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Friday, Feb 3, 2023

Developers to Break Ground on $500M Mixed-Use Project at Brown Field

A local development group anticipates breaking ground on more than $500 million in mixed-use projects at the historic but underutilized Brown Field Municipal Airport in Otay Mesa within three years.

Brown Field International Business Park LLC recently entered into exclusive negotiations with the city of San Diego to build both aviation-related and non-aviation-related businesses on 369 acres of the 880-acre airport. The Carlsbad-based developer is currently conducting negotiations with the city and preparing to start the Environmental Impact Report and entitlements.

The development team includes Distinctive Projects Co. Inc. of Carlsbad, which developed Premier Jet at McClellan-Palomar Airport in Carlsbad, and Ross Aviation based in Colorado.

During the next 20 years, Brown Field International Business Park hopes to transform the airport by developing or redeveloping more than 40 percent of its total acreage.

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“We want to bring high quality to Brown Field because we see great growth in that area,” said Richard Lee Sax, president of Brown Field International Business Park. “Brown Field right now does not speak highly of the community’s growth potential. It is an old, outdated and old-fashioned airport.”

But that is about to change. The city has already terminated leases of numerous non-aviation tenants at the site and is in the process of evicting 17, according to Christian Anderson, supervising property agent for the city’s Real Estate Assets Department, Airport Division. Most of the businesses are salvage yards.

Anderson said the city hopes to increase aviation uses to meet additional aviation demand in the county.

Anderson said the Federal Aviation Administration’s forecast for aviation demand calls for greater development at Brown Field.

Currently 75 percent of rental revenues at Brown Field come from non-aviation uses, said Anderson.

“We want to flip that around with this development,” said Anderson.

Brown Field International Business Park’s plans include development of a primary aviation business center, small aircraft storage and maintenance facilities, helicopter operations, aircraft parking, solar power-generating farm, industrial park, airport hotel and conference center, museum space, commercial space and retail space. The developer has already spent $1 million on the project.

Selection Process

The city received six requests for qualification submittals to develop Brown Field in February 2007, including a comprehensive plan from Brown Field International Business Park, formerly doing business as DPC Brown Field with Sax.

After months of meetings in front of the city’s Airports Division and Land Use and Housing Committee, Brown Field International Business Park was selected to help turn this city asset into a rent-generating and attractive airport.

Anderson estimated rents lost during development would be made up in seven years and greatly exceeds the $2 million it now generates annually.

Total gross revenue projected for the development project is $11 million in the first five years and $619 million during 20 years, according to Brown Field International Business Park.

Sax said he and his team are attracted to Brown Field because of its size, proximity to the border and significant growth in the South Bay.

“An outdated airport can retard the growth of an area,” Sax said. “We think a modernized facility will attract new traffic and businesses.”

He said there is a symbiotic relationship between the airport and the surrounding community.

“As the business community grows the airport will grow and as the airport improves in quality it will attract higher quality businesses, which means higher quality and paying jobs,” said Sax. “We think this airport will be a magnet for businesses.”

Sax anticipates bringing the concept of condominiumization to Brown Field. Condominiumization is the process of bringing ownership to a traditionally rented community or real estate type. He anticipates setting up long-term leases to attract businesses willing to invest in the success of Brown Field.

“Traditionally at airports if you own a business or have a hangar, you rent them at fairly short terms and you are at the mercy of a landlord,” said Sax. “We don’t believe that is the way to go. We think it is far better for aviation and business tenants to be able to secure long-term leases so they can invest more capital into their businesses and have the certainty of knowing where they are going to be.”

Already several tenants have expressed interest in purchasing long-term lease agreements at Brown Field.

The San Diego Air & Space Museum may soon call Brown Field home, according to the city’s Real Estate Assets Department, Airport Division.

Negotiations Continue

Sax estimates negotiations with the city will continue during the next six months. Environmental, entitlement and development work is estimated to last two years with ground breaking two to three years out after final plan approval by the City Council.

Included in phase one will also be construction of an office for Brown Field International Business Park LLC and construction of a 10-megawatt solar power field.

Sax has already pulled together an experienced development team with strong San Diego ties. The team includes San Diego-based H2A Architects and Pacific Medical Buildings and San Marcos-based Richard & Richard Construction Co. Inc. This also includes Wayne Rosenbaum with the San Diego office of Foley & Lardner LLP and Brown and Caldwell and Ross Aviation with local offices in the county.


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