When the Manchester Financial Group was awarded the plum of redeveloping the Navy Broadway Complex into a mixed-use waterfront attraction 10 months ago, one question persisted — would the $1.2 billion project be devoted more to commerce or the common good?

Now, the new year is under way, and the debate is heating up. One local watchdog group, the Center on Policy Initiatives, is calling for a full financial accounting before ground is broken.

Questioning the premise that the project will generate transient occupancy taxes for the city, CPI contends that there are no guarantees of that, especially if the expected new rooms turn out to be condotels — a sort of time-share variation. Instead, based on CPI’s number crunching, it claims that the project could end up costing the city up to $1.2 million more than it generates in general fund revenues each year.

“We need to do due diligence,” said Murtaza Baxamusa, CPI’s director of research and policy. “We cannot leave it to chance. $1.2 million might seem like a drop in the bucket, but it’s significant.”

Nancy Graham, president and chief operating officer of Centre City Development Corp., which oversees downtown redevelopment for the city, is baffled by that argument.

“The city gets nothing from the site now,” she said. “They should and will be getting revenue from the development there. I can’t see how it will cost the city more than it will receive.”

Graham pointed out that the site is limited to certain uses, including offices and hotels, which, she said, will be needed to accommodate the city’s many conventions.

“The question will be, how many hotels there will be, and what the timetable will be along the waterfront,” said Graham. “The marketplace will take care of that.”

As for a new fiscal analysis of the project, Graham said that CCDC is focused on design and whether or not plans meet the criteria of the 1992 development agreement between the city and the Navy.

“We don’t get into the financial analysis, and neither does the city,” she said.

Anchors Awry

Meanwhile, another local watchdog group, the San Diego Navy Broadway Complex Coalition, on Jan. 4 filed suit in district court against the U.S. Department of Defense, the Navy and the Manchester Pacific Gateway LLCcontending that the Navy failed to adequately address the environmental impact of the project.

The 15-acre site, at Broadway and North Harbor Drive, will include a new Navy headquarters, followed by Class A commercial and retail space, hotels, public attractions, parking and 5-plus acres of open space.