A billionaire developer, a secretive 400-megawatt AI data center proposal, close ties to the Trump administration and a potential 99-year deal involving prime San Diego Navy land. What happened to the promise of thousands of homes, and could residents end up paying higher electricity bills? Our investigation uncovers troubling questions about the future of NAVWAR, including new responses from the developer, San Diego Community Power and the U.S. Navy.
San Diego was promised the possibility of thousands of desperately needed homes, parks, businesses and an entirely new neighborhood on one of the city's most valuable stretches of federal land. Now, a development team led by billionaire Doug Manchester has quietly explored building an enormous artificial intelligence data center that could consume as much electricity as hundreds of thousands of homes, with prospective financing discussions involving a firm founded by Donald Trump's former Treasury secretary and a potentially lucrative 99-year Navy land arrangement at the center of the controversy. The developer insists thousands of homes remain part of its plans and says no data center negotiations or agreements are currently underway.
The revelations have ignited controversy over the future of the Naval Information Warfare Systems Command campus, better known as NAVWAR, a sprawling 70-acre federal property along Pacific Highway near Interstate 5 and the Old Town Transit Center. They also raise uncomfortable questions about the developer's history, the reliability of its housing promises, the extraordinary infrastructure demands of the potential facility and how much the public actually knows about a redevelopment that could shape San Diego for the next century.
In January 2024, the Navy selected Manchester/Edgemoor LLC, a partnership involving Manchester Financial Group and Edgemoor Infrastructure & Real Estate, as the potential master developer of its 70.3-acre Old Town Campus. The contemplated arrangement would allow the development team to negotiate a deal to replace aging Navy facilities in exchange for long-term development rights to portions of the federal property.
The Navy's earlier redevelopment alternatives contemplated as many as 10,000 housing units, along with commercial development and a major transit center. Manchester's public presentations emphasized thousands of apartments, potentially including military housing, as well as hotels, restaurants, retail, parks and other amenities. Mayor Todd Gloria supported the redevelopment opportunity, which appeared to offer an extraordinary chance to address San Diego's housing shortage.
But behind the scenes, the development team was also exploring a dramatically different use for part of the property.
According to emails obtained by Voice of San Diego, Manchester Financial Group President and CEO Ted Eldredge contacted San Diego Community Power in November 2025 to discuss electricity costs for a potential 400-megawatt data center. The correspondence also referenced plans to meet prospective investors in Doha, Qatar, and subsequent discussions involving San Diego Gas & Electric and Liberty Strategic Capital, the private investment firm founded by former Trump administration Treasury Secretary Steven Mnuchin.
In response to questions from SanDiegoVille, San Diego Community Power confirmed that it provided preliminary electricity generation pricing estimates for a hypothetical project in November 2025 and again in May 2026. The agency said it has not heard from the developer since May, suggesting that discussions with the public power provider have not advanced in recent months. Community Power characterized its interactions with potential large customers as part of its responsibility to evaluate electricity procurement needs while keeping rates as low as possible for existing customers.
The electricity requirements alone are staggering. A 400-megawatt facility operating at full capacity around the clock would consume approximately 3.5 billion kilowatt-hours annually, comparable to the electricity usage of roughly 300,000 or more households, depending on average consumption. At an illustrative electricity price of 11 cents per kilowatt-hour, its energy purchases could exceed $1 million every day, before additional delivery charges and other expenses.
For a city already struggling with exceptionally expensive electricity, the prospect of accommodating a single private customer with the energy demands of a small city has prompted serious concerns about infrastructure costs and whether ordinary ratepayers could ultimately shoulder any portion of the burden.
But the potential electricity bill may be the least of San Diego's problems. The much larger question is whether the region's electrical infrastructure could accommodate a single private facility demanding 400 megawatts of power around the clock, what upgrades would be necessary, and whether residents and businesses already paying some of the nation's highest electricity rates could end up financing part of the expansion.
The proposed data center would require far more than an ordinary connection to the power grid. Depending on available capacity, accommodating such a massive new customer could require new substations, high-voltage transmission infrastructure, transformers and other equipment potentially costing hundreds of millions of dollars. No publicly disclosed engineering assessment has established the actual upgrades or costs associated with the NAVWAR concept.
According to Voice of San Diego, Manchester representatives requested an engineering study from San Diego Gas & Electric in March 2026 to determine what adding the proposed demand would require. In a written response to SanDiegoVille, SDG&E declined to confirm whether it had begun or completed an assessment, citing its policy of keeping discussions with specific prospective customers confidential. The utility did not identify any required upgrades, estimated costs or project-specific protections for existing ratepayers.
That leaves the public without answers about whether sufficient electrical capacity exists, how long necessary improvements would take, whether new generating resources would be needed or who would ultimately pay for them.
San Diego City Councilmember Sean Elo-Rivera has raised precisely those concerns, questioning whether customers already facing extraordinary electricity costs could be saddled with additional expenses to accommodate a billionaire developer's speculative computing project.
The distinction is critical. A data center operator paying its own monthly electricity bill does not necessarily mean it has paid every infrastructure cost associated with connecting the facility to the grid. Those costs depend on utility tariffs, regulatory decisions, the location of the project and the specific improvements required.
