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$3.6B plan to overhaul Seaport Village, surrounding waterfront clears major hurdle

San Diego Port commissioners on Tuesday agreed to launch an environmental review of a $3.6 billion plan to remake Seaport Village and the surrounding waterfront, culminating six years of planning on one of the single biggest projects in port history.

The unanimous 7-0 vote signals the Port of San Diego’s willingness to move forward on a development that has undergone multiple revisions over the years and attracted, at times, significant concerns from various stakeholders, from downtown homeowners to commercial fishermen. Commissioners themselves have expressed reservations in the past, and just last month, the staff of the California Coastal Commission weighed in with deep concerns of its own.

Although they acknowledged those pockets of opposition, commissioners lauded the developer, 1HWY1, for the numerous changes it has made to its proposed redevelopment of downtown’s Central Embarcadero. The time is now, they said, to move forward, with the caveat that the Tuesday vote is not an expression of formal support for the development itself nor does it represent a commitment to Seaport San Diego.

“We need to think big; if we stall, if we wait, it’ll take another 10, 15 years,” said Commissioner Rafael Castellanos, calling the redevelopment of the Central Embarcadero a “transformational” undertaking. “Many people will be very happy if that’s what we do. I’m not willing to not try to swing for the fences and to not think big. It’s really hard to do something like this. After six years, it’s time to take it to the next level of review.

“There’s no progress without disruption. This will cause some disruption but I think it’s well worth it.”

Commissioner Michael Zucchet, who has wrestled in the past with the project’s potential impacts on the waterfront, pointed out Tuesday that it will take the kind of private development 1HWY1 is proposing to help pay for the public amenities, open space and recreational opportunities the county’s residents are craving.

“But at the end of the day,” he said, “I’ve grown to like a lot of directions this project is headed and I do support moving it on.”

In addition to dozens of comments made during an hours-long hearing, there were some 210 letters written in support of proceeding with the environmental review of Seaport San Diego and 46 opposed, the port reported.

The port action is clearly a pivotal moment for the project, said Yehudi “Gaf” Gaffen, who runs 1HWY1. The developer has so far invested some $20 million in the project, he said.

“It’s been a fast but a long six years, and I really do believe this is a major inflection point,” Gaffen said following the port hearing. “It’s taking a concept into the reality of testing that reality and the impact. I’m really excited and it’s a big step forward for us.”

The ambitious project would require demolishing the existing Seaport Village and remaking 105 acres of land and water area on San Diego Bay with 2.7 million square feet of mixed-use development.

Among the planned components would be 2,050 hotel rooms spread across seven properties, including everything from a five-star boutique hotel to a hostel and low-budget “micro hotel” of 285 rooms. In addition, the project calls for a 500-foot observation tower at the start of Pacific Highway, nearly 216,000 square feet of retail and restaurant space, 561,400 square feet of floating docks and fixed piers, and more than 220,000 square feet of office space reserved for ocean research-related enterprises.

Also planned are a school, a commercial fishing facility, an urban beach, a large event center, 158 boat slips, and 16.2 acres of parks and open space, plus an aquarium, yacht club and elevated walkway.

In November 2016, the port selected 1HWY1 to redevelop the expansive waterfront area, and the parties have been negotiating lease and development terms since October 2017.

As recently as July, some commissioners still had concerns with the enormity of the project — more specifically, the idea of high-rises replacing the more quaint, low-level Seaport Village. There were also significant issues raised by the commercial fishermen who operate out of nearby Tuna Harbor.

Taking the feedback to heart, 1HWY1 has since reduced the overall slip count, which drew objections from people worried about an influx of parked boats and obstructed water views. And responding to grievances from the fishermen, 1HWY1 axed plans for a restaurant that was to go atop a new fish processing building. It also removed planned retail uses on the north end of the G Street Mole, and it has changed the traffic circulation on the mole, in addition to creating a more open fairway into Tuna Harbor.

Rendering of Seaport San Diego's urban beach

Seaport San Diego proposes to construct an urban beach at the southern boundary of the project on the peninsula known today as Embarcadero Marina Park North. The view looks northward toward the project, with a relocated Ruocco Park separating the beach from the tower and hotels in the background.

(Courtesy, CallisonRTKL Inc.)

While the commercial fishing community still has concerns about the project, the San Diego Fishermen’s Working Group sent a letter this week to the port saying it would not object to moving forward with an environmental review.

In its presentation to the commissioners, 1HWY1 stressed the multiple new viewpoints to the water that will be visible from Pacific Highway and Kettner, which is not the case now. Port Chairman Dan Malcolm also mentioned the new vistas as a key contribution to the project.

“There are zero view corridors from Kettner and Pacific Highway where you can see the water coming into the site, and those slides we saw (of what) you’ll be able to see coming down those roads were totally inspiring,” Malcolm said.

Opposition from various quarters, though, remains, most significantly from the staff of the Coastal Commission, which will ultimately have to give the project its blessing before it could move forward.

There are “fundamental concerns with the overall concept” that would need to be resolved, Coastal Program Analyst Melody Lasiter wrote, before the project could be found consistent with the California Coastal Act. As a result, the staff is recommending that the project “be redesigned to retain the existing mix of lower cost visitor and recreational facilities at Seaport Village and substantially reduce the bulk and scale of the overall proposal,” Lasiter said.

Coastal Commission planners specifically take issue with the height of the observation tower and other skyscrapers, as well as the relocation of Ruocco Park. While Commissioner Ann Moore said she is hopeful that the port, the developer and the Coastal Commission will eventually find common ground, Commissioner Frank Urtasan said he is not so sure.

Gaffen said he remains confident that there will eventually be a meeting of the minds.

“I’m sure there may still be issues that ultimately staff doesn’t agree with but as Ann (Moore) said, they aren’t the boss,” Gaffen said. “This is a stakeholder consensus that needs to be reached, and I’m confident that is a negotiation that will get resolved.”

With Tuesday’s vote, the port staff can now start the detailed environmental analysis required by the California Environmental Quality Act, studying a long list of potential impacts associated with the proposed development plan. Staff may also be required to conduct a review under the National Environmental Policy Act for portions of the site that fall within federal jurisdiction.

1HWY1, which will be responsible for covering the cost of the environmental review, estimates it will spend between $10 million and $15 million. The environmental process is expected to take at least two years.

Much is still to be worked out as the project moves forward, including the question of a possible public subsidy. Some commissioners have signaled a willingness to let the developer pursue up to $550 million in public funding to pay for site infrastructure and amenities.

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