DEAL ON SITE STILL ELUSIVE
Carlsbad grants another extension as time is running out in effort to obtain coastal site from SDG&E and NRG
A “significant financial gap” remains in the 9-year-old negotiations intended to give Carlsbad up to 16 acres of prime coastal property at the site of the recently demolished Encina power plant.
City officials struck a deal in 2014 with San Diego Gas & Electric Co. and NRG Energy to work together to find a new inland home for the power plant’s North Coast Service Center at the corner of Carlsbad Boulevard and Cannon Road. The center has more than 200 employees who maintain natural gas and electrical distribution lines from Camp Pendleton to Del Mar and east to Fallbrook, Vista and Rancho Santa Fe.
Since then, more than a dozen possible sites, some owned by SDG&E, some by the city and some private, have been studied and ruled out. The one remaining possibility is to reconfigure the 16-acre service center within the existing site, more to the east and closer to the railroad tracks that cross it. That could free up about 10 acres of the property to be transferred to the city.
The Carlsbad City Council agreed Tuesday to extend the negotiations for another six months and to consider terminating the negotiations if no agreement is reached by March 31, 2024. If no agreement is reached, NRG is required to pay the city $10 million under the terms of the 2014 settlement.
“We’re not defeated yet,” said Deputy City Manager Gary Barberio. “Basically, we’re asking for more time.”
In the settlement, the city dropped its opposition to the new power plant that NRG has since built east of the railroad tracks on the Encina site. Also, SDG&E agreed to demolish the outdated 1950s-era plant on the property, a job completed last year. NRG offered to pay up to $22.5 million to SDG&E for construction costs to relocate the operations center.
The city is not responsible for any of the relocation costs, Barberio said. He and others declined to say how much the so-called funding gap may be because the costs are part of the ongoing negotiations, but all costs, property values and more have increased considerably since the agreement was reached.
In addition to the service center property, the city will get the land it now leases from SDG&E for Cannon Park and a small vacant parcel along the northern shore of Agua
Hedionda Lagoon. The city recently opened a temporary fire station, its first west of Interstate 5, on land leased from SDG&E at the site formerly occupied by the old power plant just off Carlsbad Boulevard.
Until last year, the focus for a possible relocation was on a site known as Lot 11, which is property SDG&E owns near the strawberry fields along Cannon Road east of Interstate 5. Before that, the city proposed land it owns on the northern side of the parking lot at The Shoppes at Carlsbad shopping mall just off El Camino Real. SDG&E said both sites proved impractical because of costs, timing and
environmental reasons.
“We are looking at reorientation on the existing site ... freeing up property on the front half,” said Eric Leuze, vice president of asset management at NRG. “This new configuration would provide access to Cannon Road ... which is an important consideration.”
SDG&E has hired a consulting team to estimate the costs of reorienting on the site, said Jennifer Jett, SDG&E’s vice president of operations support. The costs basically fall into three categories — construction, land value and tax impacts
“This has been a long process, I understand that,” she said. “We continue to work together.”
Council members encouraged all parties to continue their negotiations.
“We need a surge,” said Councilmember Carolyn Luna. “It seems like there’s a lot of great ideas and everybody is sharpening their pencils.”
“People are excited but frustrated,” said Councilmember Teresa Acosta. “We need to really light a fire under our partners to make sure we can move faster.”
The entire 95-acre industrial area includes the Claude “Bud” Lewis Carlsbad Desalination Plant, which began production in 2015.
No decisions have been made about what the city would do with any property it gets from the agreement. The Carlsbad general plan calls for “a mix of open space and visitor-serving commercial uses” on the site.