Edition: August 2006



The Navy’s Last Best Chance Downtown

Admiral Hering on a new 300,000-square-foot
corporate headquarters and why a world-
class development is good for San Diego








Behind Adm. Hering, the ‘Navy Mayor of San Diego,’ is the decades-old headquarters of the Navy Southwest Region that will be demolished as soon as a new tower is built about 800 feet to the southeast. (photo/lambertphoto.com)

Navigating civilian bureaucracies is tough duty for some, but Rear Adm. Leendert “Len” Hering Sr. served as combat systems officer aboard the USS Fahrion, later commanding the USS Aries and the USS Doyle, which was a member of the Vinson Battle Group in Desert Strike.

So living now as the “Navy Mayor of San Diego” atop Point Loma with his wife and youngest son, and commuting each work day around San Diego Bay to the command of the Navy Region Southwest at the corner of Broadway and Harbor Drive, are not the toughest duty Hering has faced. When he took command last year, he inherited a redevelopment process that was just beginning to move at high speed following years of going nowhere fast. Ground should break for a new Navy office tower early next year.

Metropolitan: Admiral Hering, what is your favorite fish?

Mahi-mahi, with grouper being a close second. I like them blackened, in which case it’s a tie.

Please explain the historical significance of the Navy rebuilding at this location. What are the modern maritime and land-use merits of this location and its proximity to the bay front and mass transit?

The United States Navy has played a historic part of San Diego since 1846 when the USS Cyane, under the command of Samuel F. Du Pont, raised the flag over San Diego. The Broadway Complex we have today continues to play a large role in supporting the war fighter, our primary mission. Historic significance is important, however; the most important factor in rebuilding is providing a state-of-the-art 21st century office complex for operations. As stewards of the federal taxpayer dollar, we are chartered to manage every asset and dollar Congress allocates to us in the most efficient and effective manner.

Congress and the Secretary of the Navy realized the value of implementing this development opportunity and provided the legislation authorizing us to enter into this lease agreement. Through this arrangement, we are able to get a 300,000-square-foot building constructed using the value of the property — resulting in a significant savings to the federal taxpayer. What’s unique about this project though is that different from virtually every other development project, the city of San Diego stands to reap $20 million-$21 million per year in tax revenue, and citizens and visitors gain access to a new destination. This is an exciting project that will be remembered as a historic deal for the Navy and the city of San Diego.

What’s it like to work with Doug Manchester and Perry Dealy?

Despite what people may have been led to believe, we have a wonderful working relationship with both gentlemen. Negotiations have been rigorous and we’ve worked hard to secure a good deal, but then efforts of this magnitude are never easy. The entire team has been very instrumental in the design of the Navy building and the structure of the lease agreement.

How much time do you spend on this project, say, per week? Who are your top colleagues attending to this project, and what kind of a job are they doing?





Pictured here in his second-floor office at the Broadway Complex, Admn. Len Hering, says the developer has created more park space by moving underground parking the 1992 deal allowed above ground. (photo/lambertphoto.com)

I have both of my most senior staff members working this project every day. Capt. Mike Allen, my Chief of Staff, has attended every meeting with CCDC and is a member of the Core Team developing the structure of the lease agreement. Mr. Rene Trevino, my executive director —who also happens to be an architect — is involved on a daily basis regarding the design of the Navy building. Both are doing a wonderful job. We have some of the best real estate development and financial experts in the Navy’s team working this project. The Secretary of the Navy himself has a very active interest in getting this right.

What do you think of the job Mayor Sanders is doing, in general, and with regard to this project? What do you think of all the public hearings and hoop-jumping CCDC has created?

I truly respect and appreciate Mayor Sanders’ support of this project. I fully realize he has incredible challenges before him and I admire the job he is doing. I can assure you he understands the complexity of the project and has openly supported the requirements crafted by the city in the development agreement. The public hearings and what you call “hoop-jumping” by the CCDC are really a necessary and deliberate process of what needs to occur as we look for consistency. Let there be no doubt, Manchester Financial is a very capable organization and this is a very complex development. CCDC is just taking some extra time to make sure they are covering all their bases. These hearings and reviews by the CCDC board are necessary and vital to ensure this is not simply a rubber stamp. They are a positive aspect of the project’s review.

Are you satisfied with the amount of “open space” being allocated in the project?

We are very satisfied with the amount of open space allocated in the current design. If it weren’t for this very important development agreement we could have easily built our new office space and, as in the past, closed off the entire site to the public. Much as it is today. The current plan provides for 45 percent of the entire site to be open-air space. It protects view corridors and provides for numerous opportunities for people to enjoy, work and enjoy a portion of the city’s waterfront that has been blocked off and restricted from public use for over 80 years. It provides for nearly 24 acres of underground parking and a world-class development that will attract new businesses and visitors to Downtown.

