San Diego Business Journal

The status quo has been kept in Barrio Logan, and doing so came at considerable cost for the ship repair industry.

Voters rejected two ballot propositions June 3 that would have changed the waterfront neighborhood which uneasily mixes shipbuilding, ship repair, heavy industry and low-income housing. Propositions B and C amounted to referendums on the San Diego City Council’s September decision to update Barrio Logan’s community plan and zoning, which some viewed the first step toward displacing the shipyards and their subcontractors who serve the Navy. Proposition B related to the plan update, while Proposition C involved zoning changes enacted to carry out the plan. The voters’ collective “no” on both measures voided the City Council’s action.

Major shipyards such as General Dynamics Nassco and BAE Systems made six-figure expenditures to defeat Propositions B and C.

Meanwhile, collectively, opponents of the new Barrio Logan plan spent roughly $1.4 million, said Chris Wahl, president and co-owner of Southwest Strategies LLC, a political consulting firm that worked to undo the council’s work. That figure combined the cost of qualifying a referendum for the ballot and the cost to run a campaign for it.

Businesses spent as they did because “this was a very important issue to industry,” said Derry Pence, CEO of the Port of San Diego Ship Repair Association.

The Environmental Health Coalition pushed for the council-approved plan, saying it would make conditions better for neighborhood residents — including children — by separating them from toxic, dangerous or polluting industrial sites. In retrospect, the coalition said that industry ran a deceptive campaign against Propositions B and C.

Industry representatives who opposed the plan said they were saving jobs. As for pollution, they countered that proposed high-density housing near Interstate 5, which would have been allowed under the new plan, would have exposed more people to car and truck emissions.

Industry Outspent B and C Backers

Campaign filings show the committee opposed to Propositions B and C received contributions of $918,000 between Jan. 1 and May 17. General Dynamics Nassco (NYSE: GD) contributed $457,000 during that period. BAE Systems contributed $150,000, and Virginia-based Huntington Ingalls Industries Inc. (NYSE: HII) — parent company of Continental Maritime of San Diego — contributed $100,000 during the period.

The San Diego Regional Chamber of Commerce Political Action Committee contributed $20,000 to the effort, and the Port of San Diego Ship Repair Association contributed $25,000. Two recycling companies gave tens of thousands of dollars each, while port tenants also chipped in: $10,000 from Pasha Automotive Services and $5,000 from Harborside Refrigerated Services.

Businesses were concerned about one provision of the plan that would have limited the growth of shipyard suppliers who — according to industry sources — need to be physically close to yards.

Proponents of Propositions B and C amassed $44,000 by May 17 to defend the City Council’s actions, according to campaign statements.

That figure excludes PowerPAC of San Francisco, which gave $15,000 on May 19 and $5,000 late in the month. The political action committee is involved in progressive causes and seeks to help underrepresented communities, according to its Web and social media sites.

Lawrence Hess of the Lehbros Ltd. real estate firm in San Diego gave $12,000 to the campaign to pass Propositions B and C. Frank Carrillo, CEO of the Simnsa health plan, contributed $12,500. Mel Katz, co-owner of Manpower San Diego, contributed $10,000. The International Brotherhood of Electrical Workers Local 569 Candidate Political Action Committee gave $1,000.

The campaign of Toni Atkins, now state Assembly speaker, contributed $10,000, while the campaign of City Council President Todd Gloria contributed $5,000 and the campaign of Assemblywoman Lorena Gonzalez contributed $2,500.

Unofficial election results released at 3 a.m. June 4 showed 58.5 percent of voters saying no on Proposition B and 60.5 percent of voters saying no on Proposition C, with a simple majority required either way. At the time there were roughly 129,000 ballots counted, with about 98,000 absentee and provisional ballots yet to be tallied.

Finding a ‘Path Forward’

Partisans on both sides talked about returning to the drawing board to remake the neighborhood, whose current plan was adopted in 1978.

Mayor Kevin Faulconer may have a role in what happens next. A spokesman said Faulconer is “committed to getting a new community plan approved for Barrio Logan that protects neighborhood residents as well as the shipyard jobs that are critical to San Diego’s economy. He plans to reach out to key stakeholders to create a path forward.”

With industry next door to modest houses, Barrio Logan is a patchwork of uses. Complicating matters is geography and the prospect of gentrification; the neighborhood is within reasonable walking distance of East Village, which is transforming from a depressed industrial neighborhood into a trendy urban spot.

San Diego Regional Chamber of Commerce CEO Jerry Sanders, in a prepared statement, echoed Faulconer’s goal of finding a balance between the neighborhood’s divergent interests, while also celebrating the June 3 ballot result.

“The defeat of Propositions B and C are a major victory for the Barrio Logan community, the future of San Diego’s shipyards and the protection of good, middle class jobs,” Sanders said.