Port district gets aggressive on leases

Dealing with long-time lessees on port land has not been a strong point in the past by the San Diego Unified Port District. Major leaseholds up for recent renewal on Harbor Island and along the Embarcadero are now aggressively negotiated, much to the dismay of long-time tenants in current renewal negotiations.

The most publicized leasehold renewal this year was for the prominent site presently occupied by Anthony’s Fish Grotto. After 50 years of exclusive occupation and failure to provide upgrades, the Ghio Family tenant was left out of the bidding process for a leasehold renewal. Because of its long-time popularity, the omission generated public response. Anthony’s was reinstated as one of the three proposals for a complete rehab of the waterfront site.

A similar situation existed a few years ago when the site for Tom Ham’s Lighthouse was nearing the end of its leasehold. The Port District had not been pleased with the lease rentals from that prominent site at the end of Harbor Island. The faded and outdated venue was not drawing the business it could. That lessee anticipated the renewal and constructed a major upgrade to the restaurant, earning Port approval and a new lease.

Now we have another potential change in a major leasehold at Seaport Village. An $81 million redevelopment of the 20-acre site proposed by the lessee, Terramar Retail Centers, was rejected by the port commissioners and a new development team was solicited.

According to the report in the San Diego Union-Tribune, the commissioners expect a new development to generate better revenues to help offset the loss of Lindbergh Field income a decade ago. The jilted Terramar executive sent a sternly worded letter to the port referring to a "betrayal" after 12 years of working for a new vision for the Seaport property.

Officials at the Port District do not consider the Terramar redevelopment to produce much more rental than the current $2.5 million annually despite the proposed large increase in size from 92,000 square feet to 160,000 square feet. New features would include several upscale retail stores and a 300-room boutique hotel in addition to the usual gift shops and casual restaurants.

Redevelopment of the Seaport Village site does not affect The Headquarters, the adjacent rehab of the old city police station, also under lease to Terramar.

With the completion of the large parking garage on the Pacific Highway side of the airport, the land presently occupied by rental car agencies on Harbor Island will be vacated and eligible for new development. The 48-acre site is suitable for a new hotel. A proposal by Sunroad Enterprises at the adjacent marina for a 175-room hotel was rejected by the California Coastal Commission.

The California agency prefers that the port provides more lower-cost visitor accommodations. Of course this would reduce the lease revenues, so the Port District board authorized a lawsuit against the state agency.

As a postscript to dealings with the Coastal Commission, SeaWorld has entered into litigation against the state agency for its efforts to prevent breeding captive orca whales. The resulting editorial comments will have fun with this one: How can a state agency regulate the sex habits of mammals? Does it apply only to the coastal zone? Will the restriction be extended to other animals in captivity or even to humans? Where’s that provision in our state constitution?

Think about it.


Ford is a freelance writer located in San Diego. He can be reached at

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