The city of San Diego recently agreed to pay $5.3 million to settle a lawsuit filed against it in 2017 over the “rights to develop the land adjacent to San Diego’s Convention Center.”
The city of San Diego recently agreed to pay $5.3 million to settle a lawsuit filed against it in 2017 over the “rights to develop the land adjacent to San Diego’s Convention Center.” Fifth Avenue Landing, the developer that filed the suit, argued that the city “prevented the development of the two-acre property that it controlled, in order to pursue an expansion of the Convention Center on the same site.”
The events that led to the lawsuit began in June 2017 when Mayor Kevin Faulconer set his sights on “expanding the Convention Center.” In order to achieve that particular goal, he “asked the city council to hold a special election to raise hotel taxes in order to pay for the $600 million dollar expansion.” At the time, his office planned to use some of the revenues on homeless services. Unfortunately for Faulconer, the San Diego City Council “voted against holding a special election.”
Fifth Avenue Landing also pushed back against the mayor’s plans and said Faulconer’s expansion plans “placed their plans to build an 830-room high-end hotel, as well as a second more affordable hotel, all on hold.” It’s important to note that the developer “has a long history at the site.” In fact, the development partnership has had the “lease on the state land behind the Convention Center since 1991 and since has spent millions on development plans and upgrades to the land.” It began making plans to build a hotel on the site years ago when the 2008 recession brought them to a halt.
Shortly after the recession hit, the city “purchased the lease from Fifth Avenue Landing in 2009 for $12.5 million… in hopes to expand the Convention Center.” However, in 2015 the city stopped paying “after only making a few payments.” As a result, foreclosure set in and the lease was returned to the developer.
“…[T]he City has unabashedly interfered and continued to interfere, with the Port approval process. [Their] conduct has in fact hampered Fifth Avenue Landing’s progress in developing its hotel under the lease.”
For the last year, both the city and developer have been duking it out in court. However, on November 15, “the city paid Fifth Avenue Landing $5.3 million to settle the case out of court,” according to city documents. The following day, the case was dismissed.
Despite the settlement, it’s not yet known how it will “impact plans to expand the Convention Center.” The city also has yet to respond to requests for comment.