A rendering of the proposed Bajalta California mixed-use development, which would feature high-rise apartments and high-end shopping in Tijuana, Mexico. (SHoP Architects)

Tijuana’s historic Zona Centro, a 55-block downtown district and a ten-minute walk from the U.S. border, is undergoing a renaissance that is replacing taco stands and tourist curio shops with residential developments, great restaurants, collaborative workspaces, art galleries, bicycle stations, craft beer breweries, and other entertainment venues.

“This is now the place to be for a demographic of hipsters,” notes San Diego developer Greg Shannon, whose company, Sedona Pacific Corporation, recently started a new apartment project in the Centro district.

“A few years ago, you could have shot a cannonball down Avenida Revolución [the main drag through Zona Centro that the Tijuanenses call “La Revu”] and it probably wouldn’t have hit anyone,” he says. Shannon is chair of ULI San Diego/Tijuana and participated on a ULI Technical Assistance Program (TAP) panel, a team of volunteers from ULI San Diego/Tijuana and ULI Mexico City, that provided advice and recommendations for revitalization of Zona Centro.

The TAP panel’s primary recommendation was to create a dense, urban, walkable environment with a mix of uses to attract local residents to live, work, and play downtown. Shannon suggests that housing is the most important element for activating a central business district, because people need to be there 24/7 to support the commercial development and develop a community.

This once-thriving downtown tourist destination struggled during the first decade of the new millennium with a drop-off in tourism due to the increased border security following 9/11 that resulted in the passport requirement and long waits at the border, as well as the economic recession and drug-related violence, which peaked between 2008 and 2010.

About 70 percent of shops, restaurants, and bars in Tijuana’s entertainment district had closed or were abandoned by 2013 when the Tijuana Economic Development Council (EDC) asked ULI’s TAP team for help in planning the redevelopment of the city’s central business district (CBD). The TAP’s Revitalization Concept Plan focused on an area three blocks wide and nine blocks long on Avenida Revolución.

With 12 new projects completed, the public’s perception of downtown Tijuana is beginning to change. To celebrate its progress, ULI San Diego/Tijuana has selected Zona Centro for the 2017 Emerging Healthy Places Award. “One interesting thing about this award is it is recognizing a community, rather than a building or project,” comments Shannon.

A more traditional pedestrian shopping area off of Avenida Revolucion. (Bustamente Realty Group)

A more traditional pedestrian shopping area off Avenida Revolución. (Bustamente Realty Group)

“La Revolución is an epicenter of food, design, and art that is redefining Tijuana. While the city’s story is far from written, progress made over the past five years is changing the way people live, work, and play in Tijuana’s central business district,” notes Heather Foley, executive of ULI San Diego/Tijuana. “The world-class culinary scene is promoting and supporting healthy diets. The influx of new businesses, including craft brewers, artists, and boutique hotels, is contributing to a reduction in violence and a more vibrant streetlife and increased walkability,” said Foley.

In addition, Foley notes that with the introduction of a bus rapid transit (BRT) system in Tijuana, residents now have healthy urban transportation options.  “The future of Tijuana is dramatically different from its past,” she continues. “We can expect the next five years will bring increased environmental sustainability and urban vibrancy.”

CEO and co-owner of Grupo Inmobiliario Bustamante Sergio Rosas, who grew up on both sides of the border, was the first developer to do residential rentals in downtown Tijuana. Opening in September 2014, his mixed-use project, 7MA Y CONSTITUCIÓN, which was designed by architect Ramón Guillot, converted a couple of run-down family properties at the intersection of Calle 7ma (Seventh Street) and Avenida Constitución—a street running parallel to Avenida Revolución—to 12 loft apartments over ground-floor retail and office space. The project revealed high demand for modern rentals in the Centro district, with units renting before the project was completed.

Rosas and Guillot followed this experiment with a high-end, 20-unit rental project, Revolución 1764, on Tenth Street between Avenida Revolución and Calle Madero. This project was the first of three residential buildings that Rosas plans to develop around a central courtyard.

