Manchester Pacific Gateway LLC, which is developing the Broadway complex site in the North Embarcadero area, won't have to gain approval from the California Coastal Commission after all.
San Diego hotel developer Douglas Manchester filed a lawsuit in federal court in June 2007, claiming the property shouldn't be subject to Coastal Commission jurisdiction.
Manchester, who has a ground lease with the Navy, said because the site is on federal property, it is not part of the state's "coastal zone" despite its bayfront location. Federal Judge Jeffrey Miller agreed.
"The Navy Broadway Complex is being developed with the highest sensitivity to the environment and the coastline," said Manchester, chairman of Manchester Financial Group, the parent company overseeing the development in a prepared statement. "This ruling removes an important hurdle and moves us forward with development of this landmark project which will revitalize and invigorate San Diego's waterfront."
Rear Adm. Len Hering also said the ruling is an important milestone.
"This was a critical ruling for the Navy to move forward with this important public-private partnership and for the Navy to realize its long-sought objective for development of a new state-of-the-art Southwest Regional Command Center while providing for an array of public benefits for the people of San Diego," Hering said.
"This is a significant legal victory for Manchester and the Navy because it means that the Coastal Commission cannot assert its jurisdiction to require a Coastal development permit on Federal land which is excluded from the Coastal zone," said Steve Strauss, a partner at law firm Cooley Godward Kronish, Manchester's legal counsel who litigated the case.
The proposed Manchester/Navy joint venture will include more than 3 million square feet of office, hotel and museum space, including a new 17-story Class A office building for Navy headquarters, and more than 5 acres of public park and open space.
Plans are subject to change, depending on market conditions and other factors, but the first phase calls for a 382,000-square-foot office building for the Navy that Manchester is required to build first; a 240,000-square-foot speculative office building that may or may not be used by the Navy also; two hotels with 1,258 rooms and 193 rooms, respectively; and 136,000 square feet of retail space.
The second phase calls for a 535,000-square-foot office building, a 115,000-square-foot office building, a 164-room hotel and 140,000 square feet of retail.
The Navy's office building will be the first project up. That was a condition for getting the project under way.
Manchester, who recently sold his interest in the two towers of the Marriott Hotel & Marina he built, is very familiar with the San Diego bayfront.
The Manchester Grand Hyatt, which also now has two towers, is another signature project by Manchester, with two towers next to the Convention Center.
Perry Dealy, former Manchester president, who recently left the firm to return to his own development business but was retained as a consultant, conceded that financing such a multi-faceted project will be difficult.
However, he added that with proper due diligence, the foundations for that effort are being put into place.