March 21–Tensions are heating up over plans to build a major hotel complex on a key bayfront site where San Diego Mayor Kevin Faulconer is pushing instead for an expansion of the city's convention center.
In a strongly worded letter sent last week to Faulconer, an attorney for the hotel developer advised the mayor to back off from his lobbying efforts to advance an expansion project, asserting that he is undermining plans for the $300 million hotel development, known as Fifth Avenue Landing.
"The purpose of this letter is to advise you that your conduct and the conduct of the City and SDCCC (San Diego Convention Center Corp.) are interfering with (Fifth Avenue Landing's) contractual rights and obligations, which FAL is undertaking at significant expense, and to demand that you, the City and SDCCC cease and desist in any representations or plans to finance or construct a convention center expansion on FAL's leased premises," wrote attorney Vince Bartolotta, who is representing Fifth Avenue Landing.
Hotel planned for convention center expansion site
At issue are plans by developer Robert Green and longtime Port of San Diego tenants Ray Carpenter and Art Engel to develop a hotel complex on a five-acre leasehold they control on the bay side of the convention center. That land also happens to be where Faulconer and tourism and business leaders want to expand the center in hopes of holding on to the larger meetings and conventions like Comic-Con that have outgrown the facility, as well as attract still others.
In addition to an 830-room, four-star hotel rising 44 stories, the project calls for two acres of public plazas, open-air cafes along the bayfront promenade, an expansive rooftop garden plaza and a second hotel catering to budget-minded guests.
Early last year, San Diego port commissioners, who oversee bayfront land, gave the development team the go-ahead to begin processing its plans, including working with the port on an extensive environment review. That initial report has been completed, but formal approval of the project is still needed from the port before the development could move forward.
Carpenter's and Engel's lease, which is not due to expire until 2024, requires that they develop a hotel of at least 400 rooms comparable in quality to other bayfront properties. The condition kicks in once hotel market conditions return to pre-recession levels, which already has occurred.
Up until almost two years ago, the Convention Center Corp. had control over the land, but opted to back out of a deal it consummated in 2010 to acquire the leasehold at a cost of $13.5 million as part of its plans to enlarge the convention center. But the expansion project fell apart after a judge ruled in 2014 that the plan to finance it with a hotelier-approved room tax hike was unconstitutional.
More recently, Faulconer has proposed a 2018 ballot measure to increase the city's hotel tax to help fund not only a waterfront convention center expansion and road repairs but also address homelessness. He and other expansion supporters were buoyed by a court victory in January when a judge rejected a legal challenge of the Coastal Commission's approval a few years ago of a center expansion on the waterfront.
"The fact that the city is moving forward with this project should not come as a surprise to anyone," said Faulconer Deputy Chief of Staff Matt Awbrey. "When the city declined to pursue the option in 2015, there was litigation against the convention center expansion. But as it stands today, the expansion plan has been approved by the City Council, Port Commission, Coastal Commission, and the last remaining court case standing in the way of moving forward has been ruled in the city's favor.
"Mayor Faulconer has been very clear that once the city prevailed in the lawsuit against the expansion plan that he would take the final step by asking the citizens of San Diego to approve funding for the project, and that's exactly what he is doing. Also, the fact is that the Port, not one of its short-term leaseholders, will be the decision maker regarding this property."
A representative from Faulconer's office is scheduled Wednesday to present the convention center board with an update on the city's expansion planning efforts.
In his letter to Faulconer, Bartolotta said it was his understanding that the mayor recently met with each of the port commissioners to talk about favoring the convention center expansion of the hotel project.
Further, he said Faulconer had recently met with The Robert Green Co. to consider downsizing its project to a single tower on a 35,000-square-foot parcel that represents just a small portion of the site.
Such an alternative is not feasible for a number of reasons, said Bartolotto, most notably because the parcel is too small and the smaller project would not likely pass muster with the port or the Coastal Commission because of issues related to public access, protection of public views, parking and the need to provide low cost lodging.
"I am copying the Port CEO and Port Attorney to ensure that they are aware that (Fifth Avenue Landing) intends to continue to comply with its contractual obligations and that FAL does not consent to the City's current course of conduct and is confident that the Port will also honor its contractual obligations to FAL."
Port Commissioner Bob Nelson said Tuesday that he has spoken with Faulconer about a number of issues, including the expansion of the convention center but pointed out that there is no convention center expansion project currently before the port.
"The Fifth Avenue Landing hotel is moving forward pursuant to an agreement we acknowledged and will strictly follow," Nelson said. "In fact, Fifth Avenue Landing has a property interest because they hold the lease and we have obligations under that agreement.
"I've heard from the mayor he'd very much like to have the contiguous convention center expansion approved; however, no one has committed any funding, and no one has submitted anything to us saying here's what we would like to do. Sometimes things are just messy but our hands are bound by both the statutes and the deals made by our predecessors and we are going to honor those commitments."
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Twitter: @loriweisberg
