The long-proposed Topgolf driving range for the waterfront grounds across from the San Diego airport is now moving forward to rave reviews from local leaders who previously rejected the idea of placing the paid attraction on a prime real estate.
On Tuesday, San Diego Harbor Commissioners gave the hi-tech site operator their informal blessing to take over an 8.5-acre site on East Harbor Island, meaning government agency employees can do advance site development and lease negotiations with the Callaway Golf-owned entity.
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“Thinking of the Seaport site and the Embarcadero area made me think of Harbor Island because I’ve been a big fan of attractions. And I believe attractions are really important to the neighborhood – to bring people (of all types) to the neighborhood,” Commissioner Rafael Castellanos said. “I think I’ve become a convert to the Topgolf concept, in terms of what it stands for and how it can create a kind of place – a place where people want to go.”
The comments were echoed by three of the other six commissioners, who also expressed enthusiasm for the high-tech practice.
“I am extremely excited…for a project led by an exceptional tenant that has proven itself nationally. And a tenant who told us early on that he could attract up to 500,000 or more people a year within a 25-mile radius of the site,” Commissioner Dan Malcolm said. “If we approve it, I think it will be a very unique offering not only here on Tides, but I imagine (the location) will likely become (Topgolf’s) flagship product for their entire chain. ”
Comments followed a presentation by the port’s urban design consultant, Civitas, on the firm’s recommended development configuration for the basin side of East Harbor Island, where car rental companies used to operate and now lease land for storage. The concept plan for the company’s site has changed significantly since an earlier version was shown to curators 2.5 years ago, with components moved to respond to feedback and better fit a known fault line on the east side of the property.
Commissioners had previously balked at the idea of allowing Topgolf to take over a significant portion of what has been described as one of the last major contiguous waterfront redevelopment sites in San Diego Bay. However, the updated site plan, as recommended by Civitas, appears to have allayed the Commissioners’ concerns about limiting further development.
The latest development creates space for two potential hotel plots – with parking garages and a set of 940 market-priced hotel rooms and 398 low-cost beds – to the east of the existing facility of the Port Police Department. To the east of the hotel sites, the firm has also set up a slightly different location for Topgolf and its large-area car park. The driving range has been moved east to an 8.5 acre parcel which ends at Liberator Way.
The new layout also includes a two-lane road on Liberator Way, a major waterfront public park to the east and south of the road, and pedestrian access points throughout the area.
Everything discussed for the area – apart from the location of Topgolf – remains hypothetical in nature, Lesley Nishihira, director of port planning, told commissioners.
“Everything we show here is a fit test to demonstrate to the board that we can put Topgolf in this location and still allow the maximum development program to be built (in the port master plan update) “, she said.
The question of what to do with the East Harbor Island area, where car rental companies operated, has been open since early 2019, when Oliver McMillan backed out of a plan to redevelop 48 acres of land and water with a hotel, boat and retail project.
That’s when Topgolf resurfaced – the company had been overseeing the site since 2015 – with a $40 million vision for a driving range on the bay. The Harbor Commissioners were initially disappointed with the idea of the entertainment venue, but reluctantly backed in late 2019 an exclusive negotiation agreement with the company while simultaneously seeking outside feedback on how to approach a redevelopment wider. The Topgolf contract remained pending guidelines. He was finally executed in January of this year.
Launched in 1999, Topgolf International popularized a technology-driven approach to the classic driving range where small groups eat, drink and compete in what are known as ‘hitting bays’. The company was acquired in March 2021 by Callaway Golf Company of Carlsbad in an all-stock transaction valued at over $3 billion.
In the United States, Topgolf has 68 company-operated sites and one company-operated lounge, as well as 11 sites under construction. In the first three months of the year, the entertainment asset generated $322m in revenue for Callaway – albeit with a net loss of $18m – with its same site sales down 2.3% higher than those of the same pre-pandemic three-month period in 2019 .
Topgolf’s vision for the San Diego Bay, as detailed in previous public discussions and exclusive negotiation agreement, calls for a 68,000 square foot, three-level facility with 102 hitting bays alongside restaurants and bars. , event space, mini-golf and 293 parking spaces.
The company still has to submit a formal project description, feasibility study and cost estimates, as well as negotiate the terms of the lease before the commissioners can approve the proposal. The project must then undergo an environmental review.
Separately, harbor staff were instructed by commissioners on Tuesday to quickly develop a financing plan for East Harbor Island’s public infrastructure needs and the aforementioned waterfront park space. A preliminary estimate put the cost of utilities, streets, parkways and parks at between $25 million and $30 million. The agency will consider imposing an impact fee on developers to fund improvements.
Additionally, Malcolm, the chairman of the board, said he would like to see the agency issue a request for proposals for the hotel plots by the end of the year.