U.S. Navy to Vacate 3.4-Acre Waterfront Site in San Diego

By The Registry Staff

In a groundbreaking agreement that has been 38 years in the making, the Port of San Diego and the United States Navy have reached a historic deal to reshape the city’s waterfront. This transformative agreement will see the federal government vacate a coveted 3.4-acre waterfront site at 1220 Pacific Highway, marking the end of a century-long lease held by the Navy. In return, the Navy will receive $5.75 million in products and services, opening the door for the redevelopment of this real estate, according to a report from the San Diego Union Tribune. 

The termination of the Navy’s 100-year lease on the property signals a new era for San Diego’s harbor. Currently occupied by approximately 93,000 square feet of office space, this location has immense potential for redevelopment, including hotels and public amenities. Surrounded by public attractions and hotels, the site’s revitalization aligns with the City’s vision for more public access, recreational opportunities and revenue generation for waterfront reinvestment.

Under the terms of the agreement, the Navy’s lease will conclude after a 60-day due diligence period, after which the federal government will receive a short-term permit for continued use of the property. This permit grants the Navy up to four years to vacate the premises. 

The roots of this agreement trace back to Section 836 of the Military Construction Authorization Act of Fiscal Year 1985. However, progress on the land exchange has faced challenges in the past due to the costly requirement of the port providing replacement facilities at no cost to the government.

With the Navy’s leasehold coming to an end, the 3.4-acre waterfront site is primed for redevelopment. The Port of San Diego has ambitious plans, including additional park space, hotels and retail establishments. The forthcoming Port Master Plan Update, expected to receive approval later this year, incorporates provisions for the construction of 750 additional hotel rooms in the North Embarcadero area, along with expanded park space along North Harbor Drive.

The Lane Field San Diego Developers hold the distinction of being the first to submit a redevelopment proposal for this coveted site. This development team, renowned for their work on adjacent hotels at Broadway and Pacific Highway, enjoys a contractual first right to present a project for the entire property, according to the report. 

The agreement between the Port of San Diego and the Navy marks a momentous milestone in the transformation of this waterfront site. It sets the stage for the creation of new hotels, public amenities, and increased public access, ushering in a brighter future for San Diego’s iconic harborfront. This deal not only signifies the end of an era but also points to a new chapter in the city’s ongoing development.