Real Estate

Port of San Diego to Provide Temporary Financial Relief to Qualifying Tenants

melicone@portofsandiego.org (Marguerite Elicone (619) 686-6222) — Wed, 08 Apr 2009 18:08:42 +0000

Port tenants that are suffering from the nationwide financial crisis may soon get a break. The Board of Port Commissioners unanimously approved a resolution on Tuesday, April 7, that would establish a temporary financial relief program.

In the program, the most severely impacted tenants would be able to defer portions of their lease required rental payments.

The Port collects rent from commercial tenants, such as hotels and restaurants based on a percentage of sales, rather than on a fixed or flat rent basis. When sales-based percentages fall below a certain level, the Port requires a minimum annual rent payment.

Some of the Port's tenants have been experiencing such low sales that they are finding it hard to meet the minimum level and are paying the difference out of pocket. By doing this, the businesses are potentially impacting their operating capital. The newly approved program will focus on deferring minimum rent obligations for 2009 so that the tenants will have enough cash flow to stay in business. The deferred amounts will be paid back during calendar year 2010. Simple interest will be charged on the deferred amount, based on the Port's actual rate of return on its own investment portfolio.

The Port's small, independent, industrial tenants who pay flat rents and are having a difficult time meeting rent payments also have an option with the program. The tenants may defer up to 25 percent of the monthly flat rent required in the terms of the lease for each month during 2009. The tenants will have to pay back the deferred amount in 2010. They will have up to 12 months to pay it back, with simple interest.

The rent relief program is just one way the Port of San Diego is reaching out to assist its tenant businesses. The Port is moving forward with a vigorous marketing and public relations campaign to draw business to its tenants. Working with the San Diego Port Tenants Association, the Port will be developing promotional campaigns with special offers at restaurants, hotels, shops and attractions.

Notice of Preparation for National City Marine Terminal Wharf Extension and Port Master Plan Amendment

bmoreno@portofsandiego.org (Land Use Planning Department, (619) 686-6283) — Mon, 06 Apr 2009 17:01:45 +0000

The San Diego Unified Port District has prepared a Notice of Preparation (NOP) of a Draft Environmental Impact Report (EIR) for the National City Marine Terminal Wharf Extension. Comments regarding environmental concerns will be accepted until 4 p.m. on Monday, May 4, 2009.

The project is the completion of the western and southern faces of the wharf located at the National City Marine Terminal. The project would require dredging to accommodate deep draft vessels and a turning basin.

Dredge material would be disposed nearshore, in-bay, and/or offshore. Biological mitigation is proposed offsite at Grand Caribe Isle South and the D Street Fill area. Anchorage A-8 is also being evaluated as a potential dredge disposal and biological mitigation site.

The full Notice of Preparation, including a project location map, is provided in the attachment below.

Arcadis, U.S., Inc. Selected for Broadway Pier Cruise Ship Terminal Construction Management

melicone@portofsandiego.org (Marguerite Elicone (619) 686-6222) — Wed, 04 Mar 2009 23:11:01 +0000

The Board of Port Commissioners has selected Arcadis, U.S. Inc., a leading engineering firm with offices worldwide, to manage the construction of the Broadway Pier Cruise Ship Terminal project.

The proposed cruise ship terminal will be approximately 52,000 square feet and is planned to be used for public events on days when there are no cruise ships in port. It will be designed as a Leadership in Energy and Environmental Design certified building and feature equipment that will reduce the building's carbon footprint and water consumption.

Arcadis, U.S., Inc., will be providing construction administration, specialty inspection and testing services to comply with building code inspection requirements. The $1.2 million contract includes managing several components of the project: construction of the terminal, improvements to the pier and the assembly and installation of the mobile gangway connecting the cruise ships to the terminal building.

The Port plans to advertise the project for construction bids during a March/April time frame and will consider authorization of the construction contract by July 2009. The project is targeted for completion in December 2010.

Arcadis U.S., Inc. is responsible for completing more than 11,000 projects throughout the United States that have a combined value exceeding $20 billion. The firm has managed several major building programs in the San Diego area. The Arcadis team proposed for this project was selected from a group of 215 local professionals.

