“Infrastructure doesn’t grow on trees.” Port OK with the use of public money to fund Seaport San Diego


The developer proposing to redo the Central Embarcadero area that includes San Diego’s Seaport Village has received no pushback on potential public funding strategies from the government agency that is expected to consider preliminary approval for the project this month. next.

On Tuesday, San Diego Port Commissioners spoke favorably of 1HWY1’s plan to seek up to $550 million in public funds to pay for a portion of the infrastructure needs for the Seaport San Diego site and all of its public amenities – both that the funds do not come directly from the agency.

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“If the return is there, we need to invest in our future – if we want to transform our region, create good jobs that support families. Or are we going to do nothing? said commissioner Rafael Castellanos. “It takes money to make money, and like money, infrastructure doesn’t grow on trees. We need to evaluate all potential sources for a project like this to work, just like we did in Chula Vista.

The comments, meant to ward off criticism from people opposed to government subsidies, came after a presentation by Yehudi “Gaf” Gaffen, who runs 1HWY.

Gaffen told the commissioners of the group’s interest in using public sources of money to pay for public infrastructure and amenities. Revenue generated by the project – in the form of increased property tax or taxpayers’ money from hotels and spectators – could be used to pay for shoreline stabilization, underground utility works, new piers, reconstructed wetlands, boardwalks, an elevated bridge way, parks and the proposed urban beach, he said.

“We think and believe that this is a transformational project that can make a huge difference for our city. It…has the potential to really put our city in the same context as other major cities around the world,” Gaffen said. “In 40 years of work, I have never encountered a site as complex as the one we had to manage here. … In the end, our infrastructure costs more than quadrupled.

Backed in part by the famous Jacobs family of San Diego, Seaport San Diego proposes to redevelop the port sub-district that includes Seaport Village and follows the coast from Embarcadero Marina Park North to G Street Mole, just south of the USS Midway Museum .

In November 2016, the port selected 1HWY1 to redevelop the extensive waterfront area, and the parties have been negotiating lease and development terms since October 2017.

Over the years, the developer’s plan has morphed in size and scale – and price. The latest $3.6 billion proposal, which could receive preliminary approval next month, includes more than 2,000 hotel rooms across seven properties, significant retail and dining space, new piers and marinas, a large entertainment venue, a blue-tech office campus, a fish-processing facility, an urban beach, over 2,100 parking spaces and 16 acres of parks and open space.

Over a 30-year period, the project will generate $1 billion in new revenue for the City of San Diego and $400 million in new revenue for San Diego County, according to an economic analysis of the project commissioned by the developer. The sums have not been independently verified or reviewed by port personnel.

1HWY1 framed Tuesday’s discussion as the start of a conversation about public funding. The developer proposed a range of options, including an Enhanced Infrastructure Funding District, which would capture additional property tax growth – above what the city and county currently receive – at the project site. The creation of a special tax district, or community facilities district, is also planned to impose special taxes on hotels and entertainment venues on the project site.

The tools allow for a handful of public funding sources, including property tax increase, sales tax, transitional occupancy tax and tourism marketing district taxes, special district hotel tax and the special district amusement tax.

A concept scenario, presented by the developer, would see the project use $250 million in special tax dollars, generated from on-site hotel stays and ticket sales to entertainment venues, to fund critical infrastructure such as a new coastline that would not be washed away. the sea during a major disaster. A combination of other tax sources and site-specific grant funds could be used to fund the remaining $300 million in costs, or the developer could cut public infrastructure, Paul Gherini, a project manager, told commissioners. .

Four commissioners – Castellanos, Dan Malcolm, Ann Moore and Michael Zucchet – spoke approvingly of 1HWY1’s approach to public funding, calling the money investment in the region. They cited the resort hotel being built on the Chula Vista Bayfront, paid for in part with public money, as an example of a partnership to emulate. Harbor Commissioners Sandy Naranjo and Danielle Moore did not weigh in on the matter, and Commissioner Frank Urtasun was absent.

Key to the conversation is that public funding sources for Seaport San Diego would come at the expense of the city and county, not the port. That means the city and county will have to decide for themselves if they want to help fund the project, the commissioners said.

“As government agencies, we need to work together, and so I’m going to appeal to Mayor Todd Gloria today and I’m going to appeal to the San Diego City Council. And I’m going to appeal to the County Board of Supervisors,” Malcolm said. “Join us. Join the port. Collaborate with us. Let’s do something special together. We’re not doing that and we’re going to have 100% of nothing, which is nothing.

The proponent did, however, receive a caveat from Commissioner Zucchet, who cautioned against eliminating any aspect of the public realm from the project.

“I think it’s dangerous – and I don’t think it’s your intention either, by the way – to talk about the idea that if we don’t get this public funding, public infrastructure is in jeopardy. danger. That’s not how I see it. I see the whole project is in jeopardy,” Zucchet said. “We’re not going to do all the private infrastructure and not do any of the public infrastructure.”

The developer’s public funding ideas have been backed, during public comment, by local agencies and task forces, which welcome the prospect of boosting San Diego’s profile and adding more jobs.

In contrast, about 20 members of the public have written letters or left voicemails expressing their displeasure at the idea of ​​using public funds for a project they believe is too important or unnecessary.

“I object to the fact that the Seaport project wants more than half a billion dollars to pay for public infrastructure,” Janet Rogers, who is part of the Embarcadero Coalition, said in a voicemail message played during the meeting. . “For almost (six) years, the promoter has said that he can fully finance the project. Now he’s made such a monstrosity that he can’t pay and (he) wants the public to foot the bill. It’s a bait and a switch.

The Board of Harbor Commissioners, which took no formal action at Tuesday’s meeting, is then expected to receive an update on the project at its Nov. 8 meeting. Council will consider preliminary approval, an important step that would trigger the start of the environmental review process.


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