Port of San Diego to Pursue Entertainment District on East Harbor Island, Board Authorizes Term Sheet with Topgolf

As part of efforts to enhance and activate the San Diego Bayfront, the Board of Port Commissioners has directed Port of San Diego staff to issue one or more Requests for Proposals (RFPs) to create an entertainment district on a portion of eastern Harbor Island. The goal is to bring new public access and recreation opportunities where none currently exists, as well as to provide leisure activities and food and beverage options for visitors and locals.

The current plans call for Topgolf as the anchor tenant and could include other so-called “eatertainment” concepts – leisure activities such as pickleball, mini-golf, darts, ping-pong, and shuffleboard in tech-infused settings similar to Topgolf, breweries, or other retail operations with an emphasis on blending entertainment with quality food and drinks.

“This is an exciting redevelopment strategy to bring people to the bayfront to enjoy it and the beautiful views, which is a major part of what the Port is charged to do,” said Chairman Rafael Castellanos, Port of San Diego Board of Port Commissioners. “The overwhelmingly high public interest in and support of Topgolf has attracted interest from other “eatertainment” concepts, so let’s see what’s out there and bring a variety of activities and recreational offerings, at a variety of price points – including low and no cost, that locals and visitors to San Diego Bay can enjoy.”

The area of East Harbor Island proposed to be improved is approximately 43 acres. It includes plans for approximately 11 acres to be developed into new public waterfront parks and promenades (in addition to the existing Harbor Island parks and promenades), the proposed Topgolf venue, space for one or more additional “eatertainment” venues, and supporting infrastructure. Several rental car companies currently operate in the area and there are currently no public amenities on the site.

Staff anticipates issuing the RFP(s) toward the end of the first quarter of calendar year 2024 with responses anticipated to be due in mid-2024. Staff expects to return to the Board no sooner than the third quarter of calendar year 2024 with recommendations.

In addition to directing staff to issue one or more RFPs, the Board also authorized staff to sign a non-binding term sheet with Topgolf, which provides staff with a negotiating framework for any potential future real estate or lease agreement to be submitted for future consideration by the Board. The non-binding term sheet provides a proposed lease term of 20 years with four, five-year options to extend. Minimum annual rent following completion of construction is set at $1,527,000; however, projected rent upon commencement of operations is approximately $1.9 million in year one of operations based on percentage rental rate projections. Topgolf is proposing a three-story venue housing 102 hitting bays with an event/stage area, outdoor patios, and additional games and entertainment.

Environmental review for the proposed Topgolf project is underway. A Notice of Preparation of a Draft Environmental Impact Report and Port Master Plan Amendment was issued on November 17, 2023, and is available for a 30-day public review period. A virtual public scoping meeting is being held on Thursday, December 7, 2023, at 5 p.m. (Click on the link above for meeting details.) It is anticipated that public review of the Draft EIR would occur in the first half of 2024 followed by Board consideration of the project for approval and an Option to Lease Agreement in the second half of 2024. Final approval of the Port Master Plan Amendment (if necessary) followed by a Coastal Development Permit is expected in 2025 with commencement of construction soon after.