The Port of San Diego is a public benefit corporation and special government entity. Created in 1963 by an act of the California legislature, the Port manages San Diego harbor and administers the public lands along San Diego Bay. The Port has operated without tax dollars since 1970 and has been responsible for 1.5 billion in public improvements in its five member cities - Chula Vista, Coronado, Imperial Beach, National City and San Diego. With a $10.6 billion economic impact on the San Diego region, the Port oversees two maritime cargo terminals, a cruise ship terminal, 16 public parks, various wildlife reserves and environmental initiatives, a Harbor Police department and the leases of over 600 tenant businesses around San Diego Bay.

Judge Denies Union’s Challenge

jgilmore@portofsandiego.org (John Gilmore (619) 686-7206 (619) 341-5684) — Fri, 12 Dec 2008 00:54:16 +0000

A Superior Court judge has denied a local labor union's challenge to a major Port of San Diego project that includes the construction of two hotels on Lane Field, the former home of the Pacific Coast League San Diego Padres.

The written ruling was released this week by Superior Court Judge Ronald S. Prager who denied Unite-Here Local 30's claim that the Port's environmental review of the development was inadequate.

The union, comprised of workers in the airport, gaming and retail industries, filed the lawsuit after the Board of Port Commissioners approved a coastal development permit for the project in January 2008. The lawsuit challenged the Board's approval under the California Environmental Quality Act (CEQA), arguing that the Port should prepare a new environmental impact report because of inadequacies in a number of areas such as possible soil contamination and air quality.

The development, proposed for a 5.8-acre parking lot at the foot of Broadway between Harbor Drive and Pacific Highway, would cost more than $400 million and include two hotels, one with 275 rooms and the other with 525 rooms, with parking for more than 1,300 vehicles.

Before building can begin, the development must be approved by the California Coastal Commission. The commission will hold a hearing at its Jan. 8 meeting in the Oceanside City Council chambers to consider Unite-Here's challenge of the project.

Expansion of San Diego Convention Center Moves Forward with Approval of Memorandum of Understanding

melicone@portofsandiego.org ( Marguerite Elicone (619) 686-6222) — Wed, 03 Dec 2008 00:24:31 +0000

A proposal to expand the San Diego Convention Center came closer to fruition today as the Board of Port Commissioners authorized a Memorandum of Understanding (MOU) between the Port of San Diego, the San Diego Convention Center Corporation and Fifth Avenue Landing, LLC. The MOU will allow the three parties to negotiate terms for a new lease and option agreement for a new hotel and the expansion of the Convention Center.

Fifth Avenue Landing, LLC, has a lease expiring on June 30, 2024 and an option agreement to develop a 250-room hotel on its leasehold bay ward of the Convention Center. Fifth Avenue Landing's option to develop the hotel has been extended to November 30, 2009. This will allow the San Diego Convention Center Corporation a one-year due-diligence period to assess the feasibility of expanding the Convention Center and developing a hotel on the Fifth Avenue Landing site. If the Convention Center and the Port District agree to a new option agreement, then the Convention Center may purchase Fifth Avenue Landing's leasehold interest to make way for the expansion and a new hotel.

San Diego Mayor Jerry Sanders attended the Board meeting and expressed his support for the Convention Center expansion. "This forward-looking agreement will let us keep pace with other cities that are aggressively working to take our customers in the convention market," he said. "An expansion will help us keep the biggest and most lucrative conventions and remain competitive long into the future."

Cheryl Kendrick, Chair of the San Diego Convention Center Corporation Board echoed the Mayor's remarks. "Our Convention Center has been the envy of our competitors, driving the economy and creating jobs. Since its opening, it has contributed $16 billion in economic impact to the region. The expansion would create 6,000 new jobs and have an annual impact of $2 billion."

The property included in the Fifth Avenue Landing, LLC option agreement includes 221,000 square feet of land and 360,899 square feet of water. The hotel project included in this option consists of a 250-room hotel that would stand about 23 stories. It includes 198 parking spaces, a water transportation center, an area for temporary docking that could accommodate up to 30 large yachts, a pedestrian bridge, public promenade and a public park/plaza. The hotel operator will be determined at a later date.

