The Port of San Diego claims it will not renew its lease with the company that manages Coronado Ferry Landing and marketplace because the operator, Port Coronado Associates (PCA), failed to maintain the properties and proposed an unacceptable redevelopment plan.
That explanation was provided in a Nov. 7 letter to PCA and the city of Coronado after community leaders expressed confusion and exasperation at the decision, which was made in secret by port commissioners on Oct. 14.
During a meeting on Nov. 4, Coronado City Council members expressed dissatisfaction and bewilderment. The council voted to question Port District leaders about how they reached their decision and what will happen with the property in the future. They also challenged the agency’s transparency.
“Why was this meeting done in secret in a closed session?” asked Coronado Mayor John Duncan. “… What’s going to happen to our local businesses and the other businesses that can’t get an extension of their lease?”
For 40 years, PCA has managed the ferry landing and over 600,000 square feet of commercial land, tidelands and water area owned by the Port District. The property contains 19 businesses, including Spiro’s Mediterranean Cuisine and Coronado Coffee Company.
Port raises issue with proposal
The letter, sent from the port’s President and CEO Scott Chadwick to Coronado City Manager Tina Friend and obtained by The Coronado News, cited problems with the tenant’s proposal to redevelop the property and “extensive deferred maintenance,” the main reasons for not renewing the lease.
Chadwick also told Friend there’s been no decision made regarding the future of the ferry landing, including whether the port will assume operations or find another management company.
The letter states that if no proposal is received from PCA that is “acceptable given the current state of the site,” possession of the property will revert back to the port.
This decision was made by the Board of Port Commissioners. The seven members are appointed by their respective city councils representing the cities of Chula Vista, Coronado, Imperial Beach, National City, and San Diego, which has three commissioners due to its size, for a four-year term. According to the Port District’s website, the board’s job is to establish policies under which the port staff conducts its daily operations.
Frank Urtasun, Coronado’s appointee on the commission, told The Coronado News he doesn’t know what the port has planned for the ferry landing past the lease, but district staff has been interested in taking a management role with the site for “some time.”
“I have a fundamental problem with bringing that kind of risk onto the port,” Urtasun said. “I just don’t think that’s the role that government should be playing. The Port of San Diego has a 63-year history of public-private partnerships.”
Elected and appointed government officials are prohibited by law from disclosing confidential information from closed session meetings to a person not entitled to receive it, unless the board authorizes the disclosure.
Urtasun also said he doesn’t know why this decision was made in a closed session, but that he’s “very glad that there’s been some sunshine placed on this, and it’s coming to open session.”
Chadwick’s letter states that the commission was within its rights to make this decision in a closed session. It cites the Brown Act, a law that authorizes secret meetings of government bodies under specific circumstances.
“This provision, which has been utilized by the City of Coronado, exists to protect the public’s financial and legal interests by allowing decision-making bodies to negotiate responsibly and confidentially without disclosing sensitive information that could compromise the outcome for the public agency,” the letter says.
Revenue generation
Duncan and other council members questioned whether the commission’s decision was based on a desire to generate more revenue at the ferry landing.
According to Council member Carrie Anne Downey, the Port District had indicated to Port Coronado Associates a decade ago that the site should be producing more revenue. Because of that, she said, PCA played around with the idea of building a hotel at the ferry landing.
“(The Port District) wanted more revenue, and they immediately thought they’d just stick a hotel there, which (the city) vehemently opposed, and the neighbors truly oppose it,” Downey explained.
According to a Sept. 16 meeting back in 2019, the idea of adding hotels in Coronado was firmly rejected by the Board of Port Commissioners when they discussed the Port Master Plan update.
Because the hotel idea was shot down, PCA tried to come up with other prospects. For the past four years, the company has worked on plans for a $20 million redevelopment that would revamp the property.
The project was initially talked about in 2021 and 2022, but PCA did not officially propose the idea until 2023.
That plan was still in its early stages and had not gone through environmental review when port commissioners decided to not renew PCA’s contract, taking the redevelopment proposal off the table.
