Port Commission Splits East Harbor Island Redevelopment Between Two Developers
Source: September 13, 2016 Patricia Kirk, Bisnow
The San Diego Unified Port District board has split the
East Harbor Island Project between the two local developers, OliverMcMillan and
Sunroad Enterprises, who were finalists in the competition to redevelop 47
acres of rental car lots and 13 acres of water to a mix of uses.
If approved by the California Coastal Commission,
Sunroad will build a 325-room hotel on a nine-acre parcel known as the “elbow”,
because it connects the man-made peninsula to the mainland, and another 175
rooms to the east on Harbor Island. OliverMcMillan will build the bulk of the
35-acre project, including hotels, restaurants, shops and offices, as well as
man-made canals. The plan also calls for new $60M, 100K SF port district
headquarters building and new home for the harbor police, which the port
district will fund, reports the San Diego Union-Tribune.
Port District staff had recommended giving the entire
project to OliverMcMillan, which has proposed a $978M, mixed-use development,
with 1,500 hotel rooms, 271K SF of retail and office space, and man-made
canals, that would generate up to $10.5M annually in revenue after four years
of operation for the port district-three times as much as the rental car lots
had generated. Sunroad’s mixed-use proposal would have generated $8M for the
port after seven years.
Port commissioners decided at last week’s meeting to
award part of the project to Sunroad, after company chairman Aaron Feldmann
told them his company had spent $2M and 11 years trying to develop hotels on a
nine-acre portion of the peninsula. He said it would be unfair for the port to
give that element of the project to someone else.
Five of the six commissioners voted to negotiate
exclusive agreements with both companies and in favor of requiring the
developers to work together. Board chairman Marshall Merrifield, who recused
himself from the vote, welcomed the compromise.
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