Changes recommended by the California Coastal Commission regarding the redevelopment of the former Naval Training Center may be too much for the city of San Diego to bear.
In a 7-2 vote, the commission approved the city’s blueprint for the 361-acre redevelopment project in Point Loma. But the approval came with some modifications, one of which, according to the deputy director on the project, is not financially acceptable for the city.
The Coastal Commission wants the city to retain ownership of four historic buildings on the property that the city planned to turn over to the project’s developer, National City-based Corky McMillin Cos. McMillin was to take ownership of the houses and planned to sell them for about $3.2 million.
“It was never planned for us to keep and maintain the houses, so it was not something we budgeted for,” said Marcela Escobar-Eck, the city’s deputy director for the project. “I don’t think the City Council will accept this because it has a great fiscal impact on the business transaction.”
Escobar-Eck said the impact is more vital for McMillin because the company anticipated getting some $2 million to $3.2 million in revenue for the project.
Megan Conley, McMillin’s director of communications, said the company has not determined the ramifications of possibly losing revenue expected from the sale of the houses. Conley said the company is waiting to receive the final language from the Coastal Commission regarding the changes and will analyze the modifications then.
The city would not only lose tax increment dollars under the commission’s plan, but the general fund would also be affected if the city has to maintain the property.
To meet the commission’s demands, the city would have to renegotiate agreements with McMillin and the Navy, Escobar-Eck said.
The commission’s recommendation will have to be approved by the City Council and resubmitted before construction could begin. The item is expected to go before the City Council by July 2, and resubmitted to the Coastal Commission by the end of July.
According to Maureen Ostrye, the city’s project manager, the process could delay construction by about six weeks.
Ostrye said the financial impact of the delay is not known, but said it does affect the bottom line.
“Anytime there is a delay in the schedule, there is less money coming in for the project and still money is being spent on it,” she said.
Other modifications required by the commission included the change in height on one of the buildings in the planned research and development area to 60 feet.
The commission also required the meeting facility, an existing chapel on the site, must be reserved for public and community use 50 percent of the time, as opposed to being used only by the planned hotel.
Another modification will require the city to reserve the majority of the Visitor and Community Emphasis Overlay portion of the site for visitor and community use, instead of office and commercial use.
Those modifications are expected to go over easy with the City Council, according to city staff members.
“The meeting turned out pretty good, because we could live with other modifications,” Ostrye said.
The redevelopment plan of the former base calls for a 52-building historical district, 37 acres of residential use, including 350 houses, 22 acres of educational facilities, 22 acres for offices, 46 acres of park space, two hotels and a public golf course, among other amenities.
It is expected the project, which could be worth $500 million, will be completed in 10 years.
