Seaport San Diego Developer Gets Extension on $3.8B Project

The Board of Port Commissioners has extended for three years the entitlement phase of an exclusive negotiating agreement (ENA) with the developer of the $3.8B Seaport San Diego project.

The developer, 1HWY1—who was selected in a competitive bidding process in 2016—now will have until Oct. 1, 2027, to secure necessary government approvals and raise capital for the massive mixed-use redevelopment of the Central Embarcadero bayfront.

At this week’s meeting of the commissioners, the board unanimously adopted the recommendation of a staff report to extend the timeframe of the ENA, the San Diego Union-Tribune reported.

“By extending the negotiating timeframe, the [ENA] supports 1HWY1′s efforts to raise significant investor capital necessary to continue moving the proposed development through the entitlement and environmental review phase,” the staff report said.

The mega-project envisions a complete remake of the downtown’s Central Embarcadero, a Port of San Diego subdistrict that includes Seaport Village and stretches along the waterfront from Embarcadero Marina Park North to the G Street Mole near the USS Midway Museum.

According to a project description submitted when the port initiated a California Environmental Quality Act (CEQA) review last fall, Seaport San Diego will encompass 2.7M SF of mixed-use development, including 2,050 hotel rooms spread across seven properties, 215K SF of retail and restaurant space, and 220K SF of office space designated for ocean research. The centerpiece of the project will be a 500-foot-tall observation tower. Seaport San Diego also will include 16 acres of parks and open space, 159 boat slips and 2,250 parking spaces.

The original ENA for the project in October 2017 allowed a two-year window for negotiations. Since then, the contract has been extended several times.

The development team originally aimed to start construction of Seaport San Diego in 2020. After the onset of the pandemic, the Board of Port Commissioners pushed back the ENA’s expiration date to Oct. 1, 2024.

This week’s amendment allowing the ENA’s pre-development entitlement period to run for 10 years makes it the longest development contract in the port’s history, a spokesperson for the agency told the Union-Tribune.

“1HWY1′s proposed project is currently going through CEQA review, as well as review by the California Coastal Commission, and, if constructed, will be located within downtown San Diego—the highest density location in the county,” the port spokesperson said. “All of these factors increase the timeframe to move from the ENA phase to presenting any sort of entitlements or definitive development agreement to the board for consideration.”

The original plans for Seaport San Diego included elongated piers with more boat slips. The water-use plan was adjusted after pushback from federal agencies concerned about protecting wide passageways for large ships sailing through the federal navigation channel in San Diego, the report said.

Large ships including the USS Carl Vinson, a Nimitz-class nuclear-powered aircraft carrier that is based in San Diego.