Navy Plans Huge ‘Corporate Headquarters’ for Downtown Base

The Navy has ambitious plans to consolidate many of its administrative offices in San Diego into a 6,000-worker “corporate headquarters” at its downtown naval base and supply center, which would undergo a major face lift, perhaps in partnership with a private developer.

If the Navy’s plans for the $140-million project are successful--at this point they are still conceptual and years from fruition--it would also have the effect of freeing about nine acres of government-owned property east of Lindbergh Field that could then be sold as surplus on the open market.

In yet another cog in the proposal, the San Diego Unified Port District stands to retrieve a valuable piece of property that it now leases to the Navy at 1220 Pacific Highway, between Market Street and Broadway--a parcel with lucrative tourism potential.

The bold plans, which many Navy officials have called “unique,” have raised some concerns on the part of local government and business officials. An advisory committee involved with the Navy in the early planning and headed by San Diego City Councilman Bill Cleator wants to make sure that the Navy’s proposal doesn’t result in a wall of high-rises obscuring the waterfront.

Local officials say that, in the past, the Navy has been insensitive to their concerns. They cite the construction of the huge Navy Hospital in Balboa Park, which caused a bitter controversy between the Navy and those who thought the park was an inappropriate location.

But the Navy says it isn’t interested in ramming its proposal down the public’s throat. Instead, says Cmdr. Eugene Talmadge, the Navy is going out of its way to include the participation of local government and business officials in the early planning phase.

“We think this is an ideal opportunity to be involved with the city,” said Talmadge, an engineer and one of the managers of the project. “Our concern for urban design opportunities are paramount. We don’t want to take a stand-offish attitude.”

“In my opinion, you won’t see a fence around the complex like you do now, there will be full pedestrian circulation in what we envision as a large plaza, and there will be view corridors” to the water, Talmadge said.

The land in question is 21 acres of prime waterfront property that now contains the combined San Diego Naval Base and Supply Center. Called the “Broadway Complex” by Navy planners, it is north of Seaport Village and south of the Holiday Inn Embarcadero. The property, which includes an important deep-water pier, is bounded by Pacific Highway, Market Street, Broadway and San Diego Bay.

There are several structures on the property, including warehouses and two large old office buildings, one built before World War II and the other during the war.

The Navy wants to move the warehouse activity to its 32nd Street facility, and to then transfer various administrative offices, now spread throughout the city, to one central office complex of as much as 1.6 million square feet. (As a reference, the Wells Fargo Bank high-rise downtown contains about 500,000 square feet.)

“Given the presence of the Navy in San Diego, we’re talking about a regional headquarters on a scale of General Motors,” Talmadge said.

Once the consolidation is complete, the complex would have 6,000 workers. About 1,500 work there now.

Part of the push to consolidate is a demand from the federal General Services Agency that the Navy abandon a large World War II-vintage facility known as Air Force Plant 19 on the east side of Lindbergh Field. Workers from the dilapidated building would move to the Broadway Complex, and the GSA would then declare Plant 19 as surplus property and sell it to private developers.

Yet another component of the proposal involves land that the Navy now leases from the San Diego Unified Port District. At 1220 Pacific Highway, between the Holiday Inn Embarcadero and the Santa Fe Railroad Depot, the property contains a two-story Navy office building and is considered an ideal location for tourist-related development.

The Navy has told the Port District that it is willing to break its 50-year lease, which still has 20 years to run with a 50-year renewal option. In return, the Navy wants the Port District to build it an office building at the Broadway Complex.

Don Nay, director of the Port District, said it would cost the Port District about $18 million to construct the Navy’s office building. “We told them we wouldn’t have the money, given what we’re doing with the convention center, until 1988,” Nay said. “So for right now, it’s on the back burner.”

Nay said the Port District would be more than happy to take back its property so that it can be developed for commercial or tourism purposes connected to its B Street Pier. “We need some cash registers to pay for our other activities on the waterfront,” he said. “We think development of this property would help us do that.”

So, faced with the Port District’s delay and the unlikely prospect of Congress approving the estimated $140 million in total development costs, the Navy has decided to explore another route: a joint venture with private developers.

“This has never really been done by the Navy at this scale,” Talmadge said. “The concept is we sit on very valuable land. The idea is our requirements can be met with a certain amount of construction, but there also are opportunities for return for a developer.”

“The strategy is to first satisfy the Navy’s needs for construction, and second to allow the developer to develop the property to his needs so he can recoup his investment,” said Talmadge.

Such private-sector construction could lead to new office buildings, either shared with the Navy or separate, or some type of commercial-retail facilities.

Talmadge says the Navy command in Washington has approved the joint venture partnership strategy in principle.

By the end of November, the Navy will have selected a consultant to do a three-month market analysis of its Broadway Complex proposal.

Possible results of the wide-ranging, in-depth study could be a recommendation that the Navy proceed with its plans without delay; that the development timing is not right and thus the project should be postponed a few years, or a recommendation, albeit unlikely, that the Navy scuttle the joint venture plan altogether.

Talmadge said that, if the study supports the Navy’s proposal and Congress approves, the Navy could be asking for bids by this time next year. Even if the joint development plan is rejected, the Navy has a fallback plan. Congress has already budgeted $27 million for the initial rehabilitation and renovation of the Broadway Complex.

Viewing the Navy’s plans with some wariness is Councilman Bill Cleator, who heads a committee consisting of representatives of the Port District, the Centre City Development Corp., the Chamber of Commerce, San Diego Assn. of Governments (Sandag), Seaport Village and Santa Fe Railroad. The advisory group was put together by Sandag at the request of the Navy.

“Basically we think it’s a good idea that they want to upgrade their property,” Cleator said. “But we want them to be sensitive to the city. What does dumping 6,000 people on the waterfront do? We don’t want a wall of high-rises right on the waterfront.”

Cleator says he feels the Navy’s land is best suited for tourism, and he wants the Navy to look at other nearby property that could be obtained through a land trade.

There is little chance of that happening, says Talmadge, noting that the Navy considers the complex and the deep-water pier of strategic importance.

“We have some hard requirements,” Talmadge said. “That land is very expensive, and we’re not going to give it up for free. We need access to a deep-water port this side of the (Coronado) bridge. We have the responsibility of making sure that cargo moves out to the Pacific.”

Cleator says that whatever plan is finally selected by the Navy, it’s important that local officials be kept involved in the planning. “I guess what I’m saying is we have an opportunity here,” he said. “Let’s not screw it up.”