Bold Developer Took a Chance With Luxurious Meridian Tower

The kid from Binghamton, N.Y., who spent 50 cents a week buying art supplies at Babcock’s hardware store and fantasized about being a commercial artist is grown up now.

Although Walter Alex Smyk never became the commercial artist of his dreams, the urge to find an outlet for his creative expression still burns fiercely--even as a millionaire developer.

Smyk, an accomplished photographer, book collector, art patron and correspondence-school architect, is the man behind San Diego’s bold Meridian high-rise condominium project, where a unit with sweeping harbor and ocean views, from Mexico in the south to beyond Point Loma, can cost as much as $1.4 millioN.

This less than year-old experiment in opulent living is occurring in a downtown where two nearby suburban-style condominium complexes offering units costing 80% less have had trouble selling out, even though they have been available for several years.

And Smyk has faced other obstacles as well, such as city officials who questioned whether he had the tools to play in the development big leagues. Smyk’s negotiations over the Meridian revealed a feistiness and a willingness to play hardball behind the grandfatherly facade.

But when you’re Walter Smyk, this only adds to the challenge and, he will tell you, to a feeling of intense accomplishment--the same kind of satisfaction he derived from immersing himself in photography for three years and then publishing his own book of professional-quality black-and-white prints. Today, he seldom takes photographs.

Make no mistake, though. Smyk, 57 and possessed of a baritone voice hardened by an endless chain of cigarettes, is not a dice roller. His financial success is based on carefully analyzed decisions, an obsession for detail and a clear understanding of his projects’ niche in the marketplace.

“The majority of people in San Diego don’t want to live downtown. In fact, just the opposite . . . the vast majority of people in San Diego wouldn’t live downtown if you gave them a home,” explained Smyk, as he sat behind a large wooden desk in his dark and comfortable office across the street from the tower, framed by a wall-size painting of hunting dogs in the country.

“But there is a minority of people who would absolutely enjoy the experience, and all we need is a minority of 172 that are in this income range.”

That’s his market: 172 people willing to invest a minimum of hundreds of thousands of dollars in a downtown that, like a gangling adolescent, is filled with abundant promise that is still years from maturity.

To attract them, Smyk has built a luxurious $71-million high-rise more typical of buildings in San Francisco and Manhattan. Paul Goldberger, Pulitzer Prize-winning architecture critic of the New York Times, said no one in New York City has built units as large as those in the Meridian in 50 years.

Rising 28 stories at 771 Front St., the Meridian--downtown’s tallest building--contains units ranging in price from $208,000 to $1.4 million. The exterior is composed of a precast concrete panel system and the formal entrance has walls of dark green Brazilian granite.

Designed in a modified triangular shape, the building is turned away from its biggest liability, its proximity to the Metropolitan Correctional Center across the street. There are several things that set the Meridian apart from other expensive high-rise condominiums. One of the most striking is the plaza that is two-thirds of an acre on the fourth level, at the heart of the complex.

Here, overlooking San Diego Bay, there are a grove of 25 purple-leaf plum trees, a formal European garden area, a swimming pool, a hot tub, private patios, a bar and nearly 360-degree views. Clustered inside on the same level are five guest suites, separate health spas for men and women, and a dining room.

Some of the Meridian’s best features, however, are hidden from view: the extra space between walls to minimize sound, a state-of-the-art ventilation system and oversized piping.

“It provides an elegant landmark quality to the development and enhancement and restoration of the downtown city core area,” said Joseph Martinez, an architect and instructor at San Diego’s New School of Architecture. “Its most successful aspect has to be the interiors, the way it’s art deco. . . . If it has any shortcomings, it’s that the art deco idiom wasn’t extended to the exterior.

“I wouldn’t say it was a cutting-edge project, but it’s a competent project,” Martinez said. “In some ways, it’s unfair to critique it now. Cities aren’t built at a single plane in history but evolve over time. The complexion of downtown hasn’t been cast yet; it hasn’t moved to its mature period.”

One of the most interesting things about the Meridian and Smyk is that it’s his first try at building housing, let alone the largest project he has ever attempted. “It’s more exciting,” he said, “to do something you haven’t done before. I hope this doesn’t come off sounding wrong, but when things are easy to do, you tend not to do them well.”

Until 1972, he had spent 14 years in various marketing and managerial posts with ITT and Honeywell before becoming an industrial real estate broker in San Diego.