And the stakes extend beyond the initial construction expenses. If utilities build expensive infrastructure to accommodate a proposed hyperscale customer that ultimately abandons its project, significantly reduces its demand or never secures a tenant, someone must absorb the resulting costs. Without adequate financial guarantees, those stranded investments can create risks for other electricity customers.
California lawmakers have recognized the problem. On September 21, Governor Gavin Newsom signed a package of legislation intended to protect electricity customers from the costs associated with enormous data center loads, including Senate Bill 886, authored by Senators Steve Padilla and Jerry McNerney, and Assembly Bill 2383.
The laws establish new requirements addressing cost allocation, electricity procurement and financial protections. In a written response to SanDiegoVille, SDG&E also cited Senate Bill 1168 alongside SB 886 and AB 2383, emphasizing that the legislation directs the California Public Utilities Commission to establish rules intended to prevent large new electricity customers from shifting their costs to existing customers. Important provisions require additional implementation by the commission, including tariff development extending into 2028.
"Large new electricity users are expected to be responsible for the costs associated with serving their demand while protecting existing customers from unreasonable cost shifts," SDG&E Media Relations Manager Anthony Wagner told SanDiegoVille. He said the utility evaluates potential projects as part of normal business planning but does not approve or deny land-use proposals, which are decided by property owners and the appropriate government agencies. SDG&E said it would implement the new requirements through the CPUC's public process.
Those protections are significant, but they do not establish what Manchester or a future NAVWAR tenant would be required to pay under any particular service agreement today.
There is no publicly disclosed completed SDG&E engineering study identifying the upgrades necessary to serve the proposed facility, their estimated cost or the financial guarantees that would protect existing customers. SDG&E's response did not answer those project-specific questions.
That makes the developer's pursuit of preliminary electricity pricing particularly noteworthy. The public knows Manchester explored the potential price of electricity for an enormous data center, but it does not know the full infrastructure price of making that facility possible.
The proposal also raises questions about reliability and environmental commitments. A 400-megawatt facility could require substantial new electricity procurement arrangements, while backup systems might involve diesel or natural-gas generators with associated emissions. The actual effects would depend on engineering decisions that have not been publicly disclosed.
Correspondence reported by Voice of San Diego indicated that a commitment to using entirely renewable electricity was considered unlikely without input from a future hyperscale tenant. That response is especially notable because San Diego Community Power has established a goal of supplying 100 percent renewable electricity by 2035.
Perhaps the most revealing statement about the project's financial motivations came from Manchester's own chief executive.
"We're hotel developers. We're not in the data center space," Eldredge told Voice of San Diego. "We're just trying to figure out a lucrative way to build the Navy their building."
That admission goes to the heart of the controversy. Manchester Financial Group has decades of experience developing hotels and commercial real estate, but no publicly identified history of developing hyperscale data centers. The company is exploring an industry experiencing extraordinary investment and demand for computing infrastructure, even as questions mount nationally about whether every proposed facility will ever be built.
The Navy, meanwhile, has a legitimate need to replace outdated facilities housing thousands of personnel involved in military communications, cybersecurity and information warfare. Under the contemplated arrangement, the development team would construct replacement Navy facilities and receive long-term development rights to portions of the site.
The potential ground lease has been described as extending 99 years, although its final terms have not been publicly established and no unconditional agreement authorizing the proposed data center has been finalized.
Because the land belongs to the federal government, San Diego's ordinary zoning and permitting authority does not apply in the same manner as it would to private property. Federal environmental review and other legal requirements still apply, but local officials have considerably less direct control over what ultimately happens to the site. That reality makes the original promises to the community particularly important.
San Diego City Councilmember Marni von Wilpert told FOX 5 that Manchester representatives previously came to City Hall and presented an extensive portfolio of housing, parks, commercial development and job creation.
"They showed me an entire portfolio of housing and park space and commercial real estate and job creation. That is what they promised the people of this community," von Wilpert said. "I found out in a newspaper article that they may be changing their mind."
Congressman Scott Peters, whose district includes the property, has also publicly criticized the concept, arguing that the site should accommodate housing and neighborhood-serving businesses rather than a massive computing facility.
The location is especially significant. The Old Town campus sits near major freeways, established neighborhoods and one of San Diego's most important transit hubs, making it an unusually attractive candidate for residential development.
Replacing part of that opportunity with a substantial industrial computing operation, critics argue, could squander land that might otherwise serve generations of San Diegans.
And the public controversy extends beyond Manchester's development plans.
An examination of San Diego Community Power's public records reveals that the agency was separately developing guidelines intended to protect customers from the costs and risks associated with enormous data center electricity demands.
In June 2026, agency staff prepared proposed Data Center Load Integration Guidelines, including provisions addressing ratepayer protections and reporting on prospective data center customers. The agency's Community Advisory Committee unanimously recommended the guidelines on August 13, and they appeared on the August 27 board agenda as Item 17.
Then they were withdrawn. According to the official meeting minutes, the item was pulled at staff's request. No explanation for the withdrawal appears in the minutes, and the guidelines did not return for consideration at the September meeting.
The timing is notable because Voice of San Diego reported that Councilmember Elo-Rivera, who serves on the Community Power board, had previously questioned agency leadership about prospective data center customers without being informed about Manchester's proposal.