Private capital investment in Tijuana’s CBD has begun to transform Centro from an adult Disneyland for American tourists to an urban downtown neighborhood of local residents attracted there by new housing and a live/work/play lifestyle.

Tijuana’s government is also investing in infrastructure needed to make Centro a vibrant urban destination for both locals and visitors. Improvements include a new bridge across the Tijuana River; upgrading water and sewer lines; installing underground utilities, new landscaping, and hardscapes along streets; and expanding the mass transit system with a new BRT system that makes centros históricos more accessible to residents throughout the city.

The city also replaced a jail with a new, one-acre (0.4 ha) city park in downtown, the first urban park ever in Tijuana, Shannon notes. The Plaza Ocho includes a children’s play area, seating, and an amphitheater.

Cosmopolitan Group

Developed by Tijuana’s Cosmopolitan Group, Distrito Revolución is downtown Tijuana’s first luxury condo project and features terraces, a rooftop sky deck—with barbecue grills and comfortable seating—and a fitness center. (Cosmopolitan Group)

It all began in 2008 with grass-roots efforts by locals aimed at transforming this city of 1.7 million into a great place for Tijuanenses, rather than settle for being a playground for American tourists, according to Genaro Valladolid of Tijuana’s Bustamante Realty Group.

“What’s happening with the food, wine, and craft beer culture is very organic and the result of a new generation with a different outlook starting to do things,” he says, noting that Centro is fast gaining a reputation as a hip urban district with an evolving culinary scene. He compares the Centro district’s redevelopment to what happened in downtown San Diego ten to 15 years ago, with new residential projects and lifestyle retail amenities attracting early adopters and millennials to live downtown.

Valladolid notes that 40 of the 69 units at Distrito Revolución, a 16-story condominium project under construction that his company is marketing, have been presold. Developed by Tijuana’s Cosmopolitan Group, Distrito Revolución is downtown Tijuana’s first luxury condo project and features terraces, a rooftop sky deck—with barbecue grills and comfortable seating—and a fitness center. Condo units sell for between $125,000 and $175,000, and the three penthouses are priced at $300,000.

Shannon also notes similarities between redevelopment of downtown San Diego and Zona Centro, but points out that it is happening faster in downtown Tijuana because it generally takes only one month to get entitlements.

A former department store has been repositioned as apartments. (Bustamente Realty Group)

A former department store has been repositioned as apartments with ground-floor retail. (Bustamente Realty Group)

Other new projects include the three-story SARA Building, a former department store repositioned by local developer David Saul Guakil to a mixed-use project. It consists of the Eazy Workplace, a new coworking space that opened in May on the second and third floors and ground-level retail spaces, which are occupied by a coffee shop and a dentist. Guakil also plans to put a new a restaurant on the building’s rooftop.

Locally based developer Miguel Marshall’s company, Centro Ventures, repositioned the former 1950s-era customs station, Estación Federal, to a mixed-use project with a cluster of office spaces and apartments. The project also has a café, deli, shipping-container art gallery, craft brewery, and courtyard that hosts a monthly farmers market. In addition, Marshall’s company redeveloped the dilapidated former Mexicoach bus terminal into a coworking space called HubStation and created a series of box gardens along the Tijuana River, which are tended by U.S. deportees.

Mexico City–based Cine Tonalá repositioned an abandoned building near Seventh Street to a cultural center with restaurant-bar that presents films, music, theater, and other entertainment offerings like standup comedy.

San Diego developer Greg Strangman, founder and principal of L.W.P. Group and TAP team member, also recently reopened the 1940s-era Hotel Lafayette, rebranding ONE BUNK following a total renovation into a boutique hotel. The new hotel has nine contemporary rooms with an edge, artistically designed by architect Jorge Garcia. Rooms are priced at $85 to $95 a night on weekdays and $130 to $160 per night on weekends, and the hotel features a small lobby bar area and ground-floor retail spaces occupied by a coffee roaster, wine purveyor, boutique, and barbershop.

