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When the Port of San Diego decides the future of Harbor Island and Seaport Village out of a list of ideas put forward by developers, it could end up choosing the same developer for both projects.
Local developer Oliver McMillan has proposed major overhauls of both properties. Port commissioners Wednesday could select the company’s redevelopment plan for Seaport Village – or whittle down its list of six options and make a final decision later.
But Oliver McMillan isn’t the only local developer with the chance of shaping a vast swath of San Diego’s waterfront.
Another bidder for the Seaport Village area is Doug Manchester. He could break ground by the end of the year on his massive Navy Broadway Complex project, which would include a new Navy headquarters plus hotels, offices, shops and open space, is next door to Seaport Village. He also developed the Manchester Grand Hyatt, also next door to Seaport Village and the Mariott Marquis next door to that. All of that property would have been conceptualized by Manchester.
The development team behind Manchester’s proposal also includes HKS Urban Design studio, which designed the project. HKS is also the company that wrote the Port’s vision statement and guiding principles. That happens to be the very same document the Port is grading each development proposal against, to ensure consistency with the Port’s long-term strategy.
Oliver McMillan is also vying to develop two substantial pieces of San Diego’s waterfront, though they aren’t contiguous. The company is competing with one other proposal for development rights on Harbor Island.
The company’s proposal for Harbor Island is far more ambitious than its competitor’s. Oliver McMillan’s idea calls for up to $1.2 billion of new development on the island, which would be carved into canals for kayaks and paddle boards amid other commercial development, and two hotels with more than 500 rooms. The other project in the running is from local developer Sunroad Enterprises, which calls for just $300 million in new development, including two new hotels, an urban beach and research space for “blue economy” companies.
The Port will need to decide whether it has any reservations giving two prime sites to a single developer. On one hand, doing so could provide consistency between two major pieces of Port land. On the other, the agency would have a lot riding on the one company’s performance, and wouldn’t benefit from competing ideas.
It might need to weigh another factor, too.
One Port commissioner, Rafael Castellanos, has a business relationship with Sunroad Enterprises, and has recused himself from hearings whenever the company has had business before the Port.
Yet the Seaport Village decision – which doesn’t involve Sunroad – could affect the Harbor Island proposals – which does.
If the Port were to determine it doesn’t want the same developer controlling two prime waterfront sites, then Oliver McMillan winning the Seaport Village proposal would give Sunroad a leg up in its competition for Harbor Island. Castellanos has recused himself whenever Sunroad is involved in a project, but he hasn’t done so on Seaport Village. Sunroad could receive a secondary benefit on that decision, although it’s technically unrelated to their competition for Harbor Island.
Potential conflicts of interest and that fundamental question of how much say should one developer should have on public land are a couple of the many issues facing the Port as it sorts through the various proposals for the future of Seaport Village.
It also must consider questions over what’s suitable for public waterfront property in the first place, whether each plan is consistent with the Port’s vision of the future of its waterfront – which it’s still finalizing – and what’s best for its budget.
A Threat to the Fish Market
The proposals reimagining the Seaport Village space each mention maintaining the commercial fishing harbor and fish market, Tuna Harbor Dockside Market. They each describe the opportunity presented by a destination market and the importance of maintaining a working fishing pier.
Yet, the fishermen who work out of the pier and sell their catch at the market don’t think any of the plans would actually work for them – at least not the way they’re presented so far.
Peter Halmay, president of the San Diego Fisherman’s Working Group, sent the Port a letter Monday expressing the fishing industry’s concerns with all of the plans for the Central Embarcadero.
“No one came to us and said, ‘How is fishing done?’” Halmay said. “It seems to me that most of the plans want pleasure yachts there and to downsize the existing commercial fleet.”
He said the best proposal from his group’s perspective is one from Great Western Pacific, which focuses on creating a commercial fishing harbor along with amusement park rides but doesn’t propose a full-scale redevelopment of the entire area. The Port could opt to include its ideas within one of the other developer’s full redevelopment plan.
Halmay said he met with the developers and offered a lengthy list of technical and infrastructure needs to operate a commercial fishing industry and run a fish market. Based on the conceptual drawings of each plan, he said, it doesn’t look like the developers grasped how those needs fit together.