Port Names New Director of Land Use Planning

gbatuyon@portofsandiego.org (Marguerite Elicone (619) 686-6222) — Wed, 02 Jul 2008 23:18:19 +0000

The Port of San Diego recently appointed John Helmer as Director of its Land Use Planning Department. As Director, he is responsible for overseeing all land use planning, environmental review, and coastal entitlements for redevelopment projects on Port Tidelands.

Mr. Helmer has been serving as the Acting Director of the department since February 2008. He was initially hired by the Port of Diego in August 2004 as the Manager of Planning Services. Since then, he has led planning efforts on key Port projects like the proposed Chula Vista Bayfront Master Plan, the Lane Field development, and the Old Police Headquarters and Park Project.

With over 30 years of experience working in both the public and private sectors, Mr. Helmer has managed a wide array of planning projects including hotel conference centers, residential and industrial developments, and general and specific plans for cities and counties. He has extensive experience preparing and managing environmental impact reports, resource management plans, and opportunity and constraints analyses. Prior to joining the Port, Mr. Helmer was the owner of a planning and land use consulting business.

Mr. Helmer received a Bachelor of Arts degree in Geography from the University of California, Santa Barbara and completed all course work for a Master's Degree in Community and Regional Planning at California State University, Chico. To complement his education and work experience, Mr. Helmer has also served as the President of the Board of Trustees for the Land Trust in Santa Barbara County where he was closely involved with a number of successful land conservation and conservation management projects.

Port Signs Term Sheet with the Navy, Signifying Acquisition of 1220 Pacific Highway

melicone@portofsandiego.org (Marguerite Elicone (619) 686-6222) — Wed, 14 May 2008 21:24:46 +0000

A press conference was held on May 14 to announce the Port of San Diego's acquisition of a portion of Navy property at 1220 Pacific Highway. At the conference, Rear Admiral Len Hering, Commander, Navy Region Southwest and Stephen P. Cushman, Vice Chair of the Board of Port Commissioners signed the official document that allows the Port to take over the Navy's lease of the property.

Acquiring this property is a major step toward implementation of the North Embarcadero Visionary Plan, which will transform San Diego's Embarcadero area with a waterfront esplanade and various amenities.

"This property is a key piece in the redevelopment of the North Embarcadero," Vice Chair Cushman said. "The Port and its future tenant, Lane Field San Diego Developers, will turn the acreage into a bustling block with two hotels, public promenades and open space."

In 2005, the Port of San Diego and the U. S. Navy signed a Memorandum of Understanding that allowed the Port to acquire the long-term lease that the Navy holds on property located at 1220 Pacific Highway. The property includes a small portion of Navy land and property between the Lane Field parking lot and the Holiday Inn on the Bay. The area encompasses about 3.4 acres and includes several office buildings occupied by Naval Facilities Engineering Command Southwest.

The MOU allows the Port or its designee to acquire the Navy lease and construct a new facility, at a yet to be determined location, to replace the Navy's offices at 1220 Pacific Highway. The document, called a term sheet, was negotiated within the framework established by the MOU and allows the property t be acquired in two phases.

"Today's revitalization of the downtown waterfront from Seaport Village to Laurel Street takes partnership and the Navy is pleased to work closely with those involved to make it all possible," said Len Hering, Commander, Navy Region Southwest.

About 14,000 square feet of the property fronting Harbor Drive adjacent to the proposed Lane Field North development will be acquired in the first phase. This area will be incorporated into the hotel, retail and restaurants planned for Lane field North. The rest of the property will be released to the Port in the second phase.

Plans for Lane field North include a 275-room hotel that will be operated by Woodfin Suites Hotels, LLC. On Lane Field South, a 550-room hotel will be built. The operator will be InterContinental.

The Lane Field development will meet the strict requirements of the Leadership in Energy and Environmental Design certification, which is a national recognition. The certification means the hotel project will be designed to use less energy, less water and produce fewer pollutants.

