Pendulum Property Partners, a Southern California-based real estate firm, in partnership with The Seligman Group, has acquired a long-term leasehold on a number of properties in the 361-acre former Naval Training Center.
Pendulum acquired 327,000-square-feet of Liberty Station multi-tenant retail and office space. The property is approximately 98 percent occupied.
The seller, McMillin Cos., retains ownership of one hotel site, two hotels under construction and a number of office assets in the neighborhood. Additional property owners within Liberty Station include the NTC Foundation, the Rock Church, High Tech High and hundreds of homeowners.
“The ground lease has been transferred to The Seligman Group/Pendulum Partners as of Nov. 15,” said City senior press secretary Christina Di Leva Chadwick, who noted the sale amount was $158.98 million.
Pendulum’s transaction primarily consists of the retail components – The Quarter, South Point and Arts District – of Liberty Station’s master-planned development.
Alongside popular brands Trader Joe’s, Vons and Starbucks, Pendulum’s other anchor tenants include: Liberty Public Market food hall, Stone Brewing World Bistro & Gardens, El Jardín, Corvette Diner, Moniker General, Slater’s 50/50, a nine-hole golf course and a landlocked training ship of the U.S. Navy.
Pendulum will continue activation of Liberty Station common areas, as well as upgrading the tenant mix as leases expire.
“San Diego is one of the most diversified economies in the nation and offers many compelling investment characteristics,” said Kevin Hayes, Pendulum managing partner. “Over the past 10 years, countywide growth has outpaced both the state of California and the nation.
“Our investment strategy is centered around acquiring well-located assets with the potential to add value over time. Liberty Station fits perfectly within this strategy,” Hayes said.
The sale follows on the heels of an ongoing dispute over the possible conversion of historic North Chapel at Liberty Station into a restaurant/entertainment venue. North Chapel, previously used by sailors going off to war, is currently used by two Catholic congregations.
Arguing that the chapel site has been “underutilized,” Liberty Station developer McMillin Cos. previously told both congregations they would continue to be allowed to use the chapel until June. That deadline was later extended until Dec. 31.
Hayes said Pendulum has signed a lease with 828 Venue Management Co. to operate North Chapel. “[828 Venue] plan to continue to operate the North Chapel as an event venue, allowing for a wide range of community events throughout the week,” he said. “The venue will continue to be available for weddings, religious gatherings, performances, receptions, and a variety of other events, as permitted in the NTC Precise Plan.”
Noting 828 Venue Management Co. understands North Chapel’s historical significance, Hayes added, “They are committed to preserving the historical integrity of the North Chapel, and any tenant improvements that they propose will follow the Department of the Interior’s guidelines for the treatment of historic properties.”
Hayes added 828 Venue has reached out to both Catholic groups “to discuss the potential for these congregations to continue to hold their faith celebrations and functions at the North Chapel in the future.”
In a letter to The Seligman Group, Mayor Kevin Faulconer wrote: “While no formal application has been submitted to the City for review, I am seriously concerned about any alterations to the chapel’s historically protected characteristics. I oppose any plan that affects the historic nature of the North Chapel … City staff will continue to work proactively with The Seligman Group and the City Attorney’s office to ensure that the chapel remains open to the public and that any future use respects and maintains its historic elements.”
Congressman Scott Peters (D-52) and historic preservationists Save Our Heritage Organisation (SOHO), have both formally requested an investigation by the City Attorney into a commercial lease for the historic church.
“We are not giving up on our efforts to save the North Chapel and to encourage the City Attorney to investigate the dealings of the North Chapel and the NTC Foundation,” said Ron Slayen, a Liberty Station Arts District tenant who has been lobbying to block non-religious use of North Chapel. “There may be a new owner of McMillin's ground lease, but the underlying problems and uncertainty remain.”
In a memo to City Attorney Mara Elliott, Council President Pro ten Barbara Bry posed a number of legal questions, including whether the City has the authority to compel keeping North Chapel open to the public, and whether the chapel’s interior features can be removed or altered.
“We are researching the legal questions presented to us by Councilmember Bry,” said City Attorney spokesperson Hilary Nemchik.