“Our vision is, we can make this a commercial fishing harbor that would be visually appealing, where people could come and see us offloading, and it would be like a working museum,” he said. “Basically they said, ‘We aren’t in the stage for details yet, we’ll do that later.’”
What Belongs on Port Property
The staff report from the Port, meanwhile, runs down a number of issues the proposals have raised in terms of what types of projects are suitable for Port land in the first place.
The Port’s mission is to protect the state tidelands it governs by striking a balance between economic strength and public benefit through mixing different uses of the land and water – a maritime industry, tourism, recreation, public safety and environmental stewardship.
It isn’t clear how some of the ideas in the various proposals meet that standard.
Most notably, Oliver McMillan’s bid includes a new, state-of-the-art sports arena. It would be developed and managed by AEG, the sports and entertainment giant that runs L.A.’s Staples Center.
The Bay Area offers examples for how a sports arena could be OK, and how it couldn’t. A new arena for the Golden State Warriors built on two piers in San Francisco needed special legislation to be approved. But the San Francisco Giants stadium, which is designed so it opens onto the water and includes different water-related public amenities, was considered OK.
Other developers proposed performance arts centers and entertainment venues that would also require more clarification on whether they maintain the Port’s basic requirements.
A group of local developers calling itself Protea proposed including a charter school on premises that would focus on marine biology and other maritime-related curriculum. It’s unclear if a school – even if it emphasizes water-based education – is an OK use of public tidelands.
And some of the proposals also include office space – though they’ve each described it as space for the “blue tech” or “blue economy” or “blue commerce.” Point is, they’re saying the space would be for water-related companies. Port staff emphasized that it would need to look further into what those companies are to see if it’s appropriate.
Filling offices with water-related companies might be easier for two of the proposals – Protea and Manchester Financial Group – which proposed just 19,000 square feet and 10,000 square feet of office space, respectively.
The Oliver McMillan proposal, meanwhile, includes 125,000 square feet of space for water-related businesses. And Denver-based developer McWhinney’s proposal calls for 250,000 square feet of such space.
That’s a lot of space to fill with companies that are inextricably related to the water.
The Port has also run into trouble of late with the California Coastal Commission, a state body that oversees development of the water, for not ensuring affordable lodging near the water.
The Protea development addresses this by including a youth hostel and “micro hotel” – a regular hotel with nice rooms that are affordable because they’re small. None of the other plans directly address the issue – although the Port has also sued the Coastal Commission over the principle.
Consistency With the Vision, and Complete Proposals
The Port hired the company Jones Lang Lasalle to review the financial feasibility of all the Seaport Village proposals.
For one thing, the company’s analysis showed many of the proposals didn’t include all of the information the Port asked for.
Only Protea’s pitch included all the different elements the Port wanted. Of the four main bids, which proposed a full site redevelopment, two of them – Manchester and Oliver McMillan – didn’t say how much the Port could expect as an annual rent payment, once the development is completed and stable. Protea said it would pay $22.5 million a year, and McWhinney said it would pay $10.4 million a year. The other two said nothing at all.
McWhinney also didn’t describe how it would provide parking for all the new development it proposed; the others all did.
Port staff, in its review of all the projects, also determined whether each plan was consistent with the long-term vision for the waterfront the agency described in a document meant to be the basis for an eventual master plan update.
The Protea team’s $1.2 billion development plan, staff said, had substantially honored the water, guaranteed the public realm, celebrated nature, created a plan for open space and provided easy access from both land and water. It had maximized public space – 75 percent of the 40 acres of land area in the plan are for the public – extended city streets all the way to the water, preserved view corridors and facilitated enjoyment of the bay.
Those were the same criteria used to determine each project’s consistency with the Port’s overall long-term vision.
The Manchester project, a $643 million proposal, was according to staff by and large consistent with those long-term ideals as well. Staff did say, however, the current level of detail provided didn’t make clear that the proposal would protect views of the bay.
Staff didn’t say whether the McWhinney project, which costs a total of $711 million, was overall consistent with the Port’s long-term vision. But it said the project had made good on all the specific criteria it had considered for consistency, except it would need more information on view corridors.
Likewise, the Oliver McMillan plan – the most expensive one, at $1.5 billion – is consistent, staff said, with the Port’s vision, except it didn’t extend downtown streets all the way to the water, as the Port had requested, nor did it provide enough information on view corridors.