Four years later, Smyk, in partnership with James T. Hill, began developing his own industrial parks. His biggest was the San Diego Business Center in Kearny Mesa, a 331,000-square-foot complex.

It was through his industrial development business that Smyk met Kazuo Inamori, a Japanese citizen and chairman of the board of Kyoto Ceramics, an industrial company based in Japan. One of Kyoto Ceramics’ subsidiaries is Kyocera International, a high-tech firm in San Diego that has grown from 75 employees in 1972 to more than 2,000 today.

The importance of this friendship was made evident when Inamori became the head of a trio of equity limited partners in Meridian Co. Ltd., the partnership that built the condominium tower. Smyk and Hill, now semi-retired and living in Idaho, are the general partners. Inamori and his limited partners put up at least $6 million to pay for the Meridian’s land, market research, preliminary design and detailed construction drawings, according to public records.

In 1977, Smyk and Hill left the tilt-up paradise of suburban industrial parks and went downtown. They paid $4.5 million for the old Charter Oil building at 110 W. C St., a plain, drab edifice that was 44% occupied and losing $40,000 a month.

“No one else would buy it. Everyone said it was a risky thing and I shouldn’t do it,” Smyk said. “It was one of those crazy things where no one else would do it, but I did and it became very successful. It just made sense because 1977 was a down market and so therefore I could afford to buy it.”

After attracting the Chamber of Commerce of Greater San Diego as a prime tenant, the building was 92% leased within a year and was soon worth $16 million.

It was from this downtown foothold that Smyk decided on the Meridian project. “I saw the potential of Horton Plaza and the Hotel Inter-Continental. I could just sense the potential of the whole coast and the downtown area. I could see it every day for what it was. Therefore, I wanted to do something downtown.”

After much research, Smyk determined that there was a gap in the marketplace. Housing projects were being built and planned for senior citizens and those with low and middle incomes, but there was nothing for the wealthy, which Smyk’s experience told him was synonymous with every successful downtown he had known.

That the market dictated housing and not something more familiar, like industrial parks, didn’t bother him.

“I did enough industrial parks that I could have built an industrial park from photographs in my office and never even gone to the site,” Smyk said. “It would have been that easy to do. In this case it was the highest and best use (of the land). I wasn’t alarmed by it being something I hadn’t done before. What it told me is that I had to give more attention than if I was doing another industrial park.”

Giving attention to detail is a Smyk passion, equal to his enjoyment of history. For example, he owns 25 books on San Diego history, all published before 1933.

“He is a man who likes things his way. Everything has to be just right, and to be just right for Walt is a tough task,” said Rob Schupp, director of public relations for Roni Hicks & Associates Inc., who helped Smyk put on the “topping out” ceremony for the building.

“He wants things perfect,” said Schupp, who describes himself as a Smyk admirer. “He reads every word of a press release.”

“I think, because of his meticulousness, he is a demanding person,” said Nadine Corrigan, vice president of real estate for The Stoorza Co., a public relations and marketing firm. Corrigan helped Smyk market the Meridian and stage the complex’s grand opening.

“He had an enormous pride in his project,” Corrigan said. “He expected superior quality from all of his consultants . . . for what he called a landmark endeavor. I think, as opposed to most other developers, he has a tremendous interest in art and history, and he brings that flavor to the building. He’s extremely detail-oriented. He used to blow me away.”

It was during the early phases of the Meridian that Smyk broadened his circle of friends. He became part of an informal “urban issues” group that periodically met in one another’s homes over potluck dinners to discuss “the great issues of the day,” in the words of one participant.

Included in this small group were people such as Max Schmidt of Centre City Development Corp. (CCDC); Mike Stepner, San Diego assistant planning director, and Roger Showley, a reporter for the San Diego Union. Among the invited guests was former Mayor Roger Hedgecock.

“I had heard of him, but I didn’t really know him,” Hedgecock said. “These were very informal gatherings. . . . He kind of wanted to make people familiar with his concept, and he also wanted to know what people in the community thought about downtown and the level of commitment.”

Hedgecock said that he, like others, had misgivings about the Meridian project, but that Smyk won him over. “He has a very tenacious, pioneer mentality,” Hedgecock said. “He’s very persuasive and he’s a salesman . . . but, like all good salesmen, he was sold on it himself. It still remains to be seen if he’s right.”

