On Top of Downtown — a conversation with Doug Manchester
By Andrea Naversen | Photography by Vincent Knakal
Posted Sept. 28, 2016
Few developers have shaped the San Diego skyline as much as Doug Manchester; the Manchester Grand Hyatt, the San Diego Marriott Marquis & Marina, the San Diego Convention Center, the Fairmont Grand Del Mar are just some of the properties that bear his mark, and often, his name. Manchester, who likes to be called Papa Doug, is now developing the Manchester Pacific Gateway, a $1.3 billion waterfront project on downtown’s North Embarcadero. Considered to be the biggest and costliest private development in San Diego history, the 14-acre site, south of Broadway between Pacific Highway and Harbor Drive, will include hotels, offices, shops, and a new regional headquarters for the U.S. Navy.
The project, which eventually will raze eight blocks of old buildings, has been decades in the making. Manchester reached a deal with the Navy in 2006, agreeing to provide a new headquarters building at no cost to taxpayers, in return for the right to develop the waterfront. Various legal challenges ensued. Opponents argued the plan was too big, and that the waterfront should be preserved. Supporters claimed the development would revitalize the downtown waterfront, attracting residents and tourists and generating millions in hotel, sales, and property taxes. Last spring, in what could be the last legal hurdle, a federal appeals court ruled 2:1 in favor of the complex.
Ranch & Coast met with the developer recently in his 19-story office high atop the Manchester Financial Group (the former Sempra Headquarters) at Ash and First to talk about his latest project, his dreams for downtown, and his response to Republican presidential candidate Donald Trump’s comments suggesting Manchester’s involvement in building Trump’s proposed border wall.
You have been a developer for decades now with a special interest in downtown San Diego. What is your vision for the city?
Very simple: live, work and play. [This is] one of the great cities in the world to do that.
Give us some details about the Manchester Pacific Gateway, the proposed hotel, office, and retail destination.
There’s a million and a half square feet of office and a million and a half square feet of hotel, including a 1,100-room hotel, a roughly 400-room hotel, and all the related shop and support facilities that we had at the Hyatt and the Marriott.
This would link the waterfront to downtown’s Central Business District? That’s important?
It really is, those buildings have been there…I used to sell papers at the Coronado Ferry when I was ten years old in 1952…at that time I would go by these buildings. They need to be ripped down, and the entire front porch of San Diego needs to be dressed up and redone.
This was initially called the Navy Broadway Complex, and as I understand it, you had a deal with the Navy: you would be allowed to develop the area for offices, hotels, and other features and the Navy would get a new headquarters building. So where do things stand with what is now called Manchester Pacific Gateway?
All litigation has been completed. Isn’t that great? So it’s only 11 years’ worth and $30 million, but it’s all been completed. That’s the good news. But now of course the hard work starts, and that is the fact it’s $1.3 billion worth of cash that needs to be spent to complete the project. We are in the process right now of assembling that. It’s a very complex project. We have proposals out to many lenders and equity participants and we’re in the process of raising the money right now.
So how does that work? You kick in some cash —
We were expecting you to write a check (laughter)
Q: I wish! If I could, I would be sitting there (points to Manchester’s seat). How does financing the project work?
It’s a very complex project. We have proposals out to many proposed lenders and equity participants and we’re in the process of raising the money right now.
So, in essence, you plan the project, develop the project and now you are lining up financing for the project?
Yes, and we have been doing that for several months.
So when do you think you will break ground, and when do you think it will be completed?
It’s a three-year project and we’ll break ground by the end of the year. “Breaking ground” has many connotations. We have to demolish a lot of the buildings that are on the property and we have to build a 3,000-car parking garage underneath the property.
What details of the project are you especially excited about?
It’s one of the most outstanding properties and proposed projects in the world.
What about public access and amenities?
We also have a linear retail shopping area that goes right through the project and connects into Seaport Village. So it will be a dynamic “live, work, and play,” with the opportunity to shop right there.
