June 30, 2022

Tom York on Business: Doug Manchester Bows Out as New Developer Takes Over Pacific Gateway

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San Diego Research and Development District.
A rendering of the planned San Diego Research and Development District.

By Tom York

Local real estate commercial developer Doug Manchester struggled for at least 15 years to build his long-cherished Pacific Gateway Project on a dozen blocks along the city’s central waterfront at the foot of Broadway. He suffered a major setback when the Great Recession of 2009 rolled over the region like a tsunami, and as a result, was able to bring little of his overall dream to fruition. The exception being the recent completion of the 17-story, 373,000-square-foot new headquarters high-rise for the Navy.

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But in a surprise announcement this weekend, Manchester revealed he has sold off five of the remaining seven blocks of his ownership to IQHQ, a new San Diego area developer that is focusing on life science projects. And IQHQ announced that it has launched its own vision for the area, the San Diego Research and Development District, which will begin with many buildings spread over three blocks of the five blocks of Manchester’s original project site. IQHQ has declined to reveal much data about the construction effort, including the cost, but it is estimated that project could total $1.5 billion.

According to the San Diego Union-Tribune, the project will feature several mid-rise buildings and a 17-story high-rise, as well as museum and open space. When the first phase is completed in two years, IQHQ says the first lab and office buildings will start drawing “top-tier life science companies and talent to downtown with a premier … waterfront campus.” However, a spokesman could not say whether the developers have lined up tenants for the new buildings when completed, or whether they are starting work on speculation.

IQHQ, which is structured as a real estate investment trust, raised $770 million in a private financial transaction early in 2019. Other IQHQ projects underway include Fenway Center, a 21-story and 10-story mixed use lab and office structure in Boston and a 213,000-square-foot office and lab building in South San Francisco. The company is headed by Alan Gold, who has specialized in life science-focused real estate development over his career. He serves as executive chairman. Steve Rosetta, another local real estate veteran, is the CEO.  A media release says the project promises to contribute more than 4,000 jobs, $50 million in annual taxes and fees, and $15 billion in economic benefits.

“The contribution to the local economy will be significant,” stated Perry Dealy, development & construction manager for the project. “We are excited to deliver a premier life sciences real estate development and elevate San Diego on the world-stage.” Manchester said he will retain ownership of a couple of blocks in his original project that will eventually see the construction of a 1,035-room waterfront hotel and 1.9-acre plaza.

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San Diego’s underserved communities have another source for masks and other medical gear, thanks to a four-year, $1 billion effort on the part of Bank of America to ease the impact of the COVID-19 pandemic. According to a recent news release, the bank is working with the mayor’s office and agencies to distribute 88,000 masks. The bank said 50,000 masks are going to the City of San Diego — 20,000 to the San Diego Fire-Rescue Department, 20,000 to the San Diego Police Department, and 10,000 to Operation Shelter to Home at the Convention Center. In addition, 26,000 masks are going to the Chicano Federation for PPE kits that will be given — among others — to underserved families, while another 10,000 masks are going to the Jacobs Center for Neighborhood Innovation for homeless kids and high-risk youth and their families.  Still another 2,000 masks will go to the Interfaith Shelter Network shelter in Chula Vista. “San Diego has some incredible community partners who’ve stepped up during the COVID-19 pandemic,” said San Diego Mayor Kevin L. Faulconer in a prepared statement. “This donation will go a long way toward continuing to prevent the spread of this virus and keep San Diegans safe in the months ahead.”

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Is San Diego the incredible shrinking city? It would seem so, if storage facilities provider StorageCafe’s most recent report on new home sizes is any indication. The study, which examined home size evolution over the past decade, shows that San Diego has been building considerably smaller houses and apartments. In the past decade, San Diego single-family homes lost the most space among the top 20 largest U.S. cities, about 259 square feet. Homes now encompass on average 2,895 square feet, quite a difference from 3,154 square feet in 2010 when the city had the largest homes among the 20 largest cities in the United States. San Diego apartments also experienced a loss of living space, about 73 square feet, which means new apartments offer on average 828 square feet, placing the city in the middle of the pack compared to cities nationwide. Self-storage is a tight market, averaging just 3.9 square feet worth of storage space per capita with an average street rate of $157 for a standard 10×10 self-storage locker — among the most expensive in the top 20 largest US cities.

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San Diego-based cannabis derivative maker Preferred-CBD becomes the first CBD company to partner with nationwide card benefits provider Veterans Advantage. CEO Scott Higgins said his organization is seeing growing interest for hemp-derived CBD among the military and veteran communities. Preferred-CBD products include a 500-milligram full spectrum CBD tincture and a 400-milligram CBD muscle balm.

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Finally, Oregon’s loss is Carlsbad’s gain. The executive team at Shari’s Management Corp., the owner of restaurant brands Shari’s, Coco’s and Carrows, is moving to 4,000 square feet of space on Aviara Parkway in Carlsbad from Beaverton, OR.  And future plans include moving its food and beverage “ideation kitchen” to Carlsbad, which will add as many as four corporate employees to the mix. With more than 4,000 employees, the chain currently operates 92 locations in Oregon, Washington, Idaho and California. The planned office decentralization has proved extremely timely when it came to reducing costs under the negative business impact of COVID-19, the company says. “The decentralization of our offices allows us to add the leadership talent available in the Los Angeles, Orange County and San Diego and Dallas markets to our seasoned Beaverton teams, taking advantage of the synergies available from major restaurant regional hubs while reducing our direct facility costs by nearly 50%,” said Sam Borgese, Shari’s CEO.

Tom YorkTom York is a Carlsbad-based independent journalist who specializes in writing about business and the economy. If you have news tips you’d like to share, send them to [email protected]

Tom York on Business: Doug Manchester Bows Out as New Developer Takes Over Pacific Gateway was last modified: September 28th, 2020 by Editor

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