San Diego’s efforts to cement its long-term control over Liberty Station have hit a snag that could force the city to sell the leafy complex of public parks, artist studios, restaurants and shops just east of Point Loma.
The city must get several local school districts, community college districts and health districts to agree to payouts as part of a complicated process required to retain control of former redevelopment agency properties.
Eight of those 14 agencies have recently agreed to Liberty Station payout offers from the city — but the San Diego Unified School District board is raising questions and voted unanimously last Tuesday to delay any decision indefinitely.
That vote came after the board was lobbied by the private company that manages much of Liberty Station to reject the city’s $1.4 million payout offer, contending the payout should be closer to $10 million.
City officials say the management company, Seligman Properties, is disingenuously trying to scuttle the deals so the city will be forced to sell it Liberty Station at a substantially deflated purchase price.
Because Seligman already controls 330 acres of Liberty Station’s commercial areas under no-rent leases that run through 2070, city officials contend it wouldn’t make sense for any other company to bid against Seligman — limiting how much the city can get.
But some San Diego Unified school board members expressed skepticism last week about the city’s payout offer, which the board pulled from the no-debate consent agenda so it could raise questions.
“It’s not that I don’t trust the city, but I don’t trust the city,” said trustee Sharon Whitehurst-Payne. “I’d like to pull it all and get some more information.”
Cody Petterson, another board member, said he’d like the board to confer with its legal counsel before making what could be an impactful financial decision.
People walk through Liberty Station on March 31, 2026, in San Diego. (K.C. Alfred / The San Diego Union-Tribune)
San Diego Unified would get by far the largest share of the city’s total Liberty Station payout to local agencies — nearly 44% of the money. That’s nearly triple what the county would get at 15.7% and far more than all other agencies.
Petterson conceded that he could use a refresher on the finer points of laws dictating the complex process of determining whether former redevelopment agency properties must be sold.
“I understand the nature of winding down redevelopment agencies in broad strokes,” Petterson said.
The key point of contention appears to be the city’s use of a 2011 valuation of Liberty Station to help determine the payouts. That’s standard practice in such situations because redevelopment agencies were dissolved the following year.
But Seligman officials say the school district should refuse the payout, which would force the city to sell Liberty Station and get offers based on a 2026 valuation — roughly $10 million versus $1.4 million.
“You need to be compensated current market value for that property,” said Joe Haeussler, who works for Seligman’s Liberty Station partner Pendulum Property Partners.
Haeussler said the city wants to control the property but is unwilling to pay market rate.
An attorney for Seligman, Bill Ihrke, told the San Diego Unified board it would be a mistake to deprive the cash-strapped school district of its fair share of revenues when it has no obligation to approve the proposed payout, formally called a compensation agreement.
“There is no legal obligation for a taxing entity to enter into a compensation agreement,” Ihrke told the board.
Officials in the city’s Economic Development Department, which are overseeing the effort to cement control of Liberty Station, did not make a presentation to the school board.
They declined this week to comment on the board’s decision to delay its vote indefinitely. A spokesperson for City Attorney Heather Ferbert also declined to comment.
In public documents, the city argues that “enriching Seligman to the likely tune of tens of millions of dollars, at the expense of taxpayers and the local and regional community who benefit greatly from continued use of Liberty Station as a community-serving public asset, would be a terrible public policy outcome.”
Seligman argues that the city’s insistence on maintaining ownership will cost it millions in tax revenue and lead to long-term deterioration of the site. The company says that without ownership and long-term control, it and the other leaseholders won’t invest in the property and won’t maintain it well during the later years of leases that run through 2070.
Sam Tribble practices on a Cyr wheel in Liberty Station on March 31, 2026, in San Diego. (K.C. Alfred / The San Diego Union-Tribune)
The city must compensate the school districts and other agencies because redevelopment law forced those agencies to give up tax revenues they would have otherwise collected.
In 2012 when the state dissolved redevelopment agencies, cities were required to categorize the properties they received from those agencies after their dissolution.
San Diego designated Liberty Station as a “future development” site instead of “liquidation” so that it could avoid selling the crucial site, which is located near the planned sports arena and NAVWAR projects.
But Seligman sued in 2022, contending that designation is bogus because redevelopment at Liberty Station “had already been completed and there is no ‘future development’ planned or proposed.”
In 2023, a court ruling said San Diego must keep making progress toward completing compensation agreements and then work on plans for future development of Liberty Station.
Since then, the city has gotten the property appraised and has been working on compensation agreements.
The agencies that have already approved compensation agreements are San Diego County, Lemon Grove School District, Grossmont-Cuyamaca Community College District, San Diego Community College District, Grossmont Healthcare District, the San Diego County Water Authority, Grossmont Union High School District and the city itself.
The San Ysidro School District board is scheduled to vote April 9.
The five agencies that do not yet have votes scheduled are San Diego Unified, Sweetwater Union High School District, Southwestern College, the San Diego County Office of Education and the Educational Revenue Augmentation Fund.