Port, Navy Reach Historic Agreement on 1220 Pacific Highway Leasehold

Deal Unlocks New Public Access, Recreational, and Commercial Development Opportunities Along San Diego Bay’s North Embarcadero

The Port of San Diego and the U.S. Navy have reached a deal that will result in the early relinquishment of the U.S. Navy’s lease at 1220 Pacific Highway. The 3.4-acre site just east of the B Street Pier between North Harbor Drive and Pacific Highway has been leased by the Navy since 1949, primarily for office uses. The Port inherited the lease, which was set to expire in 2049, from the City of San Diego in 1962 when the Port was formed. The acquisition of the site unlocks new public access, recreational, and commercial development opportunities in a prime area of the San Diego Bay waterfront.

“This is historic. We are thrilled we have a deal with the Navy that means there will soon be more for visitors and our communities to enjoy and experience along our San Diego Bay waterfront,” said Chairman Rafael Castellanos, Port of San Diego Board of Port Commissioners. “Additional park and open space, better access, and more staycation and vacation choices are all in store for the bayfront. We thank our partners at the Navy for making this contribution to the San Diego region and we owe a big thanks as well to Congressman Scott Peters and Mayor Todd Gloria for their advocacy.”

This transaction represents a continuation of the longstanding positive collaboration between the two agencies. In 2022, the Port and Navy signed a first-of-its kind agreement that gives the Navy access to California’s Low Carbon Fuel Standard (LCFS) market to help provide millions of dollars for electrification projects around San Diego Bay. The Port and Navy also work together on natural resources management in the bay and coordinate on initiatives related to sea level rise.

“The Navy will relinquish its lease of the 1220 Pacific Highway property to the Port of San Diego although 27 years remained on the lease,” said Rear Adm. Brad Rosen, Commander, Navy Region Southwest. “The Navy negotiated with the Port on an agreement that meets our requirements while accommodating the Port’s interest for redevelopment with their Central Embarcadero redevelopment plan. This agreement affirms the Navy’s strong relationship with the Port and our shared commitment to cooperation and partnership.”

“This historic deal reflects the important spirit of the San Diego-Navy partnership,” said Rep. Peters. “I am thrilled to see the development of this land into a space that will promote the commercial and public interest of San Diego. I thank the Port Commission, the Navy, and the City for negotiating this deal in good faith and am glad to have helped bring these parties together to make it happen.”

“This agreement creates the opportunity to continue the reimagination of our Downtown waterfront and transform this portion of San Diego’s ‘front porch’ into open space and amenities for San Diegans and visitors to enjoy,” said San Diego Mayor Todd Gloria. “I’m grateful for the partnership of the Navy, which is demonstrating its continued commitment to the San Diego region and the mutually beneficial relationship that has served our city and our nation so well for over a century.”

Under an executed Lease Termination Agreement, the Port will provide $5.75 million in improvements to the Navy for facility or support services. The Port will also advance land use planning goals to deliver new public access and recreation spaces, including adding more park space and pedestrian promenades by extending Lane Field Park northward along Harbor Drive, extending B Street to San Diego Bay, adding more visitor-serving amenities and parking, and enhancing mobility connections.

The North Embarcadero is San Diego’s front porch. Together with the City of San Diego, the Port has transformed the area over the years into the beautiful and popular destination it is today. Visitors now enjoy an expanded bayside promenade, parks, and plazas; restaurants and attractions like Portside Pier, Carnitas Snack Shack, the USS Midway and Maritime Museums, bay cruises, and hotels; and more.

Following relinquishment of the leasehold, the Port plans to begin exploring development opportunities. This is anticipated to take two to four years, and therefore, the Lease Termination Agreement allows continued use of the property by the Navy during that period, which will also give the Navy time to transition operations still on site.

The Port is a non-taxing public agency. Redeveloping part of the site will increase revenues that can be reinvested back into the waterfront for various public amenities and services, environmental protection and conservation, public safety, and more.