“This was a simple, minimal building with an attractive location on Avenida Revolución,” Strangman says, noting that the Brambila family, which had owned the property since the 1940s, entrusted him to build a project that local people would use. “The locals are the pulse and energy of the city, so it was important to me to create spaces locals want to go to shop, pick up a bottle of wine, or have a drink,” he continues, noting that Object, a unique designer store in Tijuana that sells works by artisans from all over Mexico, opened a smaller-version boutique store at ONE BUNK.

Branded Brik10, the three-story brick office building on Tenth Street, between Madero and Negrete avenues, features a rooftop garden terrace, a meeting space, a café on the ground floor, and off-street parking. (Bustamente Realty Group)

Branded Brik10, the three-story brick office building on Tenth Street, between Madero and Negrete avenues, features a rooftop garden terrace, a meeting space, a café on the ground floor, and off-street parking. (Bustamente Realty Group)

Fernanda Padilla, another developer who grew up and was educated on both sides of the border, tapped Tijuana architect Raúl Jiménez Susarrey to help her convert a three-story flophouse into a 17-suite office building, maintaining the structure’s authenticity and historic character to attract a new generation of creative office users.

Branded Brik10, the three-story brick office building on Tenth Street, between Madero and Negrete avenues, features a rooftop garden terrace, a meeting space, a café on the ground floor, and off-street parking. It is 100 percent occupied with tenants that include architects, furniture designers, a specialist in high-end restaurant interiors, and social media marketing strategists.

Padilla and Jiménez are now collaborating on an apartment project in nearby Colonia Cacho, an affluent residential neighborhood.

This new wave of developers is hoping that the projects they create will serve as a catalyst for more projects that bring residents and businesses back into downtown Tijuana. “We are starting to get a bone structure for the cool, walkable environment millennials desire,” says Gabriel Garzo, another San Diego–based developer doing projects in Tijuana and cochair of ULI San Diego/Tijuana’s Binational Committee.

Garzo is currently the director of development at Rancho Ontiveros, a 6,000-acre (2,400 ha) multiuse residential and commercial project on the east side of Tijuana near Tecate. He notes that the city’s new BRT service offers residents in eastern Tijuana and other neighborhoods faster access to downtown.

Realtor Sergio Arturo Gonzalez says that with lots of modern residential projects rising in Tijuana and a growing number of lifestyle retail amenities, his company’s website gets 35 to 40 requests daily from San Diego residents for information on residential units in Tijuana. “I don’t think we have the infrastructure and lifestyle of San Diego yet, but the cost of almost everything is much less,” he says, noting that new condos with amenities sell for $125,000 or rent for $800 per month and fresh, organic foods and other essentials cost much less in Tijuana.

Many popular U.S. lifestyle trends are being replicated in Tijuana. An example is Food Garden, a popular culinary stop for foodies from both sides of the border. The new mall-based food hall provides a “gastronomic ecosystem” designed to benefit Tijuana and Baja California’s producers, suppliers, restaurateurs, and their customers. The 11,000-square-foot space (1,000 sq m) in the prestigious Plaza Río includes 12 kitchens run by some of the region’s most notable chefs; a specialty coffee shop; two bars serving beer, wine, and spirits; and a demo kitchen for culinary workshops and classes. The food hall’s marché-style gourmet market also offers an array of regional products, such as cheese, wine, chocolates, and homemade desserts, as well as high-quality handmade products.

At present, 52 projects in the works are aimed at middle- and upper-income Americans, and another ten to 13 will be added to the pipeline in the next three months, according to Gonzalez. A major new residential mixed-use development underway is BajAlta California, a 2.76 million-square-foot (256,000 sq m) mixed-use development. Designed by New York City–based SHoP Architects, this is the largest project ever in the San Diego/Baja California region, with a 35-story, 330-unit residential tower and curated shopping mall of branded U.S. retailers, like American Eagle and Levi’s, which is being tenanted by Probien.

The Secure Electronic Network for Travelers Rapid Inspection (SENTRI) program prescreens people who routinely cross the border for a special card, which considerably shortens border crossing times to between ten and 30 minutes. The SENTRI has made it viable for U.S. citizens to live in Tijuana and commute to San Diego for work, and an estimated 30,000 to 50,000 already do.

