Carlsbad will get six acres of seaside property in a deal the City Council reached Tuesday with San Diego Gas & Electric Co. and Cabrillo Power stemming from the city’s 2014 agreement to allow construction of a coastal power plant.
The transaction gives Carlsbad a small park that the city has leased for years from SDG&E at Cannon Road and Carlsbad Boulevard. The city also will get land now occupied by SDG&E istrative offices and a parking lot next to the Cannon Park, as well as other property at the edge of the ocean and Agua Hedionda Lagoon.
“I know it’s been a lengthy process, and I’m thankful that we’ve been able to find some sort of a solution,” said Councilmember Priya Bhat-Patel.
“This is a big milestone,” said Jennifer Jett, vice president of operations for SDG&E. “I think we actually all walked away feeling really good about the outcome.”
The deal stems from a 2014 settlement in which Carlsbad dropped its legal fight against the construction of a more fuel-efficient power plant nearby on the property to replace one SDG&E built in the 1950s. City officials said the coastal location was inappropriate for another power plant. Negotiations of the details have been underway since then.
In the original deal, Carlsbad was to get up to 16 acres including the entire space occupied by SDG&E’s north coast service center, if another suitable location for the center could be found. More than a dozen sites were considered, all eventually ruled out.
SDG&E and Cabrillo in 2023 proposed a reconfiguration of the existing service center, moving parts of it closer to the railroad tracks to free up a smaller piece of property near the ocean for the city. Acceptance of the deal, known as “the seaside option,” avoids a requirement in the 2014 agreement that specified Cabrillo would pay the city a $10 million “consolation prize” if no alternate site were found for the service center.
Carlsbad City Attorney Cindie McMahon said the agreement reached Tuesday was one of the most complicated she’s ever worked on, with additional hurdles remaining to finalize the property transfers, but that it offers incentives to all the parties involved to achieve the goals laid out.
Former City Attorney Celia Brewer, who retired in 2022, was widely credited as a key figure in the original agreement that, along with the anticipated property transfers, secured the city’s request to remove the old Encina power plant and its landmark 400-foot-tall smokestack.
The city recently opened its temporary Fire Station 7 on part of the site where the former power plant has been demolished. City Council have discussed the possibility of building a permanent fire station there.
Also, the city will get land along the western side of Carlsbad Boulevard north of the Terramar neighborhood, and on the northern shore of the outer portion of the lagoon that includes a grassy, blufftop viewpoint.
Another benefit for Carlsbad is an amendment to the city’s Hub Park lease for public access to hundreds of brush-covered acres owned by SDG&E on the south side of the middle and inner parts of the lagoon, where the city will build hiking trails and a trailhead parking lot. SDG&E will contribute $1 million for the city to develop the Hub Park trail system.
Access to the trails will include two pedestrian tunnels already installed beneath Cannon Road, one at Armada Drive and the other west of there. The tunnels were filled in soon after construction and left in anticipation of the future trail system.
The deal requires environmental reviews and approval from the state’s Public Utilities Commission and the Coastal Commission.
The first of the property transfers will take place after receiving all the agencies’ approvals, which could take up to five years, said Gary Barberio, deputy city manager, community services.
Carlsbad will receive the last of its properties, the site of the istrative offices, after the new building is finished in about seven years, said Barberio, who’s been involved in the the city’s talks with the utilities since about 2013.
All costs of the arrangements will be paid by the two utilities companies at no expense to the city, Barberio said.
Still undecided is what will happen with the largest portion of the site formerly occupied by the old power plant. That property is owned by NRG Energy, a subsidy of Cabrillo Power, the company that built and operates the new power plant.
NRG is looking for a partner to help develop the power plant site in a way that meets the city’s zoning and guidelines, company officials have said. A hotel is among the possibilities floated in recent years.
Carlsbad’s general plan allows “visitor-serving commercial and open space uses” on the site, according to the city website.