Maintenance concerns
Chadwick’s letter says “the amount (PCA) propose ($20 million) to invest to improve and modernize the Coronado Ferry Landing, as has been promised to the public, is insufficient after deducting the amount needed to correct the safety and maintenance deficiencies that currently exist on the site.”
The ferry landing is behind on about $17 million in maintenance, according to two different assessments made in February 2024.
The assessments were done by JLL’s ProSite, a commercial real estate and property investment group, in collaboration with the Port District.
Eight buildings at the ferry landing marketplace were evaluated. The one-year assessment showed the buildings to be in “good” shape, but the 10-year summary said the marketplace would need around $12.5 million in backlog maintenance, meaning maintenance just to catch up to what needs to be fixed or replaced, aside from the general upkeep of the property.
The evaluation cited architectural, mechanical and electrical infrastructure that most likely needed to be fully replaced in order to function as originally designed and intended, according to the document.
There was an additional amount of up to $5 million in waterside repairs, meaning servicing of the Coronado ferry and fishing pier, the ferry landing float and the ferry landing marketplace dock.
“This would mean the vast majority of the $20 million PCA proposes to invest into their project would need to be dedicated to extensive deferred maintenance and leave little for new investment at the site,” Chadwick explained.
Christian Herrera, vice president of development and operations at PCA, said the Port District gave no advance indication that it was planning to not renew the lease due to this.
“For nearly a decade, PCA has worked in good faith with port staff,” Herrera said. “Never have they told us that we’re not a tenant in good standing.” He added that, since 2016, his company has been trying to discuss a lease renewal with the Port District.
He also explained his understanding of the assessments, which he says he received from the port.
“Our lease expires in 2026. It shows that the property for the next year, it’s categorized as ‘good,’” Herrera said. “The $12 million number – that is past our lease term. That is not our responsibility … It wouldn’t be our responsibility unless we get the lease extension.”
“That’s the whole point. We’re trying to get a lease extension, deploy $20 million in investment to cure that and bring the buildings (back to life),” Herrera said.
PCA’s lease is scheduled to end June 30, 2026. The company has been talking with the agency for a decade about securing an extension and possible expansion, Herrera told The Coronado News.
“The negotiations were really one-sided,” he added. “There was never a partnership in the negotiation. It was more of a, ‘Give me all the information that I’m asking for,’” he said of the Port District staff.
Herrera said he had no idea where the discussions were going until Oct. 30 when the public agency informed PCA of its decision.
Future of local businesses unclear
The Port District manages 34 miles of the San Diego Bay shoreline, according to the agency’s website. The district does not collect tax dollars, but manages its real estate portfolio to generate revenues that support public services and amenities. The 2025 fiscal year rent received from this property was just under $1.1 million, which is the only revenue the port receives from PCA.
There are 19 shops within the ferry landing marketplace. A written statement from the port said that those businesses “will have opportunities to keep operating.”
It also said that Port District staff will be communicating soon with PCA’s subtenants to discuss future steps.
Because of the sudden decision, businesses subletting from PCA are unsure of what their future holds.
“That’s one of the reasons why I haven’t been able to extend the leases for all of our subtenants who have been asking for many years,” Herrera explained.
One such business owner is Spiro Chaconas, who has owned and operated Spiros Greek Cafe for 28 years.
“We’ve been bugging everybody… (at) the ferry landing to give us a lease for I don’t know how many years and they kept saying, ‘No, we have to get our lease from the port first,’” Chaconas said in a public comment. “… We need at least 10 years in order to know what we’re doing. I mean, we recently remodeled that place and it cost me 500 grand, you know, and it’s a beautiful facility…. It’s a shame to take such a beautiful restaurant away from Coronado.”
That sentiment was echoed by Sharon Cloward, who is the president of San Diego Working Waterfront and represents Port District tenants. She said transparency is essential to maintain stability in the partnership between the port and tenants, and because of the closed-session decision, there are many tenants whose trust in the port is weakening.
“When tenants lose confidence in the stability of their lease, investments and financing slow down as does revenue for the port,” she said.
The Port District board has scheduled a public discussion of the issue at a meeting on Dec. 9, according to a written statement from the port.
