. “Some of them are dead, but don’t know it yet.” Nadji said.In the final session, Stath Karras, president and CEO of Burnham Real Estate Services, moderated a panel concerning the Outlook for Leasing, Investment & Development in San Diego Real Estate. Panel members included Louay Alsadek, an investment sales specialist with Grubb & Ellis/BRE Commercial; Robert Champion, president of Champion Development Group; Peter Hall, president of Centre City Development Corporation; Gary Katz, director of acquisitions for Westcore Properties; and Tony Thompson, chairman and CEO of Triple Net Properties LLC. During one of the panel’s many exchanges, Hall pointed to the Irvine Co.’s recent acquisition of Wells Fargo Plaza for $148 million as further evidence of investors’ bullishness on Downtown. “They’re banking that as leases roll, rents will go up,” Hall said.With RealShare San Diego now behind them, Schein, Desiato and Richard Kelley, conference series director, travel to Orange County today for the RealShare event at the Irvine Marriott and will be at the Omni Hotel in Downtown Los Angeles on Thursday for RealShare Net Lease West.

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