You mentioned Seaport Village. I have read that is one of the projects you would like to see for San Diego as well as the redevelopment of Civic Plaza, the Civic Theatre, Horton Plaza, and new City Council offices. Will you have a hand in those?
We made proposals for that. The Port District currently is studying those proposals and has selected another person to carry that vision forward and we look forward to working with them.
You sold the business portion of the U-T (now the Union-Tribune) for $85 million. You had long proposed to build an apartment project on that site (in Mission Valley). What’s the status of that project?
I sold that property to Casey Brown, a talented young developer. He’s carrying forward with those plans to renovate the entire buildings there — there’s about 300,000 square feet of office and I planned 200 apartments down there. I have a minor role in that still. It’s Casey Brown’s project. He is fulfilling that vision.
Of all the projects you’ve been involved with — the Manchester Grand Hyatt, the Marriott, the Grand Del Mar (now the Fairmont Grand Del Mar) the list goes on and on — what are you most proud of?
I’m most proud of maintaining the Spanish-Renaissance architecture and 30 years’ worth of work at the University of San Diego because there was a time when they wanted to depart from that and build more contemporary buildings to save money. I held the line to keep the homogeniality of the Spanish Renaissance architecture.
Truly a beautiful campus, but you went to San Diego State.
I couldn’t afford to go to USD. (Laughter) But we created many scholarships for people who have gone to the University of San Diego. I would have gone to the University of San Diego had I not worked my way through school.
So how did you work your way through school?
We had a numerous number of jobs, working through San Diego State, the last of which was in the insurance business, which I transitioned full time into upon graduation, and then went from there into real estate, medical instrumentation, telecommunications, publishing and the like.
So you’re a self-made guy?
Well, through the grace of God.
Is that the fun part for you — coming up with the idea for a project, developing and nurturing it, and then going on to the next challenge?
That’s what I do.
What drives you?
(Chuckles) Three children under two.
Manchester has six children, with two more on the way, and 13 grandchildren.
You worked your way through school; you’ve had immense success in your field. It’s got to be more than kids. There has to be a fire in the belly. What is it? Where does it come from?
I just like contributing to a great community of which I’ve been blessed to grow up in. I believe very, very strongly that San Diego is definitely America’s Finest City, and I feel very privileged to be part of that, and to have done a lot of things to, hopefully, leave a mark, a positive mark.
I am not suggesting you are going anywhere anytime soon, but how do you want to be remembered? What mark do you want to leave?
(Laughter) I have always said, that my whole mission in life is to make positive memories.
We have to talk about Donald Trump. I know you are a big supporter of Donald Trump for president. Why?
You ask me why Donald Trump. Simply stated is that he is one of the smartest guys I know and he has the biggest heart. And he has the ability to be our first true capitalist as President of the United States. And as Mike (Trump’s running mate Mike Pence) pointed out, ‘You can’t fake children.’ He has some of the most beautiful children — smart, articulate, patriotic children than anyone could ever ask for or be blessed with. That, for me, speaks volumes of the man. His son Donald referred to him as a “blue collar billionaire.” He goes out there and gets with it. He’s not sitting behind a desk. He has more energy than anyone I have ever met…he’s everywhere. The guy is just amazing. He’s got so much energy. He sleeps 4 or 5 hours a night. Voracious reader. Quick study. People absolutely love him, as do I.
You have said that Donald trump is a deal maker. But are his deals always good deals, especially for America?
This is what’s beautiful. Remember this: two words, and two words only: good deal, good deal. He sums it up. He says ‘Papa Doug — this free trade, fair trade, whatever it is. You can throw all that out the window. It is summed up in two words. Good deal.’
And you think he can get a good deal for America?