In response to SanDiegoVille's questions, Community Power said its staff continued monitoring state legislation concerning large electricity customers after the Community Advisory Committee recommended the guidelines. The agency specifically cited Assembly Bill 2383, subsequently signed by Governor Gavin Newsom, which requires community choice aggregators to develop data center-specific tariffs intended to address cost shifting and protect existing electricity customers.
Community Power also said its board members received verbal briefings about the status of the guidelines during the spring and summer, and that the board chair ultimately determines which matters are placed on meeting agendas. The agency did not expressly identify who requested the August withdrawal or explain why the item was removed on that particular date.
The records do not establish that the guidelines were deliberately withdrawn to conceal the Manchester project. Nevertheless, the sequence raises legitimate questions about why an oversight framework addressing precisely this type of enormous electrical demand was delayed while preliminary discussions with a potential 400-megawatt customer had taken place.
Now, following the public revelations, the guidelines are returning. San Diego Community Power's October 22 board agenda includes the proposed Data Center Load Integration Guidelines as Item 19, with directors scheduled to review and discuss them. The published agenda does not call for immediate adoption, and the agency confirmed to SanDiegoVille that the matter would be discussed at the regularly scheduled meeting.
The agency has also experienced a significant leadership transition. Former CEO Karin Burns went on leave in June, and Community Power subsequently announced that she had concluded her tenure as chief executive in September while remaining as an executive advisor through January 15, 2027.
Voice of San Diego reported that Burns would retain her $505,270 annual CEO salary during the advisory appointment. The precise terms of her compensation arrangement require examination of the underlying agreement, and no evidence establishes that her departure was connected to the Manchester discussions.
Community Power noted that an acting CEO has led the agency since June 25. The agency said its current leadership is committed to balancing competitiveness with ratepayer protections and ensuring fair electricity rates for customers.
The proposed data center's physical footprint presents another extraordinary unanswered question. The Navy identifies two main portions of the Old Town Campus measuring approximately 46.6 and 23.6 acres. Manchester representatives have indicated that the potential data center would occupy the smaller parcel, leaving the larger portion available for other redevelopment uses.
But fitting 400 megawatts of electrical demand onto 23.6 acres would represent an unusually intense concentration of power. The arithmetic works out to approximately 17 megawatts per acre. By comparison, a QTS data center campus in Arizona has been described as accommodating at least 210 megawatts across roughly 80 acres, while a proposed 396-megawatt data center campus in San Jose occupies approximately 159 acres.
A separate QTS development in Arizona has contemplated approximately 29 acres for a substation alone, a footprint larger than the entire NAVWAR parcel identified for Manchester's potential facility. These comparisons do not establish that the project is impossible. Data center designs vary, and a developer could potentially place supporting infrastructure outside the main building parcel. Electrical demand and actual computing capacity are also not necessarily interchangeable measurements.
But the difference is substantial enough to demand detailed engineering plans before anyone accepts the proposed capacity as realistic. The developer has not publicly identified a committed hyperscale tenant, finalized site plan, confirmed cooling system, comprehensive water budget or detailed backup-power configuration.
Those omissions matter because large data centers require far more than buildings filled with computer servers. They can involve extensive substations, transmission upgrades, cooling infrastructure, backup generators and potentially significant water consumption.
A proposed 330-megawatt data center in Imperial County, for example, included plans for 132 natural-gas generators and substantial supporting infrastructure. NAVWAR's eventual requirements could differ considerably, but the example illustrates the scale of equipment that may be necessary.
The economic benefits are also uncertain. Data center construction can generate significant temporary employment, but completed facilities are often highly automated and require comparatively modest permanent staffing. Depending on the operator and technology, a 400-megawatt development might support only a few hundred permanent jobs, although no reliable project-specific employment estimate has been released.
That raises an obvious question: How would the long-term economic and community benefits compare with thousands of apartments, hotels, restaurants, shops and other businesses that could occupy the same valuable land? The public has yet to receive a credible side-by-side comparison.
The potential financial players make the situation even more politically sensitive. Liberty Strategic Capital was established by Steven Mnuchin after his tenure as Treasury secretary under Donald Trump. The firm invests in technology, financial services and related industries, and Voice of San Diego reported that representatives were involved in preliminary financing discussions concerning the potential NAVWAR data center.
Those discussions do not establish that Liberty has committed money, that Mnuchin personally negotiated the project or that political connections influenced the Navy's selection of Manchester/Edgemoor. Nevertheless, the possibility of a Trump-connected investment firm participating in a lucrative redevelopment of federal military land adds another layer of public interest.
Doug Manchester's own political history is extensive. The billionaire developer has been a prominent Republican donor for decades and contributed $125,000 toward California's controversial 2008 Proposition 8 campaign, which sought to prohibit same-sex marriage. His support sparked a highly publicized boycott of his hotels.
In 2017, Trump nominated Manchester to become U.S. ambassador to the Bahamas. The nomination remained stalled for more than two years before Manchester withdrew in 2019 amid scrutiny of political contributions.
That year, CBS News reported on emails involving then-Republican National Committee Chairwoman Ronna McDaniel and Manchester concerning substantial donations while his nomination was pending.
According to CBS, McDaniel requested $500,000 in contributions from Manchester's family, and Manchester responded in terms suggesting additional support after confirmation. Two members of Congress subsequently asked the FBI to investigate whether the correspondence raised potential pay-to-play concerns.
