Developers in Talks With AEG, Hotel Operators as Part of $2.5 Billion Project
Developers are revising plans to turn the current site of downtown San Diego's Seaport Village into a new $2.5 billion hospitality and entertainment district and are in discussions with venue operators including AEG to possibly operate a live-performance space.
Members of the Seaport San Diego development team said the project on a 70-acre waterfront site is now envisioned as a hotel-centric development where more than three-quarters of the development site would be open to the general public at all times, at an Oct. 8 downtown forum presented by the San Diego chapter of the Urban Land Institute, which deals with land-use matters.
Elements still await final approval from local and state officials and construction won't begin until at least 2023, but developers are also looking to build hotels, retail, an observation tower, aquarium, public promenades and beaches as part of the plan to revitalize the waterfront and the aging Seaport Village, a complex of stores and restaurants that has been a downtown fixture since 1980.
A live performance venue, along the lines of spaces now operating in new projects like the Wharf District in Washington, D.C., is among entertainment elements being considered. San Diego's Protea Waterfront Development is in early talks with operators such as AEG – which operates larger venues in cities including Los Angeles, Nashville and Denver – to operate a live open-air venue possibly seating up to 4,000 and serving as a gateway element to the waterfront area.
"We're seeing these [entertainment spaces] pop up across the country as catalysts for areas," said Marin Gertler, design director at Gensler, which is part of the Seaport San Diego planning team.
Protea Waterfront Development – led by local developers Yehudi Gaffen, Jeffrey Essakow and Jeff Jacobs – was chosen in 2016 by the Unified Port of San Diego to proceed with general plans to replace waterfront elements that now include the Seaport Village.
Gaffen, chief executive of local project consulting firm Gafcon Inc. as well as Protea, said project elements needed to be reconfigured in late 2018, after an earthquake fault, utility lines and some Navy infrastructure-related cables were found underneath the project site. Some portions of the project previously geared to buildings will instead house open-space and water elements.
Partly due to reconfiguration of plans, which delayed the original timetable, the estimated cost of the privately financed project has been revised from its original $1.3 billion and is now likely to involve up to $2.5 billion in costs.
Protea recently tapped Cushman & Wakefield to provide capital advisory services after reviewing proposals from a total of eight candidate firms.
"All eight looked at our project, looked at the numbers and feel this is eminently financible," Gaffen said.
Gaffen said the project overall remains hospitality focused, with hotels expected to account for 40% of both capital development costs and future net operating income. Talks are in progress with various hotel operators to build budget-minded accommodations, fulfilling a longtime goal of local and state officials to provide cheaper hotels on the waterfront.
"What we're trying to do is provide types of accommodations that are not available downtown," Gaffen said. "I think today to find rooms at under $300 [per night] is very challenging downtown."
Developers are looking to include hostel-type rooms, which could provide beds at around $50 per night, and "micro" rooms going for around $150.
A hotel is now also expected to be incorporated into the base of the project's planned 500-foot observation tower. Gaffen said other tower elements in early concept stages include an "infinity mirror" giving visitors the feeling of walking on air, hammock-like nets in which people could lounge high above the waterfront, and simulators showing the insides of clouds and how thunder and lightning form within them.
Developers are finalizing plans with the Scripps Institute of Oceanography at University of California San Diego to operate an aquarium and adjoining marine-related educational facilities. Also planned is a "blue tech" education center, to provide training in ocean-related career fields in conjunction with local public schools and universities.
Developers are looking to retain elements of the waterfront's current commercial fishing infrastructure, as part of efforts to retain authentic, pedestrian friendly experiences along the lines of Seattle's Pike Place Market.
"It will be smelly and messy at the fish market, and it will be gussied up and cleaner and tidier in a hotel lobby, and there are all these experiences in between," said Vaughan Davies, principal in Perkins Eastman Architects, which was hired by Protea after previously designing projects including the Wharf District in D.C.
Gaffen said the final version of current plans are expected to be submitted to port officials by this December or January next year. Environmental reviews by government agencies would take place next year, with construction to begin by late 2023 or early 2024 and take about five years to complete.
Article by: CoStar | October 09, 2019
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