Should San Diego Taxpayers Chip In Hundreds of Millions for Seaport Renovation?

A multi-billion-dollar redevelopment plan could bring new life to Seaport Village on San Diego's bayfront, but some residents are fading the idea now that the developer behind the potential revamp is asking for hundreds of millions in public funding.

At a meeting Tuesday, developer 1HWY1 told the Port of San Diego it will ask for up to $550 million in public money to fund its $3.5-billion Seaport San Diego project, which includes Seaport Village and central Embarcadero.

In a statement sent to NBC 7, the developer’s CEO, Yehudi "Gaf" Gaffen, said rising sea levels inflated the cost projections for the project, and said public investment strategies should be considered for public infrastructure and public space.

Photos: Should San Diego Taxpayers Chip In Hundreds of Millions for Seaport Renovation?

"These investments will need to be made by someone – and it makes sense to include them in this transformational project," Gaffen said. Scroll down to read his entire statement.

Mike Hess Brewing at Seaport Village was cranking out food for Taco Tuesday and beer flights for tourists and locals Tuesday afternoon. They are open seven days a week, and the restaurant's general manager, Cassia O’Loughlin, loves their location.

"There's so much to see and do," she said. She knows a renovation of Seaport Village and the surrounding area would be good for business.

Public funding for the Seaport Project is something O’Loughlin says residents should consider.

"I think it's worth asking the public and presenting it in the way of, 'THIS is for you,'" she said.

The developer said that public money will pay for site infrastructure and amenities, such as the proposed urban beach, marina infrastructure, the proposed promenade and greenbelt, hotels, piers and wetlands.

There are several options the developer would like to pursue to grab a portion of revenue or tax dollars generated by the project.

One option is the formation of an “enhanced infrastructure financing district," which would collect property taxes to encourage incremental growth. Another option? A special tax district that would impose fees on hotels and entertainment venues.

Katie Wood, who’s lived Downtown for seven years, said she doesn't support using public funds for the project, or any remodel at all.

"I like how it is and I don’t see a need for new hotels. I just don’t think we need more," she said.

Greg Olsen has been coming to the downtown waterfront for the past 42 years since he enlisted in the Navy at the age of 19. Olsen doesn’t believe the public should aid in funding.

"I like the access to the waterfront. I hope we don’t lose it. It's really important to the local people here," he said. "I just don’t believe we should be funding things through taxes with what's going on in the economy. I don’t think we should be funding anything with taxes."

Business owners and employees say however the project gets funded, it would be good for business. But plans for a waterfront renovation have been in the works since 2016. Even if things move ahead, the developer says they wouldn’t break ground until 2025 at the very earliest. On Tuesday, the developer said the cost of the project has increased because of projections of the rise in sea levels and the relocation of utilities. They cited other projects which have used public funding including Petco Park and the Chula Vista Bayfront.

1 HYWY1 CEO Yehudi "Gaf" Gaffen's statement:

"Seaport San Diego is designed to keep the best of what we have and reflect the community’s wants and needs with greater public access to the waterfront for everyone. We are proposing to create a much more open and spacious feel along the waterfront with more recreational open space, more water views, better coastal access and new experiences.

On Tuesday, Oct. 11 we will be presenting an update to the Port of San Diego on infrastructure costs for this project. In addition to adding many more public amenities to our proposal than originally envisioned, we conducted due diligence and identified major infrastructure needs. Our region must address the worrisome projections for sea level rise and other risks affecting this site; not doing so would be irresponsible. We’re stepping up with a plan to stabilize the shoreline, address the changing sea level rise projections, and relocate massive utilities, among other issues. These investments will need to be made by someone –and it makes sense to include them in this transformational project.

Let me be clear – private investment will fund the vast majority of this multi-billion-dollar project. At the same time, it is important to start a conversation about public financing strategies for public infrastructure and public space. We have assembled some of the industry’s brightest and most capable financial experts including MuniCap and Kosmont & Associates, and everything is on the table including private investment, sponsorships, and various mechanisms to re-invest tax revenues that are generated by the project itself."