The allegations did not establish criminal wrongdoing, and no publicly verified outcome of the requested investigation has been identified. There is also no evidence that the episode influenced the current NAVWAR redevelopment.
But the history is relevant to understanding why Manchester's political relationships, and the identities of any prospective financial partners, are likely to receive heightened scrutiny when valuable federal land is involved.
San Diego residents have another reason to examine the proposed arrangement closely: Manchester's previous Navy redevelopment.
In 2006, Manchester Pacific Gateway entered into a 99-year lease involving the Navy Broadway Complex, a roughly 12-acre downtown waterfront property that was supposed to become a sweeping mixed-use development.
The original vision included a replacement Navy headquarters, office towers, hotels, retail space, a museum and public amenities. But years of litigation and permitting disputes delayed construction, and the project ultimately evolved considerably from its original presentation. The Navy headquarters was completed in 2020, approximately 14 years after the lease agreement.
Manchester later sold approximately 8.7 acres, representing five of the project's eight development blocks, to life-sciences developer IQHQ for a reported $230 million, according to property records cited by The San Diego Union-Tribune.
IQHQ subsequently pursued its Research and Development District on the acquired property. Manchester retained a separate site for a proposed 1,035-room hotel, which remains unbuilt and has most recently been projected to open in 2027.
That would place the hotel's anticipated opening more than two decades after the original Navy Broadway agreement.
The history does not prove Manchester violated his obligations or that the NAVWAR redevelopment will follow the same trajectory. It does, however, demonstrate how ambitious public-private development promises can change dramatically through litigation, land transactions and shifting market conditions.
And the Navy itself has identified the Broadway arrangement as a precedent for the Old Town Campus redevelopment.
That makes the terms of the prospective NAVWAR lease especially consequential. The public deserves to know whether the developer could sell or assign development interests, what financial guarantees would apply, what construction milestones would be enforceable and whether promised housing and community benefits would survive changes in ownership.
Meanwhile, another massive Southern California data center proposal has already encountered serious legal problems.
In Imperial County, developer Sebastian Rucci pursued a proposed 330-megawatt data center that drew criticism over electricity demand, water consumption and environmental oversight. Rucci publicly associated the project with Google, but Google denied being involved in a data center project in Imperial County.
In September 2026, an Imperial County judge vacated the project's approvals and ordered a full environmental review after finding deficiencies in the county's environmental approval process.
The NAVWAR redevelopment operates under federal rather than California environmental review requirements, so the Imperial Valley ruling does not directly govern the Navy property. But it underscores how speculative data center proposals can encounter major legal and infrastructure obstacles before construction ever begins.
Manchester has since attempted to reassure critics that the housing vision remains alive.
In an October 20 follow-up reported by Voice of San Diego, Eldredge said housing would still be a major component of the redevelopment, potentially including thousands of multifamily homes. A company representative indicated that the data center, if pursued, would be located on the smaller parcel.
In an October 21 statement provided directly to SanDiegoVille, Eldredge reiterated that Manchester Financial Group's priority is delivering modern NAVWAR facilities while working with the Navy and other community stakeholders. He said the development team is considering retail, commercial, industrial and hospitality uses, along with possibilities including a medical center, university campus, defense industry campus, life sciences facility and data center.
"As for the concept of a data center, our development team had early, informational conversations with energy providers to understand what might be feasible, but there are no negotiations underway and no agreements in place," Eldredge said.
Eldredge also emphasized that housing remains a major component of the contemplated redevelopment, including a potential mix of thousands of multifamily units. He said the combination of residential, commercial and other uses would help make the project financially feasible while addressing San Diego's housing shortage.
The developer further confirmed that the Navy is conducting the environmental review required under the National Environmental Policy Act and said its team is working with federal officials to complete the required analysis and public comment process.
The U.S. Navy has now responded directly to SanDiegoVille's questions, confirming that the redevelopment remains under environmental review and that the public will have another opportunity to scrutinize the plans before a final decision is made.
"The Navy is working closely with Manchester/Edgemoor on site-specific details needed to continue the Navy's environmental impact analysis," Sergio Hernandez, Public Affairs Officer for the Old Town Campus Revitalization project, told SanDiegoVille. "The Navy is updating environmental analyses from the 2021 Draft EIS using site-specific details from Manchester/Edgemoor and will publish a Revised Draft EIS for public review and comment."
Hernandez said the Navy will consider substantive public comments before issuing a Final Environmental Impact Statement and Record of Decision. He also confirmed that the Navy continues coordinating with federal and state agencies to satisfy regulatory requirements.
"The Navy anticipates publishing the Revised Draft EIS in 2027," Hernandez said.
The response establishes that the environmental review is still evolving based on details supplied by Manchester/Edgemoor, rather than being limited to the redevelopment concepts evaluated in 2021. It also means that residents will have an opportunity to examine the revised environmental analysis and submit comments before the Navy makes its final decision.
The Navy did not specifically address whether the proposed 400-megawatt data center will be included among the alternatives evaluated, whether its electrical infrastructure and environmental impacts will receive separate analysis, or what development commitments might ultimately be incorporated into a long-term lease. Those questions remain unresolved as the Navy prepares its revised review.
The Navy maintains a public information website for the project at navwar-revitalization.com.
