Builder Asks Sears Site in Famosa Slough Swap

A suggestion last May by controversial San Diego developer Terry Sheldon that he might swap land that he owns in the Famosa Slough wetlands for the city-owned Sears department store site in Hillcrest became public Tuesday as the San Diego City Council discussed in closed session a lawsuit Sheldon has filed against the city over the wetlands issue.

In the face of heavy environmental opposition, Sheldon has been attempting to build a 400-unit condominium in the slough, a badly degraded marsh along West Point Loma Boulevard near Ocean Beach and the San Diego River channel. The developer has sued the city, claiming that it has violated an agreement with the U.S. Army Corps of Engineers to keep river water out of the area. Sheldon asserts that the slough would not be a wetlands--and therefore not subject to special protections by state wildlife agencies--if water were not allowed into it.

In an effort to find a solution short of court action, a City Council committee in late May ordered an appraisal of the 20-acre slough site, which Sheldon values at $25 million or more. The committee also asked Councilman Ed Struiksma to talk with Sheldon about possible swaps in which the city would trade land it owns and allow Sheldon to develop it in exchange for Famosa.

Struiksma said Tuesday that Sheldon rejected for various reasons the list of possible exchange sites and instead suggested the Sears property. The city recently paid $9.3 million to buy the Hillcrest site, where Sears, Roebuck & Co. operated a major store on 12.2 acres until early this year. The land has been targeted by the city either for a new main library or for extensive mixed-use activities as a redevelopment anchor for the Hillcrest community.

Struiksma said the council on Tuesday decided to turn the entire issue of the lawsuit and possible land swaps over to the city attorney and city manager, and did not meet specifically on a Sears-Famosa swap. He said he personally doubted whether a Sears swap would ever take place, noting that the land’s value is far less than Sheldon’s estimate for the slough. In addition, the central location of the Sears site would require substantial planning reviews that could take years.

In mentioning the Sears site, Sheldon said Tuesday, he was only attempting to keep discussions for a compromise going. “I would be interested, but I haven’t worked the (financial) numbers yet, to see if the thing is feasible, to see what the city would let me do there,” Sheldon said.

David Nielson, a planner in the city manager’s office, said Tuesday that there has been no discussion of specific land swap possibilities for the slough.