City Pays $5.3 Million To Settle Convention Center Lawsuit - NBC 7 San Diego

City Pays $5.3 Million To Settle Convention Center Lawsuit

Developer Fifth Avenue Landing claims the city’s desire to expand the downtown Convention Center prevented their plans to build a hotel.

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    The City of San Diego has paid $5.3 million to settle a lawsuit over the rights to develop the land adjacent to San Diego’s Convention Center.

    The city and developer, Fifth Avenue Landing, finalized the settlement on November 15, according to a list of claims paid by the city in November that NBC 7 obtained through a public record request.

    Fifth Avenue Landing filed its lawsuit against the city in October 2017, claiming 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.

    A photo exhibit from Fifth Avenue Landing's lawsuit, showing the land behind the Convention Center marked in blue that the legal fight was over.
     

    For Mayor Kevin Faulconer, expanding the Convention Center was a major goal. In June 2017, Faulconer asked the city council to hold a special election to raise hotel taxes in order to pay for the $600 million dollar expansion. The revenues would have also been used for homeless services. The San Diego City Council, however, voted against holding a special election. 

    According to its lawsuit, Fifth Avenue Landing said that the mayor and Convention Center’s push to expand placed their plans to build an 830-room high-end hotel, as well as a second more affordable hotel, all on hold. 

    Fifth Avenue Landing has a long history at the site. The development partnership has held 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. Plans to build a hotel on the site were in the works until the 2008 recession when those plans came to a halt. 

    In 2009, the city purchased the lease from Fifth Avenue Landing for $12.5 million, in hopes to expand the Convention Center. But after making only a few payments, the city stopped paying in 2015, which led to foreclosure and the lease being returned back to Fifth Avenue Landing. 

    Despite this hurdle, Faulconer and others have fought to revive plans to expand the convention center. But Fifth Avenue Landing claims in their lawsuit that it was those efforts from the mayor and others that blocked their plans to develop the site, including plans to build a new hotel. 

    “...[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,” reads the lawsuit. 

    For more than a year, the two sides have proceeded with the case in court. Then, on November 15, according to city documents, the city paid Fifth Avenue Landing $5.3 million to settle the case out of court. According to the court’s docket, the case was dismissed the following day. 

    There has been no word on how this settlement will impact plans to expand the Convention Center. NBC 7 reached out to the attorneys representing Fifth Avenue Landing but did not hear back in time for publication. 

    The City of San Diego also did not respond to NBC 7’s request for comment.