Those statements are important. Manchester has not announced a final decision to abandon housing, and no data center has been approved. The company's assertion that no negotiations or agreements are underway also indicates that the data center concept remains preliminary.
But the developer has not publicly established how many homes would be built, how many would be affordable, whether any would be reserved for military families, or how the proposed computing facility would fit alongside the broader redevelopment.
The original publicly described environmental alternatives focused on military modernization and potential residential, commercial and transportation development rather than a massive hyperscale computing facility. Whether the revised analysis will fully address the implications of such a facility remains to be seen.
The final land-use plan, financing arrangements, environmental impacts and terms of any long-term lease remain unresolved.
What is already clear is that San Diegans were introduced to one vision for the property while the development team subsequently explored a different and potentially lucrative opportunity outside the public spotlight.
The public was told about thousands of homes, parks, transit connections and a new neighborhood. The developer was privately asking about powering an industrial-scale AI facility, considering meetings with prospective investors overseas and exploring financing relationships connected to one of the country's most politically prominent former Cabinet officials.
At the same time, the local public electricity agency was developing oversight guidelines for enormous data center customers, only to withdraw them from its August board agenda before bringing them back for discussion amid mounting scrutiny. Community Power has now pointed to intervening state legislation as context for its handling of the guidelines, although the specific circumstances of the August withdrawal remain unclear.
There may ultimately be a defensible proposal that accommodates both significant housing and some form of computing infrastructure. Data centers can bring substantial private investment and support important technological industries, and the Navy's aging facilities unquestionably need modernization.
But those potential benefits cannot be properly evaluated without transparent engineering, a credible analysis of grid costs, financial guarantees protecting electricity customers, enforceable development commitments and meaningful public participation.
San Diego has already watched one Manchester-led Navy redevelopment evolve over two decades, with portions of the original vision delayed, transferred or transformed.
This time, the stakes involve more than a delayed hotel or another commercial tower. They involve a potentially century-long arrangement over some of the city's most strategically located land, the future of thousands of possible homes and an electrical demand comparable to an entire city.
Before the Navy commits to a 99-year deal, San Diegans deserve to know exactly what they are getting, what they may be giving up, whether their electricity bills could be affected, and who stands to make the money.
The controversy erupted after Voice of San Diego obtained correspondence showing that Manchester Financial Group, the prominent hotel and real estate development company founded by Doug Manchester, had been exploring a 400-megawatt AI data center while publicly presenting a much broader vision of housing, commercial development and neighborhood revitalization.
In January 2024, the Navy selected Manchester/Edgemoor LLC, a partnership involving Manchester Financial Group and Edgemoor Infrastructure & Real Estate, as the potential master developer of its 70.3-acre Old Town Campus. The contemplated arrangement would allow the development team to negotiate a deal to replace aging Navy facilities in exchange for long-term development rights to portions of the federal property.
The Navy's earlier redevelopment alternatives contemplated as many as 10,000 housing units, along with commercial development and a major transit center. Manchester's public presentations emphasized thousands of apartments, potentially including military housing, as well as hotels, restaurants, retail, parks and other amenities. Mayor Todd Gloria supported the redevelopment opportunity, which appeared to offer an extraordinary chance to address San Diego's housing shortage.
But behind the scenes, the development team was also exploring a dramatically different use for part of the property.
According to emails obtained by Voice of San Diego, Manchester Financial Group President and CEO Ted Eldredge contacted San Diego Community Power in November 2025 to discuss electricity costs for a potential 400-megawatt data center. The correspondence also referenced plans to meet prospective investors in Doha, Qatar, and subsequent discussions involving San Diego Gas & Electric and Liberty Strategic Capital, the private investment firm founded by former Trump administration Treasury Secretary Steven Mnuchin.
In response to questions from SanDiegoVille, San Diego Community Power confirmed that it provided preliminary electricity generation pricing estimates for a hypothetical project in November 2025 and again in May 2026. The agency said it has not heard from the developer since May, suggesting that discussions with the public power provider have not advanced in recent months. Community Power characterized its interactions with potential large customers as part of its responsibility to evaluate electricity procurement needs while keeping rates as low as possible for existing customers.
The electricity requirements alone are staggering. A 400-megawatt facility operating at full capacity around the clock would consume approximately 3.5 billion kilowatt-hours annually, comparable to the electricity usage of roughly 300,000 or more households, depending on average consumption. At an illustrative electricity price of 11 cents per kilowatt-hour, its energy purchases could exceed $1 million every day, before additional delivery charges and other expenses.
For a city already struggling with exceptionally expensive electricity, the prospect of accommodating a single private customer with the energy demands of a small city has prompted serious concerns about infrastructure costs and whether ordinary ratepayers could ultimately shoulder any portion of the burden.
But the potential electricity bill may be the least of San Diego's problems. The much larger question is whether the region's electrical infrastructure could accommodate a single private facility demanding 400 megawatts of power around the clock, what upgrades would be necessary, and whether residents and businesses already paying some of the nation's highest electricity rates could end up financing part of the expansion.
The proposed data center would require far more than an ordinary connection to the power grid. Depending on available capacity, accommodating such a massive new customer could require new substations, high-voltage transmission infrastructure, transformers and other equipment potentially costing hundreds of millions of dollars. No publicly disclosed engineering assessment has established the actual upgrades or costs associated with the NAVWAR concept.