Acquisition of the lease will result in a new administrative facility for the Navy and allow the Port to redevelop 1220 Pacific Highway and extend "B" Street through the property to North Harbor Drive, which is part of the Port's long-term vision for the North Embarcadero.

Port of San Diego Settles Lawsuit Involving Coronado Homeowners

jgilmore@portofsandiego.org (John Gilmore (619) 686-6222) — Thu, 08 May 2008 02:04:55 +0000

The Port of San Diego and Army Corps of Engineers have settled a federal court lawsuit involving two Coronado homeowners who built a 162-foot long wall without permits.

About three years ago, one of the homeowners received approval from the Port, the Army Corps of Engineers and Regional Water Quality Control Board to remove rocks placed on the beach. The rocks were removed and a new concrete wall, which encroached in Port jurisdiction, was built in front of the waterfront homes.

As part of the settlement, the homeowners have agreed to pay $25,000 to the Port to cover staff costs and $250,000 in penalties to the Army Corps of Engineers. They also agreed to replace the rocks on the beach and remove the footing of the wall from Port jurisdiction.

The Regional Water Quality Control Board ordered the removal of the wall because it violated the Clean Water Act. A separate lawsuit is still ongoing between the homeowners and the Regional Water Quality Control Board.

The settlement was reached on April 30 with the assistance of U.S. District Court Magistrate Judge Louisa S. Porter.

Shelter Island Marine Sales and Services Site in development

clucke@portofsandiego.org (CJ Lucke) — Wed, 30 Apr 2008 15:43:47 +0000

A Marine Sales and Services site on Shelter Island Drive will soon be redeveloped to include a brand new, two-story, 10,850-square foot building with a modern, nautical design. At the March 4 Board of Port Commissioners meeting, the board authorized a 60-day exclusive negotiating agreement with Island Partners, LLC to develop a marine sales and services site on Shelter Island. If all terms of an option and lease are agreed upon between the Port and the developers during the 60-day period, then the project can move forward. The development will be Leadership in Energy & Environmental Design (LEED) Certified, a national recognition that requires the use of sustainable materials and conservation of water and energy.

Other aspects of the project include a new, 9-foot wide public promenade and public art. The developers will also be working with the Marlin Club of San Diego to provide space for its ongoing activities. The Marlin Club provides a free, certified marlin and fish weigh station for the angling public. The waterside design will include 1,225 linear feet of usable dock space with 25 boat slips. The parking lot will include spots for 42 vehicles, two new driveways and accessible parking.

Five-year Capital Development Program Approved

clucke@portofsandiego.org (CJ Lucke) — Tue, 25 Mar 2008 21:31:10 +0000

The recently approved five-year Capital Development Program for fiscal years 2009-2013 includes a variety of projects that will benefit public access, the environment, the economy and recreation in the Port’s five member cities. The Capital Development Program is a planning tool that assists the Port with implementing capital projects and determining funding sources for these projects. There are 42 projects in the program, with 31 of those already approved and underway. This year, 11 new projects were added and were deemed high priority.

The Port has allocated $95.9 million to continue funding all of the projects. This total reflects $74.4 million included in the current Capital Development Program and $21.5 million that the Board of Port Commissioners designated for the fiscal year 2009-2013 Capital Development Program. Following is a list of the 11 high priority projects.

1.    Providing shore power at the Tenth Avenue Marine Terminal, Cruise Ship Terminal and Broadway Pier: At its March 4, 2008 meeting, the Board of Port Commissioners heard an update on the Port’s Clean Air Program. At that meeting, they directed staff to move aggressively on the development of shore power capabilities to allow ships at berth to be powered by electricity rather than diesel fuel. The Board directed that $1.5 million be applied to the development of this capability. The California Air Resources Board will require that shore power, also known as cold ironing, be available at the Cruise Ship Terminal, Broadway Pier and Tenth Avenue Marine Terminal by 2014. Under the state regulations, if cold ironing is not available at the Port’s Tenth Avenue Marine Terminal, cargo vessels will not be allowed to dock there, resulting in the loss of valuable trade business. In addition, cruise vessels would not be permitted to berth if there were no shore power available. This project is intended to improve air quality in the areas surrounding the terminals.

