The future of the Coronado Ferry Landing will return to closed-session negotiations as the San Diego Board of Port Commissioners considers a new development proposal from its longtime tenant, Port Coronado Associates (PCA).
The decision was made in a unanimous vote of the San Diego Board of Port Commissioners on Dec. 9.
At issue is whether the Port of San Diego will renew its lease with PCA after its current contract expires in June 2026. In October, the Port said that it would not renew the lease and PCA, city leaders, and the public raised objections.
In response, the Port said that PCA had not properly maintained the property, a position that was repeated during the commission meeting. Staff-commissioned assessments identified $17.5 million in deferred maintenance needs on the 13-acre retail site’s roofs, electrical equipment, and docks.
But PCA says that, until this fall, none of these concerns had been raised. The company has been working for years on a $20 million redevelopment of the property, using community input as a guide, said Christian Herrera, vice president of development and operations for PCA.
In response to the Port’s concerns, PCA submitted a new proposal for the Port to consider, which would address short-life maintenance needs within 120 days. Its earlier proposal slated construction to begin in 2028.
PCA also requested a one-year extension of its current lease to allow time to finalize negotiations. The commission voted to analyze PCA’s proposal and bring the matter back to closed session in January, but several commissioners said granting the lease extension would be premature.
The 38,000-square-foot retail and dining center generates about $29 million in sales annually. PCA has leased the space since the 1980s.
The Port of San Diego oversees tidelands along the San Diego Bay under the California Public Trust Doctrine, which requires that waterfront land be used for purposes that benefit the public.
The Port cannot sell public trust land, and it often enters into long-term leases with private companies that promise to invest capital into development or improvement. Under this model, the Port retains ownership and regulatory control of the land, but private companies finance and operate businesses on it under lease terms that allow them to recover their investment over time.
Lease extensions or renewals are often renegotiated when tenants propose substantial reinvestment projects, a process that is governed by Board Policy 355. Under this policy, which is often referred to as BPC 355, tenants seeking lease extensions must submit packages containing the redevelopment proposal, evidence that the tenant was in good standing, and financial feasibility.
PCA has accused the Port of violating BP 355 because, it says, the Port did not respond to its proposal within 30 days, and instead opted to discontinue negotiations. Under Section III, the policy states that the Port must respond to proposals in writing within 30 days of receipt, “either advancing the proposal for further review or identifying additional information needed.” If the Port took the latter option, the tenant would have 60 days to submit a revised proposal.
Port staff said in response that the Port should not have had to tell their tenant to conduct basic maintenance.
Now, the Port will consider PCA’s revised proposal in closed session. California’s Brown Act requires that most policy decisions be made in public. However, it makes exceptions for some types of negotiations, including those involving real estate.
As these negotiations play out, more than 20 tenants who sublease from PCA face uncertain futures. Like PCA, their leases expire in June 2026. Mayor John Duncan and City Councilmember Amy Steward spoke in support of those business owners. Councilmember Kelly Purvis also attended the meeting.
Commissioner Frank Urtasun, who represents Coronado on the board, said that action must be swift. He said that Coronado has been waiting for redevelopment of the Ferry Landing for too long, and the commission must act to make progress. Although he noted that his job was not to promote PCA specifically, he said that he did not support the Port operating the property, and hoped PCA’s new proposal could address the Port’s concerns.
“The city of Coronado has been very patient,” Urtasun said.
xgHJzJaFOOSnyFzxWUIs