According to Voice of San Diego, Manchester representatives requested an engineering study from San Diego Gas & Electric in March 2026 to determine what adding the proposed demand would require. In a written response to SanDiegoVille, SDG&E declined to confirm whether it had begun or completed an assessment, citing its policy of keeping discussions with specific prospective customers confidential. The utility did not identify any required upgrades, estimated costs or project-specific protections for existing ratepayers.
That leaves the public without answers about whether sufficient electrical capacity exists, how long necessary improvements would take, whether new generating resources would be needed or who would ultimately pay for them.
San Diego City Councilmember Sean Elo-Rivera has raised precisely those concerns, questioning whether customers already facing extraordinary electricity costs could be saddled with additional expenses to accommodate a billionaire developer's speculative computing project.
The distinction is critical. A data center operator paying its own monthly electricity bill does not necessarily mean it has paid every infrastructure cost associated with connecting the facility to the grid. Those costs depend on utility tariffs, regulatory decisions, the location of the project and the specific improvements required.
And the stakes extend beyond the initial construction expenses. If utilities build expensive infrastructure to accommodate a proposed hyperscale customer that ultimately abandons its project, significantly reduces its demand or never secures a tenant, someone must absorb the resulting costs. Without adequate financial guarantees, those stranded investments can create risks for other electricity customers.
California lawmakers have recognized the problem. On September 21, Governor Gavin Newsom signed a package of legislation intended to protect electricity customers from the costs associated with enormous data center loads, including Senate Bill 886, authored by Senators Steve Padilla and Jerry McNerney, and Assembly Bill 2383.
The laws establish new requirements addressing cost allocation, electricity procurement and financial protections. In a written response to SanDiegoVille, SDG&E also cited Senate Bill 1168 alongside SB 886 and AB 2383, emphasizing that the legislation directs the California Public Utilities Commission to establish rules intended to prevent large new electricity customers from shifting their costs to existing customers. Important provisions require additional implementation by the commission, including tariff development extending into 2028.
"Large new electricity users are expected to be responsible for the costs associated with serving their demand while protecting existing customers from unreasonable cost shifts," SDG&E Media Relations Manager Anthony Wagner told SanDiegoVille. He said the utility evaluates potential projects as part of normal business planning but does not approve or deny land-use proposals, which are decided by property owners and the appropriate government agencies. SDG&E said it would implement the new requirements through the CPUC's public process.
Those protections are significant, but they do not establish what Manchester or a future NAVWAR tenant would be required to pay under any particular service agreement today.
There is no publicly disclosed completed SDG&E engineering study identifying the upgrades necessary to serve the proposed facility, their estimated cost or the financial guarantees that would protect existing customers. SDG&E's response did not answer those project-specific questions.
That makes the developer's pursuit of preliminary electricity pricing particularly noteworthy. The public knows Manchester explored the potential price of electricity for an enormous data center, but it does not know the full infrastructure price of making that facility possible.
The proposal also raises questions about reliability and environmental commitments. A 400-megawatt facility could require substantial new electricity procurement arrangements, while backup systems might involve diesel or natural-gas generators with associated emissions. The actual effects would depend on engineering decisions that have not been publicly disclosed.
Correspondence reported by Voice of San Diego indicated that a commitment to using entirely renewable electricity was considered unlikely without input from a future hyperscale tenant. That response is especially notable because San Diego Community Power has established a goal of supplying 100 percent renewable electricity by 2035.
Perhaps the most revealing statement about the project's financial motivations came from Manchester's own chief executive.
"We're hotel developers. We're not in the data center space," Eldredge told Voice of San Diego. "We're just trying to figure out a lucrative way to build the Navy their building."
That admission goes to the heart of the controversy. Manchester Financial Group has decades of experience developing hotels and commercial real estate, but no publicly identified history of developing hyperscale data centers. The company is exploring an industry experiencing extraordinary investment and demand for computing infrastructure, even as questions mount nationally about whether every proposed facility will ever be built.
The Navy, meanwhile, has a legitimate need to replace outdated facilities housing thousands of personnel involved in military communications, cybersecurity and information warfare. Under the contemplated arrangement, the development team would construct replacement Navy facilities and receive long-term development rights to portions of the site.
The potential ground lease has been described as extending 99 years, although its final terms have not been publicly established and no unconditional agreement authorizing the proposed data center has been finalized.
Because the land belongs to the federal government, San Diego's ordinary zoning and permitting authority does not apply in the same manner as it would to private property. Federal environmental review and other legal requirements still apply, but local officials have considerably less direct control over what ultimately happens to the site. That reality makes the original promises to the community particularly important.
San Diego City Councilmember Marni von Wilpert told FOX 5 that Manchester representatives previously came to City Hall and presented an extensive portfolio of housing, parks, commercial development and job creation.
"They showed me an entire portfolio of housing and park space and commercial real estate and job creation. That is what they promised the people of this community," von Wilpert said. "I found out in a newspaper article that they may be changing their mind."
Congressman Scott Peters, whose district includes the property, has also publicly criticized the concept, arguing that the site should accommodate housing and neighborhood-serving businesses rather than a massive computing facility.
