The San Diego Unified Port District finalized its choice of two developers for the East Harbor Island project last week. OliverMcMillan and Sunroad Enterprises will replace old rental car lots that occupy 57 acres with a mix of commercial uses. Both developers had submitted plans for redeveloping the entire East Harbor Island site.

The port had favored OliverMcMillan’s $978M proposal, which included 1,500 hotel rooms, retail and office space, canals and water taxi stations. But Sunroad reminded the board that it had already approved Sunroad’s proposal for 325-room hotel on nine acres of the site, which will be considered by the California Coastal Commission in May. Port commissioners asked OliverMcMillan to revise its original master plan to exclude Sunroad’s portion of the site and work out a way to coordinate infrastructure and design and return for the board’s approval, the San Diego Union-Tribune reports.

The port also abandoned a plan for a new $44M headquarters on the Harbor Island site, but tentatively approved building a new $10M harbor police headquarters on the peninsula opposite San Diego International Airport. The port’s decision was based on an analysis by JLL, the port’s real estate adviser, which suggested the highest and best use for the site of the present port building is a parking lot, which could generate about $20M in rent over 40 years. JLL's assessment found replacing it with other commercial uses would generate less revenue.

A new harbor police headquarters, on the other hand, made sense, according to JLL, because the current harbor police facility is on a prime piece of land on Shelter Island that could accommodate a 150-room hotel and 10K SF restaurant, which would generate up to $27M over a 40-year period.