To add to our already beautiful and vibrant downtown, developer Douglas Manchester is planning to move forward with his long-delayed plans for the $1.6 billion Pacific Gateway Hotel and office complex in downtown San Diego.
This project was put on hold several years ago with the depressed real estate market, the depressed financial community and the legal action on the project. But with office demand stabilizing and hotel values rising the development is back in motion to get ready to start construction.
Pacific Gateway is to be built on the site of the Navy Broadway complex, which is at the end of Broadway Street and opposite the Midway aircraft carrier museum, between Broadway, Pacific Highway and Harbor Drive, which is currently the site of the Navy Broadway Complex serving the Navy’s southwest region.
The plans, approved by the Navy five years ago, still call for four office towers, three hotels, retail and restaurant space and a 41,000 square foot museum space. Underground parking and a 1.9-acre park also are planned. Manchester won a long-term lease in 2006 from the federal government in exchange for promising to build a new Navy headquarters on the site.
Cushman & Wakefield has been hired to prelease the office space. A financial adviser is narrowing the search for a financial partner to help underwrite the costs. The hotel chain to operate the three hotels has not been announced yet, pending confirmation of an agreement. Manchester plans to begin processing detailed drawings through the Centre City Development Corporation in the first quarter of next year. If all goes well, construction on the first phase could start in the first quarter of 2013 and be completed two years later.
The first phase, valued at $850 million, would include the Navy building, a 1,058 room convention-style hotel and a 193 room hotel next to the Navy building, a 211,000 square foot speculative office building, 1,563 underground parking spaces and 135,000 square feet of retail space.
The $750 million second phase, including the park at the southeast corner of Broadway and Harbor Drive, would move forward once the Navy moves into its new headquarters at the site. It would include a 164-room hotel, 115,000 square foot office building near Seaport Village, 136,000 square feet of retail space and 1,425 more parking spaces.
Manchester strengthened his own finances when he sold his interest for $570 million in the Manchester Grand Hyatt Hotel north of the San Diego Convention Center. Manchester also was the developer on the neighboring Marriott Marquis and Marina, as well as a number of office buildings and the luxury Grand Del Mar Hotel.
Market conditions will dictate the timing of the proposed 28 story, 574,000 square foot signature office tower at Broadway and Pacific Highway. A similarly sized office tower is proposed just to the east in front of the Santa Fe Depot by the waterfront.
The project has a long history of stops and starts and still has many other hurdles to jump before it can ultimately move forward and start construction. The Navy Broadway Complex Coalition environmental group won its demand for new environmental documents but is seeking to litigate other issues.
City voters gave the land to the Navy in 1920 and it became the Navy Supply Center for World War II and the local regional Navy headquarters. Once supply center functions were relocated in the 1980s, Congress authorized the complex’s reuse in 1987 and the city approved the master plan in 1992. But progress stalled as a recession-slowed development.
In addition to the new Pacific Gateway development project, there are also several other significant projects planned for downtown in the next few years. These additional projects will continue to make our beautiful downtown more dynamic and vibrant. Downtown San Diego is already one of the most beautiful, cleanest, safest and special metropolitan centers in the world. When you add the incredible year round weather, there are no other cities in the entire world that can really compare. Because of the great location, excellent year round weather and sophistication of downtown, it continues to draw new businesses, visitors and residents each year. Downtown San Diego is truly one of the most beautiful and vibrant metropolitan centers in the world.
I often have out-of-town buyer clients and guests, who I always take downtown to show them how beautiful it is. They always have positive comments and are very impressed by its charm and beauty. I am very proud of our downtown and am excited about all of the new projects that are planned for it!
Trent St. Louis is a licensed Real Estate Agent
and a member of the National, California and
San Diego Association of Realtors. He can be reached at trent@tns.net or at his office in Hillcrest, The Metropolitan Group. DRE#01273643.
