MARINA SET TO CHANGE HANDS FOR $84M
Sunroad, at edge of Harbor Island, being sold to Safe Harbor
The operator of the Sunroad Resort Marina at the eastern edge of Harbor Island is planning to off load its maritime asset in a sale valued at more than $84 million.
Tuesday, Port of San Diego commissioners, who were asked to sign off on the transaction before it closes escrow because the property is on district tidelands, voted unanimously in favor of the sale. The board action means Sunroad can transfer its recently updated longterm ground lease to buyer Safe Harbor Marinas — so long as the parties pay the government agency a portion of proceeds.
The deal is the first of its kind for the San Diego Unified Port District, which will pocket an estimated $2.1 million from the transaction thanks to a 2015 amendment to the agency’s real estate policy.
“Leasehold assignments are fairly common real estate transactions and indicative of a healthy market,” Tony Gordon, the port’s head of real estate, told commissioners. “However, there is something noteworthy about this specific transaction in that it will be the first time the district is compensated for the value of land in the form of an assignment participation fee.”
San Diego-based Sunroad Enterprises is a longtime real estate developer, car dealership owner and port tenant. It has operated the 600-slip Sunroad Resort Marina at 955 Harbor Island Drive since 1987, recently securing a new, 40-year lease for the property that includes 259,090 square feet of land and 1,029,239 square feet of water. The operator’s annual minimum rent pay
ment starts at $1.1 million for the first five years with increases thereafter based on the consumer price index. The lease also requires the operator to make capital improvements to the marina or pay fees to the port.
Earlier this year, the firm was also granted approval to lease a bayfront parcel adjacent to the marina for a $160 million Harbor Island hotel project that’s slated to start construction in 2023.
In May, Sunroad agreed to sell the Harbor Island marina leasehold to Safe Harbor Marinas, whose parent company is the RVpark-focused real estate investment trust Sun Communities, according to a staff report prepared for Tuesday’s board meeting. Although the exact purchase price was not publicly disclosed, the port’s fee is equal to 2.5 percent of gross proceeds from the leasehold transfer, or just shy of $2.1 million,
the staff report said. The fee, then, assumes estimated gross proceeds of $83.8 million. That means the purchase price, when adding in anticipated closing expenses, is pegged at nearly $84.4 million.
Port commissioners had no objections to the transfer of the valuable asset. They also commended staffers for their part in securing millions for the agency.
“Safe Harbor is a well-known operator,” Commissioner Dan Malcolm said. “They’ve got the ability to make capital improvements. It’s good for Sunroad, good for Safe Harbor and good for us.”
Sunroad has also agreed to sell Safe Harbor its leasehold for the easternmost tip of Harbor Island — home to popular waterfront restaurants Island Prime/C Level Lounge and Coasterra — with that transaction expected to go before port commissioners at a future meeting, port staff said.
Sunroad and Sun Communities did not respond to requests for comment. Safe Harbor and its parent company already have four leases of port tidelands, including the Shelter Island Boatyard and the Sun Outdoors RV resort in Chula Vista.