U.S. Navy Picks Manchester, Edgemoor to Develop San Diego Project

After a year-long competition, the U.S. Navy has chosen a development team led by San Diego-based Manchester Financial Group to redevelop a 70-acre military campus in the city’s Midway District.

Manchester will partner with Virginia-based Edgemoor Infrastructure and Real Estate on the redevelopment of two large parcels that straddle the Pacific Highway and include the Navy’s NAVWAR facilities.

The partners, who are expected to enter into an exclusive negotiation agreement (ENA) with the Navy, each will take a 50% stake in the project, according to a report in the San Diego Union-Tribune.

The Naval Base Point Loma, Old Town Complex has been home since the 1990s to the Naval Information Warfare Systems Command and Naval Information Warfare Center Pacific divisions, which go by the acronym NAVWAR.

Working out of two aging WWII-era hangers, about 5,000 cybersecurity specialists work at NAVWAR. The redevelopment project, which may encompass up to 20M SF, is shaping up to be one of the largest public-private projects undertaken by the Navy.

The Navy put the property on the market in November, offering the land for in-kind consideration, meaning it intends to exchange the land for new facilities. In April, four development teams were invited to make detailed proposals for a 99-year ground lease for the site, which is adjacent to Interstate 5. A transfer of the property would be subject to approval by the Secretary of the Navy.

Manchester Financial Group was considered a front-runner for the project, which was modeled on a 2006 agreement with Manchester for the 12-acre Navy Broadway Complex opposite San Diego Bay. That public-private partnership resulted in a 17-story waterfront office building for the Navy Region Southwest.

Manchester later sold off the remainder of the Broadway site to IQHQ, which is developing a life science complex.

The NAVWAR project is expected to be a mixed-use development that will include new Navy office facilities, as well as residential units, hotels and retail shops. A preliminary environmental analysis conducted by the Navy involved a development concept encompassing nearly 20M SF, including 10K residential units, with the development spread across 109 buildings as high as 350 feet, the Union-Tribune reported.

“This is another step toward a win-win outcome for NAVWAR and the city of San Diego,” NAVWAR Commander Rear Adm. Doug Small said, in a statement. “We need secure, safe and modern facilities for our world-class workforce in order to keep pace with our growing mission requirements, delivering and sustaining information warfare capabilities for the fleet and our partners around the world.” Edgemoor is an affiliate of Clark Construction and specializes in public-private partnerships. Last year, the firm completed Kansas City International Airport’s $1.5B, 1.1M SF terminal. Edgemoor also co-developed the $513M Long Beach Civic Center, which included a new city hall, port administration building and library. The NAVWAR project is Edgemoor’s first project in San Diego.