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Federal Judge Rules in Favor of Downtown Waterfront Project

A ruling in favor of developer Douglas Manchester’s effort to build a mixed-use waterfront park on downtown Navy land has dealt a blow to the California Coastal Commission’s authority to regulate this project and other private developments built on federal property, according to Manchester’s attorney.

A federal judge ruled April 30 that the Coastal Commission can’t require Manchester to seek a coastal development permit for the 15-acre Navy Broadway Complex, which is adjacent to Seaport Village.

Manchester hailed the decision, which he said removed an important legal hurdle to the project. His attorney says the implications are further reaching than that.

“It impacts the entire coastline , every single project that the Coastal Commission is reviewing on land that’s owned by the federal government,” said Steve Strauss, a partner at Cooley Godward Kronish’s San Diego law office and legal counsel for Manchester. “This is a big deal for Coastal. This has a huge impact on them, and no one has challenged their jurisdiction in the tidelands before.”

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The $1.2 billion Navy Broadway Complex project is part of the North Embarcadero Visionary Plan. The master plan calls for 3 million square feet of office, hotel and museum space, including a 17-story Navy headquarters.

The Manchester Group was awarded the 99-year lease by the Navy in 2006 to develop the project, which has languished since it was first approved by regulators, including the Coastal Commission, in 1991.


Lawsuits Filed

The project’s rebirth sprouted several environmental lawsuits, including challenges on whether the original plans approved in 1991 by state regulators must be re-approved, and whether the state Coastal Commission can require the developer to apply for a state permit for coastal land use.

Manchester filed suit against the state Coastal Commission for declaratory relief in June 2007, saying the Commission cannot regulate the project because it’s on Navy land, and the project itself is the product of federal legislation.

With the ruling, Judge Jeffrey Miller agreed.

“This ruling held that property that’s in the tidelands, normally subject to Coastal Commission jurisdiction and permitting, is (exempt) if it’s owned by the federal government even if there is private development on the federal site,” Strauss said.

Thomas Jefferson School of Law professor Arnold Rosenberg agrees.

“It’s a federal district court decision, which has limited precedential value, but it’s certainly an arrow in the quiver of developers working with the federal government on mixed-use projects on federal property,” he said.

Rosenberg says that the federal Coastal Zone Management Act gives the federal government authority to determine what to do with federal land , including establishing a private developer as an agent of the federal government.

“Even though the federal government is delegating some part of the decision making to a private developer,” he said, “the discretion is solely with the federal government.”

The Coastal Commission argued that since the project is not solely for federal use, the state should be granted some jurisdiction, which the court rejected.

“This is a significant decision,” Rosenberg said.


Appeal On Hold

Coastal Commission spokesman Chris Pederson says the commission has not decided whether to appeal. The state agency will likely wait until it determines whether to press ahead with a separate “supplemental consistency review” to determine if the project’s impacts have changed since 1991.

“We are planning to hold a hearing in August for the commission to evaluate whether the changes in the plan that have occurred are sufficient to conduct a consistency review,” he said.

Manchester argues that the project hasn’t changed since 1991 and therefore the reviews are still current.

“Everyone focuses that the passage of time has been 15 or 16 years. Passage of time is not a basis to require a new environmental review,” Strauss said. “The basis is some substantial change that was not anticipated at the time. In 1991, they tried to analyze all potential environmental impacts: the view, the traffic and seismic.”

Downtown San Diego is in fact less populated today than was projected from 1991, he said.

Hearings on two other lawsuits on the matter are scheduled before a federal judge in August and before a state judge in October.

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