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Tuesday, Mar 19, 2024
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City Bond Sale Hits Delay

The city of San Diego is putting a hold on $15 million in private-placement bonds due to go on sale next week for the first phase of a waterfront park located at the $850 million Liberty Station mixed-use project now under way in Point Loma.

The hold was prompted by news last week that mold had been discovered in more than 30 residential units in the development.

“We believe it was caused by record levels of rain,” said Greg Block, a spokesman for San Diego-based Corky McMillin Cos., which is collaborating with the city’s redevelopment agency on the project, located on the site of the former San Diego Naval Training Center. “We are remediating the problem, and all the homeowners are happy with what we are doing.”

In the meantime, he said, some of the homeowners were transferred to nearby hotels, which Block said, “is not something most builders do.”

Elizabeth Kelly, financing services manager for the city treasurer’s finance services division, said that her office, along with the city attorney’s office and redevelopment agency, will be looking into the matter.

“We’re working with McMillin to understand what they need to do to investigate the extent of the problem, and what they’re doing for remediation,” she said. “Once we have more information, the placement agent can better inform prospective investors on the issue, and when the bond sale can move forward.”

The San Diego City Council, which authorized the bond sale May 24, also voted to change the original NTC agreement, now requiring McMillin to finish the project by 2008, building Liberty Station in two, rather than three, phases.

Walter Heiberg, senior vice president of McMillin Land Development, said that it was still too soon to say whether the hold on the bonds would delay the project.

“We hope it won’t impact the park, but it’s a little too early to tell,” he said. “We’re doing everything we can to get this remediated so there won’t be a delay.”

Pat Broderick

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