The location is especially significant. The Old Town campus sits near major freeways, established neighborhoods and one of San Diego's most important transit hubs, making it an unusually attractive candidate for residential development.
Replacing part of that opportunity with a substantial industrial computing operation, critics argue, could squander land that might otherwise serve generations of San Diegans.
And the public controversy extends beyond Manchester's development plans.
An examination of San Diego Community Power's public records reveals that the agency was separately developing guidelines intended to protect customers from the costs and risks associated with enormous data center electricity demands.
In June 2026, agency staff prepared proposed Data Center Load Integration Guidelines, including provisions addressing ratepayer protections and reporting on prospective data center customers. The agency's Community Advisory Committee unanimously recommended the guidelines on August 13, and they appeared on the August 27 board agenda as Item 17.
Then they were withdrawn. According to the official meeting minutes, the item was pulled at staff's request. No explanation for the withdrawal appears in the minutes, and the guidelines did not return for consideration at the September meeting.
The timing is notable because Voice of San Diego reported that Councilmember Elo-Rivera, who serves on the Community Power board, had previously questioned agency leadership about prospective data center customers without being informed about Manchester's proposal.
In response to SanDiegoVille's questions, Community Power said its staff continued monitoring state legislation concerning large electricity customers after the Community Advisory Committee recommended the guidelines. The agency specifically cited Assembly Bill 2383, subsequently signed by Governor Gavin Newsom, which requires community choice aggregators to develop data center-specific tariffs intended to address cost shifting and protect existing electricity customers.
Community Power also said its board members received verbal briefings about the status of the guidelines during the spring and summer, and that the board chair ultimately determines which matters are placed on meeting agendas. The agency did not expressly identify who requested the August withdrawal or explain why the item was removed on that particular date.
The records do not establish that the guidelines were deliberately withdrawn to conceal the Manchester project. Nevertheless, the sequence raises legitimate questions about why an oversight framework addressing precisely this type of enormous electrical demand was delayed while preliminary discussions with a potential 400-megawatt customer had taken place.
Now, following the public revelations, the guidelines are returning. San Diego Community Power's October 22 board agenda includes the proposed Data Center Load Integration Guidelines as Item 19, with directors scheduled to review and discuss them. The published agenda does not call for immediate adoption, and the agency confirmed to SanDiegoVille that the matter would be discussed at the regularly scheduled meeting.
The agency has also experienced a significant leadership transition. Former CEO Karin Burns went on leave in June, and Community Power subsequently announced that she had concluded her tenure as chief executive in September while remaining as an executive advisor through January 15, 2027.
Voice of San Diego reported that Burns would retain her $505,270 annual CEO salary during the advisory appointment. The precise terms of her compensation arrangement require examination of the underlying agreement, and no evidence establishes that her departure was connected to the Manchester discussions.
Community Power noted that an acting CEO has led the agency since June 25. The agency said its current leadership is committed to balancing competitiveness with ratepayer protections and ensuring fair electricity rates for customers.
The proposed data center's physical footprint presents another extraordinary unanswered question. The Navy identifies two main portions of the Old Town Campus measuring approximately 46.6 and 23.6 acres. Manchester representatives have indicated that the potential data center would occupy the smaller parcel, leaving the larger portion available for other redevelopment uses.
But fitting 400 megawatts of electrical demand onto 23.6 acres would represent an unusually intense concentration of power. The arithmetic works out to approximately 17 megawatts per acre. By comparison, a QTS data center campus in Arizona has been described as accommodating at least 210 megawatts across roughly 80 acres, while a proposed 396-megawatt data center campus in San Jose occupies approximately 159 acres.
A separate QTS development in Arizona has contemplated approximately 29 acres for a substation alone, a footprint larger than the entire NAVWAR parcel identified for Manchester's potential facility. These comparisons do not establish that the project is impossible. Data center designs vary, and a developer could potentially place supporting infrastructure outside the main building parcel. Electrical demand and actual computing capacity are also not necessarily interchangeable measurements.
But the difference is substantial enough to demand detailed engineering plans before anyone accepts the proposed capacity as realistic. The developer has not publicly identified a committed hyperscale tenant, finalized site plan, confirmed cooling system, comprehensive water budget or detailed backup-power configuration.
Those omissions matter because large data centers require far more than buildings filled with computer servers. They can involve extensive substations, transmission upgrades, cooling infrastructure, backup generators and potentially significant water consumption.
A proposed 330-megawatt data center in Imperial County, for example, included plans for 132 natural-gas generators and substantial supporting infrastructure. NAVWAR's eventual requirements could differ considerably, but the example illustrates the scale of equipment that may be necessary.
The economic benefits are also uncertain. Data center construction can generate significant temporary employment, but completed facilities are often highly automated and require comparatively modest permanent staffing. Depending on the operator and technology, a 400-megawatt development might support only a few hundred permanent jobs, although no reliable project-specific employment estimate has been released.
That raises an obvious question: How would the long-term economic and community benefits compare with thousands of apartments, hotels, restaurants, shops and other businesses that could occupy the same valuable land? The public has yet to receive a credible side-by-side comparison.
The potential financial players make the situation even more politically sensitive. Liberty Strategic Capital was established by Steven Mnuchin after his tenure as Treasury secretary under Donald Trump. The firm invests in technology, financial services and related industries, and Voice of San Diego reported that representatives were involved in preliminary financing discussions concerning the potential NAVWAR data center.