Higher end craft brew pubs, clothing stores, and cofee shops have begun to replace the older store fronts along Avenia Revolucion. (Bustamente Realty Group)

Higher-end craft brew pubs, clothing stores, and coffee shops have begun to replace the older storefronts along Avenida Revolución. (Bustamente Realty Group)

San Diego economist Paul Marra, who was part of the TAP team, does not live in Tijuana, but he secured a SENTRI card because he visits often to dine and shop in downtown, which he notes has amazing restaurants, boutiques, and coffee shops up and down Avenida Revolución and on Sixth and Seventh streets. “Everything feels safe and well maintained,” Marra says, “and every time I go, there’s signs of new investment in the area.”

David Mayagoitia, proprietor at the Tijuana-based industrial development firm IN3 and new president and chairman of the board at the Tijuana Economic Development Corporation, is leveraging the redevelopment of the downtown to capitalize on what he believes are huge opportunities for economic growth.

He is collaborating with developers of San Diego’s I.D.E.A. District and San Diego Downtown Partnership to establish an IDEA District in downtown Tijuana.

According to Adriana Eguia, executive director of the Tijuana Economic Development Corporation, Tijuana already has a growing tech startup community and several tech incubators. In fact, San Diego tech startups like 3D Robotics, a commercial drone developer, are setting up shop in Tijuana to take advantage of the large number of engineers and programmers graduated by local universities, who are willing to work for a lower wage than U.S. engineering graduates.

“People want to make something happen in downtown,” says Mayagoitia, “but what we’re seeing is a small redevelopment effort that’s too fragmented. We’re getting real estate plays—coworking space and a few nice residential projects—but what we need is serious redevelopment that addresses issues like the need for places for more people to live and work.”

He emphasized the importance of changing the city’s “16th-century zoning requirements,” saying it is the top priority for redeveloping downtown and creating a tech cluster there that will attract tech and creative talent to create an innovation economy in Tijuana. Mayagoitia is currently working with the city’s planning agency to update zoning in the 55-block area. He said that the rezoning effort has been a slow process but is moving forward.

Mayagoitia envisions another major medical center in downtown Tijuana that meets U.S. health care standards, so that it could be accredited by the U.S. Centers for Medicare and Medicaid to treat their patients. He believes that a quality medical facility such as this would be a major boost for Tijuana’s already thriving medical tourism business.

David Moreno, Tijuana’s secretary of economic development, notes that with the development of two world-class hospitals, Tijuana’s medical tourism business is growing, and generated about $800 million last year. Construction is also underway on a one-stop, mixed-use, 26-story medical complex called New City Medical Plaza near the San Ysidro port of entry. The complex will house a broad range of medical disciplines and provide a 140-room hotel for patients as well as a food court featuring Baja California cuisine from top local restaurants. Developers hope that the complex will be open for business by the end of 2018.

Mayagoitia’s idea for a medical facility, however, would include an academic research component. He is working with Tijuana’s EDC on a program that would allow foreign entities to bring the best and brightest life sciences and biotech professionals from all over the world to Tijuana.

“Every year, American companies and academia attract 1 million foreign professionals to apply for talent visas, H-1B visas included, but only 235,000 are approved. We plan to focus on the 700,000 [who] are denied,” he says. “We’re in a talent war, and this would provide academic institutions and corporations the ability to establish R&D programs here in Tijuana now, rather than later,” Mayagoitia continues.

The program’s two caveats, he notes, are that one in every ten professionals hired would have to be Mexican nationals and that researchers would be required to devote two hours per week transferring knowledge to Mexican universities.

Mayagoitia is hopeful that, with Tijuana’s innovation tech hub and a potential academic life sciences/biotech cluster, Silicon Valley and California drug companies will realize the benefits of sending research and development work to Tijuana rather than to China, since labor costs are now similar and Tijuana is geographically more accessible. Ultimately, the expectation is that the megaregion would benefit as the innovation centroid in California would move southward toward San Diego as talent from all over the world would settle in the area.