Port Coronado Associates, the management company of the Coronado Ferry Landing, has a one-year window to prove it can satisfy the Port of San Diego’s preconditions before securing a 35-year lease.
This means the current subtenants at the ferry landing’s marketplace will have a safe spot for at least the next 12 months while the management company (PCA) works on fulfilling the preconditions.
The Port of San Diego board voted unanimously on June 23 for the option to renew the lease in a year, potentially ending a months-long dispute. Board members praised Coronado appointee Port Commissioner Frank Urtasun for facilitating the agreement between the district and PCA.
The Coronado Ferry Landing is made up of over 600,000 square feet of commercial land, tidelands and water area owned by the port district. The property contains 24 businesses, including Spiro’s Mediterranean Cuisine and Coronado Coffee Company.
Prior to the June 23 vote, multiple meetings occurred between the port and PCA to negotiate a new agreement before the current lease ceases at the end of this month.
Last October, port board commissioners announced it wouldn’t renew the lease and claimed PCA let the property fall into “extensive deferred maintenance” and submitted an insufficient redevelopment plan. According to property assessments, the site faced roughly $17 million in backlogged upkeep – $12.5 million for the marketplace buildings and $5 million for the docks and pier.
This center should’ve never gotten to the condition that it did … (Now) we’re going in the right direction, and this is the quickest solution to get there.
Port Commissioner Frank Urtasun
“This center should’ve never gotten to the condition that it did,” Urtasun acknowledged. “(Now) we’re going in the right direction, and this is the quickest solution to get there.”
Port commissioners previously argued that PCA’s original proposal – submitted in December – for a $20 million modernization project would be entirely swallowed up by basic safety repairs, leaving nothing for actual upgrades.
The revised proposal
To prevent this, the district required PCA to immediately fix approximately 95 deferred maintenance safety items at the company’s expense just to get the lease on the table for the June 23 meeting, clearing the slate before the modernization project even began.
The management company also revised its proposal, including pushing the project commencement date up to next year from 2028 and shortening the construction schedule by an entire year.
All this led to a 12-month option and 35-year lease, requiring PCA to satisfy the preconditions before executing the lease.
Some preconditions include parking infrastructure improvements, landscape and asphalt upgrades and securing project financing, according to the port staff report.
If the management company fails to meet those conditions, possession of the ferry landing site will transfer back to the port district.
If PCA does meet the preconditions, then the proposed lease will be enacted for 35 years.
Port Commissioner Dan Malcolm said a lease contract is not just something that is filed and then put away, it’s an obligation that the port expects its tenants to follow – and he’s happy with the terms that came to the board.
“We had a developer that was negligent in their upkeep of the property,” Malcolm said. “This deal, as it sits today, is a demonstrably, measurably better deal.”
We are excited to build on the Ferry Landing’s legacy and ensure it remains a place the people of Coronado can take pride in for generations to come.
PCA Vice President of Development and Operations Christian Herrera
Christian Herrera, vice president of development and operations of PCA, said he was grateful for the approval of this proposal. “We are excited to build on the Ferry Landing’s legacy and ensure it remains a place the people of Coronado can take pride in for generations to come.”
The project’s total cost is listed at $21.9 million, with $13.9 million dedicated to permanent structural and physical improvements such as an EV charging grid and rebuilt public restrooms. About $5.3 million is for upgrading spaces occupied by the 24 shops and restaurants at the marketplace.
The remaining $2.7 million is for soft costs, according to Herrera.
To ensure the property doesn’t fall into disrepair again over the 35-year lease, the management company is now legally required to spend at least 5% of its gross annual income on maintenance every five years.
If the lease is approved and the entire project isn’t fully completed by July 1, 2029, PCA faces an immediate $250,000 penalty.
