Port selects new Seaport Village operator
Seaport Village is under new management.
Officials with the San Diego Unified Port District selected Protea Property Management to operate Seaport Village until June 30, 2021, with options to extend the term. Protea is part of the same company that has won the bid to remake the nearly 40-year old shopping and recreation area.
Protea’s plans include completely remaking the village from a grouping of small villas to a big money-maker that includes hotels, offices, an aquarium and a 480-foot observation tower.
The previous operator of the village, with more than 50 shops and 17 restaurants, was Newport Beach-based TRC, formerly known as Terramar Retail Centers. A last-minute effort by another group looking to manage the property, Dallas-based Stream Realty Partners, was rejected by the port.
“Property management and leasing is our business. It’s what we do,” said Bret Morriss , managing director of Stream’s San Diego office. “There is a good thing that comes out of separation of church and state sometimes and you need to kind of be cognizant of that.”
Port commissioners said it made more sense to go with Protea because they would be the ones developing the new Seaport Village.
Commissioner Dan Malcolm said Stream had a strong proposal but the port had much confidence in Protea’s $1.2 billion to $1.5 billion redevelopment.
He said if they couldn’t also trust Protea with property management “then there is something wrong with the underlying decision to move that developer forward.”
Protea said after the vote it was excited to get the deal approved because it gives them the opportunity to try out different ideas for the site while they are going through the expected three to four year process before construction begins.
“It’s an incubation period,” said Protea’s Jeffrey Essakow.
The new management arrangement for Seaport Village means much more money for the port. TRC, which is the lessor, manager and operator through Sept. 30, had paid the port around $2.5 million a year for the ground lease while keeping most of the $35 million in annual gross revenues.
Under the new deal, Protea will be paid around $10,000 per month (or up to 1.7 percent of gross revenue after Oct. 1) to manage Seaport Village. This means most of the revenue will go directly to the port. But, it also means the port is responsible for any capital improvements and operating expenses.
Protea said it has been talking with current tenants since getting the job to remodel the village. The only shop operator to speak at Tuesday’s meeting was Peter Mackauf, operator of Ben and Jerry’s, who said he approved of Protea being awarded the contract.
“(Protea) has been active in their outreach to us and tenants,” he said, “to be thoughtful about what our concerns and worries are.”
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