Soon after the Meridian opened in August, Smyk retreated from the public view. He became secretive and cautious, releasing few details about condominium sales. Today, Smyk says his strategy was not to call more attention to the project than necessary and thus set up high expectations that couldn’t be met. The result, he felt, would have been bad press.

So far, nine units have sold and 33 others are in escrow. Smyk, who said it will take three years to sell out, said, “We’re right on course.”

A 1980 Meridian project development plan anticipated a higher rate of sales. The document noted that “based upon absorption schedules of comparable projects” around the country, “an absorption of 75% of the units could reasonably be expected within 18 months of the inception of the marketing effort.” That translates to about seven units being sold each month.

Smyk, who with his wife, Mary, moved from Point Loma and into a unit on the 24th floor, said the Meridian project has begun to pay back part of a five-year, $65-million loan made by the Bank of America.

“The loan is for $65 million, but the maximum we’ll draw down will be $55 million,” Smyk said. “There’s no doubt that we’ll be successful. It may take a couple of years, but we’ll be successful.”

According to those who have worked for him, Smyk is his own best spokesman. He is friends with several local reporters. Showley was married on the Meridian’s plaza deck, and Smyk was a guest at the wedding of Gary Shaw, managing editor of the Daily Transcript.

“He’s got something burning in his gut, he’s a visionary,” said Shaw, whose paper has printed items about every Meridian sale on Page 1. “We print, first of all, all home purchases larger than $100,000 in the real estate briefs section, or (we print them) whenever there are newsworthy individuals involved. In the case of the Meridian, because it’s an unusual development, those (sales) are newsworthy and go on Page 1.

“I know that he was somewhat concerned that his project not receive too high a profile. He’s sort of whined about it but never asked me not to do it.”

“Developers aren’t very good with the press, but he’s one of the few who go out of their way to talk to reporters,” said Showley, a real estate writer who said he paid all the costs of his Meridian plaza wedding. “I don’t think he’s bought the press or tricked us down the stream. The project will survive or fail on its own merits, not by what we say.”

There is a toughness about Smyk that belies his gregarious, friendly nature. Once he and his partnership decided to pursue the Meridian project, Smyk delivered the proposal in 1980 to CCDC.

“Actually,” said a CCDC official, who asked not be named, “we were trying to discourage him. . . . The thinking was he was crazy.”

“I think they honestly felt we couldn’t do it,” Smyk said. “They kind of laughed in our face. ‘Who are you? You’re local. You can’t possibly pull off such a deal.’ ”

The agency, while not directly turning down Smyk, solicited proposals for a Meridian-type project.

“In the meantime,” Smyk said, “because we felt we were getting screwed, we started buying up the land parcels, perfectly legally--no one said we couldn’t.”

When CCDC’s deadline for proposals hit in February, 1981, only one developer had submitted a proposal: Meridian Co. Ltd., which by then owned 60% of the land on the block.

The company then bought the rest of the property without the use of public money, although CCDC threatened to use the power of eminent domain against recalcitrant property owners and leasers. “There isn’t one penny of government money in the Meridian. We paid every dime, which I’m proud of,” Smyk said.

As a result of what happened with the Meridian and some other disagreements about downtown development, Smyk’s relationship with CCDC and its strong-willed head administrator, Gerald Trimble, is very formal.

Last year, at a luncheon sponsored by San Diegans Inc., Trimble and Smyk were the guest speakers. Smyk strongly criticized Trimble and his agency for not doing enough to support downtown housing.

“It was unnecessary,” Trimble said. “Walt spoke after I did. . . . I felt it was very personal and I told him so. He’s an opinionated guy. But I don’t hold a grudge.”

Smyk said: “I think CCDC and the City Council have a strong commitment . . . (but) you need more than a commitment, you need conviction, and that’s the difference. The question is, do they have the conviction? . . . I don’t think they do. It’s not from the heart.”

“Heck no, I don’t agree with that,” Trimble said. “That’s his opinion, but I don’t agree with that.”

Smyk, part artist, part designer, part historian, part downtown cheerleader, part architect, part businessman, is already looking toward new projects and challenges, though he won’t reveal exactly what he has in mind.

“I’ve built a lot of buildings in my life,” he said, “and I don’t think I’ve ever walked away from one of them without saying, ‘I wish I would have done this. I wish I would have done that.’

“I honestly and truthfully cannot--and this I say with a great deal of humility--I cannot think of a thing I would change or do better or excel in in the Meridian than exists there now.

“So there are other challenges, without repeating the Meridian, that exist in my life.”