Progress Park, across from San Diego Bay at RaDD project, opens to the public

The block opposite San Diego Bay at the corner of Broadway and North Harbor Drive, formerly home to a dated Navy office and warehouse building, is now a 1.5-acre waterfront park.

Monday, San Diego-based life science real estate investment firm IQHQ removed the fences surrounding what it’s calling Progress Park, a public amenity designed to complement the firm’s adjacent 1.7 million-square-foot Research and Development District.

The park’s quiet debut brings to fruition what was envisioned in October 2021, when the city of San Diego relinquished its rights to lease the block from IQHQ and instead entered into a contractual arrangement with the company for a 96-year term. The agreement obligated the developer to design and construct the park at its own expense. IQHQ is also responsible for providing park maintenance, management and security through May 31, 2117.

Progress Park is the punctuation point on IQHQ’s $1.9 billion RaDD project at 925 Waterfront Place. RaDD includes five lab and office buildings with ground-floor storefronts — including one 17-story tower — on six blocks of downtown real estate south of Broadway between Pacific Highway and Harbor Drive.

“We just felt like the project was in a good place. The activity has been really good. Security has been going really well for us. So we thought we would get it open now and start getting foot traffic and activity through the park,” IQHQ co-CEO Tracy Murphy told the Union-Tribune. “It’s additive to the community. The (project’s) artwalk goes right through it. You can get north to south, from Seaport up to Waterfront Park and the Intercontinental.”

A mostly passive park and plaza space by design, Progress Park includes multiple lawn areas, grassy amphitheater-style seating and a sculptural pavilion. The park space is designed to accommodate a variety of activities, including large concerts and festivals. There are, however, no permanent buildings or restrooms.

The park’s most arresting feature is the sculptural art piece, called Shhh Pavilion: The Hopekeeper. The piece is described as a funicular structure designed to resemble a shell covered with barnacles. It is one of 19 contemporary art pieces featured throughout the RaDD project’s artwalk.

Murphy said the developer expects to soon introduce furniture, provide occasional pop-up shops and offer programming such as outdoor fitness classes or movies. There are also parking spaces for food trucks along Harbor Drive.

The park block sits at the northwest corner of the former Navy Broadway Complex, a 12-acre site between Pacific Highway and Harbor Drive. In September 2020, IQHQ acquired the leasehold for most of the federal land from Manchester Financial Group, paying $230 million for an 8.7-acre portion of the complex. Shortly thereafter, the firm also bought from Manchester the block that it has since turned into Progress Park.

The open-space park is a requirement of a 1992 development agreement between the city and the Navy. The legal accord also entitled the city to lease the park block at no cost for 65 years. In May 2021, IQHQ offered the city a no-cost lease for the site, as required, but San Diego turned down the offer in favor of entering into an easement, use and maintenance agreement. At the time, council members, who approved the deal, framed the decision as a way to get a world-class park free of charge.

IQHQ’s agreement with the city requires the park to be open to the public from 6 a.m. to 10 p.m. daily. The firm, however, is able to program the park and issue for-charge permits for private events. The agreement includes limitations on the frequency and length of small, medium and large events.

The park’s opening comes as the RaDD project slowly comes to life. Half of the project’s 200,000 square feet of retail and amenity space is leased, with Rivian and The Shade Store already open for business. Upscale gym Equinox is on track to debut before the end of the year, Murphy said.

But the project’s research buildings — offering 1.5 million square feet of office and lab space — are largely empty. In May, the nonprofit J. Craig Venter Institute, JCVI, signed a long-term lease for 50,000 square feet of space.

Murphy said IQHQ is in talks with additional prospective RaDD tenants. The firm, she said, is currently building out some spaces for life science and office tenants, on a speculative basis, to create move-in ready suites that range in size from 10,000 square feet to 40,000 square feet.

IQHQ also last week closed a $310 million financing round to fund company operations, as well as pay for remaining construction work at its projects, Murphy said.

The latest round included a substantial contribution from Innovative Industrial Properties, a cannabis-focused real estate investment trust co-founded by Alan Gold. Gold was also the founding chairman of IQHQ.

Innovative Industrial Properties made an initial investment of $105 million on Oct. 1, primarily as a revolving credit facility, essentially offering a loan with flexible payment terms. The company has said that it will invest up to $165 million more in IQHQ by purchasing preferred stock between the end of 2025 and the first half of 2027.

Innovative Industrial Properties said in a news release that it expects to earn a weighted average interest rate of more than 14% per year on the investments. The transaction, Gold told his investors in August, also provides the firm with the right of first offer, meaning the company will have the right to buy IQHQ properties if they are ever offered for sale.