After meeting the Navy’s office and parking needs, did you invite Manchester to develop whatever else he wants, as long as it conforms with the existing land-use plans and meets local muster? Or did you specifically direct him to develop the balance with so much office, condo-hotels, retail, etc?





Looking north at the planned Manchester Pacific Gateway, the G Street Mole, aka Tuna Harbor, is in the bottom left corner. The southern half of the project in the foreground would be built first.

When we began this process, we wanted to make sure that the 1992 Development Agreement we had in place with the city of San Diego was the principal guideline used for the development. In 2003, we modified the Development Agreement with the city of San Diego’s approval. Every entity that submitted a proposal had to comply with the 2003 Development Agreement and the Manchester proposal met that criteria and continues to do so with the changes that the city of San Diego has asked them to incorporate. The biggest challenge for each of the responders was to make the development pencil out. Manchester’s current proposal meets the 2003 Development Agreement and makes it profitable for all three parties. The entitlements defined what could be developed; they did not mandate what was to be considered a necessary end state. Much of what has become open space under the plan being considered today is possible because Manchester Financial moved much of what was entitled above-ground parking below grade, thereby creating more open space and more public access at the curbside.

Would you or could you direct Manchester to convert one or more of his planned condo-hotels into office buildings in order to increase the attractiveness of the area to defense contractors and other suburban office users who could be lured to the Central Business District with its proximity to the Navy and mass transit? If not, why not?

I’m glad to finally see a question that focuses on the development rather than the developer. I will tell you the Manchester Financial Group doesn’t need my help to figure out how to make this development work aesthetically, economically or architecturally. Nor should I offer that unsolicited direction; that’s why we picked them. They have hired some the best world-class architects and planners available and everyone involved understands the importance of this site. The business community in general and particularly the defense industry in San Diego is watching what is unfolding and they understand what is happening here. The market is ripe and the Manchester group is ready to build a complex that will entice highly skilled professionals to move Downtown and set up office space in these new buildings. This project can and should be viewed as an economic magnet.

The Union-Tribune suggested you needed to relocate to the 32nd Street station for security reasons. Can you comment on the Navy’s ability to develop secure facilities in urban and visible locations?

I’d like to answer this one in two parts. First, Naval Base San Diego, known to many as 32nd Street, is the site for two very large initiatives affecting the Navy and San Diego. One of the BRAC 2005-approved actions is the closure of Naval Station Ingleside Texas and the relocation of the Mine Counter Measure Command and ships from Ingleside and Corpus Christi Texas to Naval Base San Diego. This action, which will be implemented beginning next year, will bring 10 ships and over 1,200 personnel to Naval Base San Diego and Naval Base Point Loma. This year the Chief of Naval Operations made a decision to homeport the new Littoral Combat Ships, again at Naval Base San Diego. Beginning in 2008, eight Littoral Combat Ships will be homeported at Naval Base San Diego. With these new mission requirements and the current operations, Naval Base San Diego property is required to support these operational units. With these requirements, there isn’t ample real estate at Naval Base San Diego to house over 300,000 square feet of administrative space.

The second part of that answer is we have operated here without jeopardizing safety or security for more than 80 years. The force protection measures would have to be built into the building no matter where we locate it. Truth is we need to do business in the public sector. Our presence there is necessary to be centrally located and connected with those customers we do business with.





The proposed site plan that exceeds the amount of open space called for in the Navy's agreement with the city of San Diego includes a park larger than a city block at the bottom left corner, at Broadway and Harbor Drive, where the Navy's old headquarters now stands. Beneath this caption would be San Diego Bay.

We have been working very closely with the Manchester Group regarding the design of the Navy building and I am very confident that we will have a very secure building within the complex, not any different than the federal courthouse Downtown. In fact, I have personally reviewed the exterior design features and you will be pleased with the proposed landscape layouts surrounding the Navy building.

Are office views of the waterfront inspirational, and do you suspect such views improve productivity?

Absolutely! Our personnel are not any different from those who work in the many high-rise office buildings Downtown. They are very dedicated and professional in their work. They are also very patriotic. When you look out the window everyone will see whom we support, the men and women who wear the uniform of our country.

What kind of synergy can you create with the Midway Museum and the Maritime Museum?

We have synergy today with the Midway Museum and the Maritime Museum. Don’t forget, the USS Midway is still in the U.S. Navy inventory in an inactive status and that it was the Navy who transferred the pier to the Port of San Diego so the USS Midway could be placed where it is today. With the addition of the museum facility as part of this development project, there will be greater synergy and a tie between the Navy’s historical role in San Diego and the city’s present and future maritime role.

As far as the office space, well, I’ll probably never call it my own but my relief can certainly thank me for it.


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