Carlsbad strikes landmark deal with SDG&E, NRG

Carlsbad agree to agreement with SDG&E, NRG after 12 years of negotiations to gain lagoons, frontage, park space and trail access — but full transfer could take years

The city of Carlsbad would acquire nearly 6 acres of land on the north shore of Agua Hedionda Lagoon in a deal with San Diego Gas & Electric and Cabrillo Power during Tuesday’s City Council meeting. Steve Puterski photo

CARLSBAD — It has been a long time coming.

After 12 years, the city of Carlsbad, San Diego Gas & Electric and NRG Energy, and its subsidiary Cabrillo Power LLC, have agreed on a land settlement for property on Agua Hedionda Lagoon and along Carlsbad Boulevard and Cannon Drive. The city and two energy companies have been haggling since 2013 over the deal, now known as the Seaside Agreement, but the City Council approved the deal during Tuesday’s meeting.

The deal will see the city take ownership of more than 5 acres at the site of SDG&E’s North Central Service Center along Cannon Drive and Carlsbad Boulevard, Cannon Park, the middle and inner lagoons, 5.7 acres of land on the north shore of the lagoon and more, according to Carlsbad Deputy City Manager Gary Barberio, who has worked on the deal since 2013. SDG&E will move its operations center to the east side of the property in a land swap with Cabrillo, while a new trail system will be constructed just east of the Carlsbad Strawberry Fields property on what is known as Lot 11.

Should the deal fall through, Cabrillo will pay the city $10 million. In addition, Cabrillo would convey to the city irrevocable offers of dedication for ownership for the inner lagoon, middle lagoon and bluff lands and give the city ownership over the Carlsbad Boulevard land fronting Cabrillo’s property if a title report from a nationally recognized title company shows Cabrillo owns the property, Barberio and the staff report said.

“I’m very excited to be here on this item,” Barberio added. “It’s been a long road to get to this point. “There is a whole bunch of work that needs to happen to get the land to the three parties. We need to make sure there isn’t a fatal flaw and then engage in the heavy lifting of the agreement.”

The deal became effective on Wednesday, but there are still major steps ahead for final approvals, he said, including a 180-day due diligence period.

The last time the City Council was updated on the item was in December 2023. Since then, the three parties met nearly every week to hammer out a deal, Jennifer Jett, vice president of operations support for SDG&E, said.