$2.7B T1 Project Will Transform SAN

With a price tag of nearly $2.7 billion, construction of a new Terminal 1 at San Diego International Airport is by far the biggest ongoing construction project in San Diego County.

The new terminal, expected to take until 2028 to finish, will transform the traveling experience at SAN – offering redesigned roadways leading in and out of the airport and more gates for planes to a new parking garage, and far more food and beverage concessions.

The only other projects that come close in size and cost is the nearly $1.4 billion Gaylord Pacific Hotel and Convention Center in Chula Vista and the $1.6 billion Research and Development District (RaDD) under construction by IQHQ on the downtown San Diego waterfront.

Construction of Terminal 1 – or T1 as it’s come to be called – began in November 2021 and is on schedule and on budget, said Vice President & Chief Development Officer Angela Shafer-Payne.

Built in a joint venture by Turner Construction and Flatiron Construction, the first phase of the project that includes 19 new gates, an on-airport roadway and concession spaces for shopping and food and beverage outlets is expected to finish in late summer 2025.

As part of that, a new five-story parking plaza is planned to open in late 2024 that will have 5,200 parking spaces with at least 10% of the spaces earmarked for electric vehicles with charging stations.

Roadway improvements will include a separate roadway at the point where Laurel Street meets Harbor Drive for arriving airport traffic that will run parallel to Harbor Drive, taking all arriving airport traffic off Harbor Drive. About 45,000 cars a day will be removed from Harbor Drive as a result of the new roadway.

Scheduled to open in early 2028, the final phase of the project will include demolition of the old Terminal 1, and the addition of 11 new gates, and additional food and beverage concessions.

In a rarity for airports, the new T1 also will have an outdoor dining terrace that will overlook part of the runway apron.

“There are only a couple of airports that have outdoor seating,” Shafer-Payne said.

As the “gateway to the region,” Shafer-Payne said that building a new Terminal 1 was essential. The original Terminal 1 was built as a single-story structure before airports even used jet bridges for passengers to get on and off planes, Shafer-Payne added. At the time, the airport served about 2.5 million travelers. By 2019, that figure had ballooned to 11 million, she said.

“We were unable to provide adequate concessions because of the space. The restrooms were woefully inadequate – everything that travelers could see from the baggage handling area being so small to the back of the house that the travelers didn’t see. Our airlines had to go through some contortions to make that facility work,” Shafer Payne said. “It was just a facility that no longer served the needs of the passengers.”

Although not part of the T1 project, the San Diego County Regional Airport Authority that oversees the airport also is wrapping up construction of a $107.5 million new administration building.

Built by Sundt Construction, Inc. at 2417 McCain Road, the 135,400-square-foot office building is scheduled to open in October.

Still in its early stages, construction of the Gaylord Pacific Resort and Convention Center in a partnership of RIDA Chula Vista with the Port of San Diego and the City of Chula Vista is proceeding as planned, said Robert Betz, executive vice president of McCarthy Building Companies, Inc. McCarthy Building is the general contractor.

“We have fully mobilized to the site and we have just started pouring the concrete for the superstructure of the project,” Betz said.  “The job’s going really well.”

Scheduled for completion in August 2025, the project under construction between H and G streets west of Marina Parkway includes a 1,600-room hotel,  a 275,000-square-foot convention center, more than 200 acres of associated public infrastructure and two parks on Chula Vista’s bayfront.

“We’ve got a way to go. We’re still at the very beginning stages,” Betz said.

The project has been planned for more than a decade and is expected to be a catalyst for additional development in Chula Vista.

Downtown Projects

Equally transformative, IQHQ’s $1.6 billion Research and Development District is on schedule for completion in the spring of 2024.

Geared toward attracting life science companies to downtown San Diego, the 1.7-million-square-foot RaDD is designed to have five buildings of lab, office and retail space along six blocks of Harbor Drive covering more than 10 acres. It will include a 1.5-acre park at the corner of Broadway and North Harbor Drive.

Also targeting life science companies is the redeveloped Horton Plaza, renamed Campus at Horton by the developer, Stockdale Capital Partners.

The core and shell of the $750 million project is expected to be finished by the second quarter of this year, according to Leo Divinsky, managing director of Stockdale Capital Partners.

Although no leases have been signed yet for the 1-million-square-foot redeveloped mall, Divinsky said that tenant improvements will begin in the second quarter with delivery anticipated by the end of the year.

