Developer Refuses to Pay Bill : Supervisors Shut the Door on Harbor Square

Harbor Square, the complex of offices, restaurants, shops and a hotel proposed for two parking lots flanking the bayfront County Administration Center, is dead.

San Diego County Supervisors voted Tuesday to cancel their contract with Harbor Square Associates, the developer that has tried to build it since the project was first proposed in 1981.

The vote was 3-1, with Supervisor Leon Williams dissenting and Brian Bilbray absent.

The contract was broken on a technicality: The developers refused to pay a single $25,000 monthly payment they owed the county in exchange for the right to build on the land.

Behind the decision, however, lurked broader issues involving the county’s relationship with the City of San Diego, the city’s current political turmoil and the effort of newly elected county Supervisor Susan Golding to untie an agreement made more than two years before she joined the board.

It was Golding’s outspoken stand against the project that led finally to its defeat, Robert Davidson, the developer’s representative, said after the meeting.

“We can’t out-manipulate and out-maneuver a county supervisor,” said an angry Davidson. “We just seem to be the unfortunate victims of a bad political climate.”

Davidson said Tuesday’s action would tarnish the county’s reputation and diminish the chance of

future “public-private partnerships.”

“Government is supposed to solve problems, not make messes,” he said. “This is just one big mess. It’s hurt us, it’s hurt the community, and the worst thing is going to be the fallout for the county.”

But Golding, who opposed the project because she said it was incompatible with the historic County Administration Center, stuck by her stand that a county decision to allow the developer more rent-free time would be a gift of public funds.

She said the developers, who claim that more than $2 million has been invested in Harbor Square, could have saved the project--at least for now--by paying the $25,000 they owed the county.

“The facts are that they broke the contract,” Golding said. “Had they not done so, I think the majority of the board would have voted in their favor.”

Indeed, Harbor Square Associates seemed earlier this year to have the votes needed to place a lengthy moratorium on the monthly payments. Only Golding spoke against such an arrangement, with the other supervisors asking just that the $25,000 owed for March be paid before the developer was given more time to seek city approvals for the project.

In recent weeks, however, as the county waited for Harbor Square Associates to comply with the contract, other board members began to turn toward Golding’s position.

Rather than blame the developer, they placed responsibility for the project’s demise with the City Council, which took advantage of its rare opportunity to control a project proposed for county-owned land.

The county gave the city that right as part of a deal to clear title to the land, which was once owned by the city and was home to San Diego City Hall. On March 26, the City Council left the project in limbo when it rejected the developer’s latest plans while at the same time telling the county that some agreement might yet be reached to salvage Harbor Square.

But not even a framework for such a deal ever evolved, and the developer, county staff and supervisors have complained that Mayor Roger Hedgecock’s legal problems and the pending retirement of City Manager Ray Blair have left the city leaderless, and left the county out in the cold.

Tuesday, Davidson focused on the city’s behavior, arguing that the county and the developer should work together to overcome that obstacle.

“The problem we’re facing now is a problem with the city,” Davidson said. “Rather than have our team chopping up each other, we should be working together to come up with a means for dealing with the city. To do that, there’s obviously going to be some time needed.”

But board members said no amount of time would be enough to win approval for Harbor Square under current conditions.

“As long as half that City Council is running for mayor, there will never be a decision on that project, no matter who is involved,” Supervisor George Bailey said Tuesday. “It is up to us to clear the decks and to go to the Legislature and get control over our own land or realize we’ll never do anything with it other than park cars or plant a few trees.”

Golding said after the hearing that she believes the county will still be able to attract a developer for a scaled-down, more park-like project, despite Harbor Square Associates’ claim that it was mistreated.