HomeFed, a Carlsbad-based development company, has pulled out of its agreement with the Port San Luis Harbor District to build the Harbor Terrace development — leaving the district on a tight time schedule to get it started.
The project calls for creating 184 camping units on 32 acres, including tent camping and recreational vehicle spaces. It would be built next to the entrance to Diablo Canyon nuclear power plant.
In a letter to the district, HomeFed terminated its development and lease agreement to build and operate the $20 million campground project. The district’s Board of Commissioners will discuss the project and consider possible next steps when it meets Tuesday at 6 p.m. at the harbor’s Coastal Gateway Building.
HomeFed President Paul Borden said Monday he would not discuss the reason for backing out of the deal. Harbor Manager Steve McGrath said the company determined that the project would not be economically viable given the amount of excavation and environmental remediation required by San Luis Obispo County and the California Coastal Commission.
Never miss a local story.
“The district is disappointed with the setback, but we are still confident that we have a great project,” McGrath said.
McGrath is recommending that the district request an updated proposal from another development company that submitted a bid to build the Harbor Terrace development, Red Tail Acquisitions of Newport Beach. The harbor commission selected HomeFed’s bid over Red Tail Acquisitions’ bid in December 2014.
However, the setback leaves the district on a tight time schedule. The development permit requires that the construction of the project begin by June 24, 2017.
“I still think we are good, but it is certainly significant that we’ve lost this time,” McGrath said.
The Harbor Commission could also opt to invite proposals from other companies that showed an interest in the project or issue a request for new proposals. Requesting new proposals would add six months to the process, McGrath said.