Other downtown projects of note include The Lindley, a $250 million apartment tower at the edge of Little Italy – the first San Diego apartment tower to be developed by Toll Brothers Apartment Living with Swinerton as the general contractor; The Radian, a $110 million project by Cisetera Development with Swinerton as the general contractor for the 241 apartment portion of the project that also includes downtown’s first Target store; and East Village Green, a nearly $60.7 million project by Barnhart-Reese Construction, Inc.

The Lindley is in the early stages of construction, with completion expected ahead of schedule in late 2024, said Mike Berryhill, San Diego vice president and division manager of Swinerton.

“We’ll be pouring concrete for the next 12 months,” Berryhill said. “That thing is 36 stories. We’ve got a lot of decks to pour.”

The apartment portion of the Radian is on target for completion in the summer, Berryhill said. “We are doing our final finishes, interior finishes and even starting a punch list.”

The work includes restoration of about 400 linear feet of the historic Farkas Store Fixtures building, which was incorporated into the project.

East Village Green would be downtown’s largest park, covering 4.1 acres and would include a 13,657-square-foot community center, an underground parking garage, a children’s playground, an outdoor stage, dog parks, a water fountain and a games area.

The park site is bounded by 13th, F, 14th and G streets and includes a 20,000-square-foot parcel at the northeast corner of 14th and G streets.

Originally targeted for completion in early 2025, the schedule has slipped a bit and is more likely to be done in August 2025, said Doug Barnhart, chairman of Barnhart-Reese Construction.

Two hospital projects that are among the county’s biggest construction projects are nearing completion – a $664 million hospital tower on Scripps Memorial Hospital campus on Genesee Avenue and Kaiser Permanente’s $403 million San Marcos Medical Center adjacent to Kaiser’s medical office campus.

The new Scripps hospital tower in La Jolla mirrors the adjacent $456 million Prebys Cardiovascular Institute that Scripps Health opened in February 2015.

The seven-story new tower is about 60% finished, with completion targeted for late 2024, said Betz of McCarthy Building Companies, the general contractor.

“The tower is up, the exterior is closed, we’re working on building out the floors now,” Betz said.

The 433,000-square-foot brick-and-glass tower will include 108 private medical beds across three floors, 12 medical/surgical observation bays, nine operating rooms, 61 flexible pre-operating and post-operating/post-anesthetic rooms, three interventional radiation suites and MRI/CT and radiology  imaging suites.

The new tower also will have a 92,464-square-foot women’s center.

Kaiser Permanente’s seven-story San Marcos Medical Center will have 206 beds, eight operating rooms, an emergency room, a intensive care unit, a neo-natal intensive care unit and a maternity care section.

The new hospital is on track for completion in the fall of this year, said Scott Sass, San Diego Business Unit Leader of DPR Construction, the general contractor.

Designed to earn LEED Gold certification, the new hospital includes energy efficient electrical, air, and plumbing and uses reclaimed water for landscaping and water towers, Sass said.

Temporary Slowdown

Rising interest rates and the soaring cost of construction materials, and a shortage of skilled workers have slowed development of any new large projects.

“I think for the next six months it’s going to be tough to get a new project started that doesn’t have financing,” said Berryhill of Swinerton. “If they’re just going to market now, it would be difficult.”

Berryhill said Swinerton is “still very busy. …The one thing to watch is new construction starts,” he added.

Sass of DPR Construction said his company has “a strong economic outlook but the real pressure on construction in 2023, as was in 2022, is continuing to address the skilled work force shortage (and) managing the available labor force while also working to stay ahead of volatility in commodities markets that affect procurement.”

“In terms of new work opportunities, the life sciences market remains robust, though we have seen customers pause on certain concepts and business plans to be more conservative in their capital spend,” Sass said.

Barnhart said that a number of new projects had been planned, “but in the current national economy, a lot of those aren’t rolling out.” Exceptions include health care projects and government projects, Barnhart added.

“Health care has always been pretty strong and consistent,” Barnhart said. “Our health care providers in San Diego are upgrading and looking to improve the health care they give.”

Barnhart is optimistic that the slowdown in the construction market is temporary.

“I think it’s going to be slow for the second quarter and then, third and fourth quarter once things settle down with the lending market, then it’s going to come roaring back,” Barnhart said.