Absolutely. But right now we have the Chinese cheating. Everybody in fact cheats on this free trade, fair trade, whatever you want to call it. All he wants to do is, in fact, modify it so it’s a good deal and a good deal. The definition of a good deal is it’s gotta be a good deal for both sides. It cannot be one-sided. We can’t continue to, in fact, pay for the defense of the entire world. We can’t continue, in fact, to be taken of advantage of, which has been the case over the last 50 years.
You have said that we have the opportunity to elect a true capitalist to the White House, that he would run the country like a business. But his own business dealings have been marked by bankruptcies and conflicts of interest.
That’s not true. First of all he’s never gone bankrupt personally.
But his companies have.
There’s a big difference. If you invest in a casino and you have a downturn in that casino and that’s a free-standing investment. He would maybe lose his equity and some of the lenders would lose their equity. Reorganization, that happens all the time in business.
What he’s done, you say, is not out of the ordinary.
Yes, that’s true. The bottom line is that where the rubber meets the road, the guy is worth over $10 billion, has created thousands and thousands of jobs while his opponent has made $140 million over the last seven years by selling access, who hasn’t created one new job and has been in the position that she’s taken advantage of her position as a government employee. Then she gets $21 million worth of free jet travel, she’s had all these favors granted, she’s basically sold access.
You’re speaking of the Clinton Foundation, but I would like to move on.
When Donald Trump was in town, he suggested, and apparently it was off the cuff, that you might build a wall between the U.S. and Mexico to stop the tide of illegal immigrants, but if Trump is elected will you help him build a wall at our border?(Chuckling) Of course I will. I will do everything I can to help him as he carries out the duties of President of the United States. But he will not need my help. That wall will be built and it will be built expeditiously and Mexico will in fact pay for it. People don’t believe that, but it’s so easy to exact that. Yes, it will be paid for.
According to news reports, Mexican President Enrique Pena Nieto says Mexico will not pay for Trump’s proposed wall.
If the wall is built — and you sound pretty emphatic that it will — will that be good for San Diego’s economy?
But how so?
First of all, through technology, you’re going to have even faster access in and out of Mexico with people carrying out legitimate business but you’re also going to protect the United States workers from illegal workers coming here. And the other thing: do we have a country or do we not have a country? Now to me if you have a country, you have a border, and people are not allowed to go in that country unless they have permission, OK? It’s as simple as that.”
I have been told you are fiercely competitive in everything you do — from business to sports. So where does that come from?
From my mother.
(Laughter) Yes? Your Mom?
She was still parachuting at 90.
You’re kidding! She was parachuting?
She was behind my boat on a parasail.
Did you grow up in a big family?
I was the youngest of three brothers, one of whom is still living, the other is deceased. So obviously I had to fight to get my proper portions at a meal.
So you were the baby. Did your family come from money?
No, my father and mother ran away with each other at 17 from the East Coast, Connecticut. They came out here to work during World War II in Los Angeles factories that were building aircraft. My dad got a job here in Chula Vista at Rohr Aircraft. After the Korean War ended, he was laid off and got a job managing an apartment complex in Pacific Beach and I went to school with all the rich kids in La Jolla. I met some wonderful people out there and thought it would be nice to someday go back to La Jolla and live. It was a goal and I achieved that goal. It was wonderful.
Thank you for the interview. Is there a point you’d like to get across?
My point is that we live in the greatest country in the world, and we live in the greatest city in the country but we are at a crossroads right this very election. And if you believe that Obama has done a great job, you should vote for Hillary because it will be more of the same. But if you have questions as to the future of our country — the debt that’s been created, the unfair trade deals, the immigration policies, and the Obama care which has — you’ve probably experienced yourself a huge increase in your medical costs. All of that can be changed for the better with new leadership.
So you’re voting for change?
Yes, but a lot of people voted for change when they voted for Obama. As a result, they got pocket change. Under Ronald Reagan, you had Johnny Cash, you had Bob Hope and Steve Jobs. Under Obama I like to refer to the fact we have no jobs and no cash and no hope. That’s my opinion. Obviously, I’m not a big Obama fan.