2.    Funding for preparation of Environmental Impact Report for wetlands mitigation in the Chula Vista area: An Environmental Impact Report needs to be prepared for a project to restore a wetlands area in the City of Chula Vista. The Port needs to clean up the area because it contains contaminated material left over from a previous business.

3.    Relocation of the public restroom at Pepper Park in National City:
The relocation of the restroom will facilitate the development of the National City Aquatic Center. The restroom is in need of repair and is located in an area essential for the new Aquatic Center.   The new restroom will be in compliance with the Americans with Disabilities Act (ADA) requirements and is expected to save the Port money in maintenance and repairs.

4.    Additional funding for the Palm Avenue Street End Improvement Project in Imperial Beach: This project, already a part of the Capital Development Program, required supplemental funding. It is an extensive project that will provide environmental benefits, public access, public art and improved safety to the oceanfront in Imperial Beach. A seating area with artwork and landscaping will be constructed at the foot of Palm Avenue. Ramps will be installed on both sides of the plaza to allow beach access for emergency vehicles and to provide beach access for the disabled. The project also includes a unique stormwater diversion element.

5.    Preliminary design for the cruise ship terminal at the B Street Pier:
Improving cruise facilities at the B Street Pier in San Diego is vital in order to keep pace with the growing cruise industry. Over 260 cruise visits are scheduled for 2008. Each one of those visits brings about $2 million in economic impact to the regional economy. If the Port doesn’t have the facilities to support the expanding business, it could lose cruise calls.

6.    Additional funding for the former BF Goodrich South Campus Pavement and Demolition Project: The South Campus Demolition Project is an ongoing Capital Development Project on Port tidelands in the City of Chula Vista. In 2007, the Port completed the demolition of 63 industrial buildings that were part of the former BF Goodrich property. Additional demolition is needed to remove the remaining building foundations, slabs and underground utilities. The project will clear the area for development of the Chula Vista Bayfront Master Plan.

7.    Conference Center Site Demolition: This project includes demolishing three industrial buildings and the Chula Vista RV Park at Marina Parkway on Port tidelands in Chula Vista. It also includes removing pavement and utilities from the surrounding streets. The work will make way for a proposed conference center and hotel on the Chula Vista waterfront. The development will have a significant economic impact on the City of Chula Vista by attracting out of town visitors and new businesses to the area.

8.    Feasibility study of a parking garage on Grape Street: The Port has tentative plans to develop a parking facility near the Grape Street area at Harbor Drive in San Diego. This would assist with the expanded cruise ship facilities and need for additional parking on the Embarcadero of San Diego Bay. A feasibility study will be conducted to define what type and what size parking facility could be built in the area to assist with cruise ship parking and parking for the many harbor activities.

9.    Imperial Beach sand replenishment: This is an Army Corps of Engineers project that would help replenish sand on the shoreline of Imperial Beach. The Port will be assisting with the cost. The project will have recreational benefits for the City of Imperial Beach by improving areas where sand has been eroded by high tides.

10.    Marine Terminal Enhancements: This is a new project to make improvements to the Tenth Avenue and National City Marine Terminals to meet the needs of growing cargo operations. The project includes engineering, planning and preliminary design to make the improvements. It also includes demolition work, paving and improvement of storage areas.   By making improvements to the terminals, the Port is expected to increase its maritime operations, resulting in additional revenue and a major economic boost to the regional economy.

11.    Purchase property to create an industrial transition zone: The Port is committed to protecting the maritime-related businesses and industries along the waterfront in San Diego and National City. These businesses generate about $7.6 billion annually in economic impact to the region and provide more than 42,000 well-paying jobs. A transition zone is needed to help ensure compatible land uses around these businesses. Much of the area within the transition zone is under the jurisdiction of the cities of San Diego and National City. The Port is working with these two member cities and asking that planners consider the transition zone when updating municipal General Plans. Money set aside by the Port for the project would be used to purchase land adjacent to the two marine terminals. The project is designed to protect jobs and the movement of goods at the marine terminals. Additionally, it would help protect the public from noise and lights associated with maritime and industrial businesses by prohibiting residential development next to the maritime businesses.