Those discussions do not establish that Liberty has committed money, that Mnuchin personally negotiated the project or that political connections influenced the Navy's selection of Manchester/Edgemoor. Nevertheless, the possibility of a Trump-connected investment firm participating in a lucrative redevelopment of federal military land adds another layer of public interest.
Doug Manchester's own political history is extensive. The billionaire developer has been a prominent Republican donor for decades and contributed $125,000 toward California's controversial 2008 Proposition 8 campaign, which sought to prohibit same-sex marriage. His support sparked a highly publicized boycott of his hotels.
In 2017, Trump nominated Manchester to become U.S. ambassador to the Bahamas. The nomination remained stalled for more than two years before Manchester withdrew in 2019 amid scrutiny of political contributions.
That year, CBS News reported on emails involving then-Republican National Committee Chairwoman Ronna McDaniel and Manchester concerning substantial donations while his nomination was pending.
According to CBS, McDaniel requested $500,000 in contributions from Manchester's family, and Manchester responded in terms suggesting additional support after confirmation. Two members of Congress subsequently asked the FBI to investigate whether the correspondence raised potential pay-to-play concerns.
The allegations did not establish criminal wrongdoing, and no publicly verified outcome of the requested investigation has been identified. There is also no evidence that the episode influenced the current NAVWAR redevelopment.
But the history is relevant to understanding why Manchester's political relationships, and the identities of any prospective financial partners, are likely to receive heightened scrutiny when valuable federal land is involved.
San Diego residents have another reason to examine the proposed arrangement closely: Manchester's previous Navy redevelopment.
In 2006, Manchester Pacific Gateway entered into a 99-year lease involving the Navy Broadway Complex, a roughly 12-acre downtown waterfront property that was supposed to become a sweeping mixed-use development.
The original vision included a replacement Navy headquarters, office towers, hotels, retail space, a museum and public amenities. But years of litigation and permitting disputes delayed construction, and the project ultimately evolved considerably from its original presentation. The Navy headquarters was completed in 2020, approximately 14 years after the lease agreement.
Manchester later sold approximately 8.7 acres, representing five of the project's eight development blocks, to life-sciences developer IQHQ for a reported $230 million, according to property records cited by The San Diego Union-Tribune.
IQHQ subsequently pursued its Research and Development District on the acquired property. Manchester retained a separate site for a proposed 1,035-room hotel, which remains unbuilt and has most recently been projected to open in 2027.
That would place the hotel's anticipated opening more than two decades after the original Navy Broadway agreement.
The history does not prove Manchester violated his obligations or that the NAVWAR redevelopment will follow the same trajectory. It does, however, demonstrate how ambitious public-private development promises can change dramatically through litigation, land transactions and shifting market conditions.
And the Navy itself has identified the Broadway arrangement as a precedent for the Old Town Campus redevelopment.
That makes the terms of the prospective NAVWAR lease especially consequential. The public deserves to know whether the developer could sell or assign development interests, what financial guarantees would apply, what construction milestones would be enforceable and whether promised housing and community benefits would survive changes in ownership.
Meanwhile, another massive Southern California data center proposal has already encountered serious legal problems.
In Imperial County, developer Sebastian Rucci pursued a proposed 330-megawatt data center that drew criticism over electricity demand, water consumption and environmental oversight. Rucci publicly associated the project with Google, but Google denied being involved in a data center project in Imperial County.
In September 2026, an Imperial County judge vacated the project's approvals and ordered a full environmental review after finding deficiencies in the county's environmental approval process.
The NAVWAR redevelopment operates under federal rather than California environmental review requirements, so the Imperial Valley ruling does not directly govern the Navy property. But it underscores how speculative data center proposals can encounter major legal and infrastructure obstacles before construction ever begins.
Manchester has since attempted to reassure critics that the housing vision remains alive.
In an October 20 follow-up reported by Voice of San Diego, Eldredge said housing would still be a major component of the redevelopment, potentially including thousands of multifamily homes. A company representative indicated that the data center, if pursued, would be located on the smaller parcel.
In an October 21 statement provided directly to SanDiegoVille, Eldredge reiterated that Manchester Financial Group's priority is delivering modern NAVWAR facilities while working with the Navy and other community stakeholders. He said the development team is considering retail, commercial, industrial and hospitality uses, along with possibilities including a medical center, university campus, defense industry campus, life sciences facility and data center.
"As for the concept of a data center, our development team had early, informational conversations with energy providers to understand what might be feasible, but there are no negotiations underway and no agreements in place," Eldredge said.
Eldredge also emphasized that housing remains a major component of the contemplated redevelopment, including a potential mix of thousands of multifamily units. He said the combination of residential, commercial and other uses would help make the project financially feasible while addressing San Diego's housing shortage.
The developer further confirmed that the Navy is conducting the environmental review required under the National Environmental Policy Act and said its team is working with federal officials to complete the required analysis and public comment process.
The U.S. Navy has now responded directly to SanDiegoVille's questions, confirming that the redevelopment remains under environmental review and that the public will have another opportunity to scrutinize the plans before a final decision is made.
"The Navy is working closely with Manchester/Edgemoor on site-specific details needed to continue the Navy's environmental impact analysis," Sergio Hernandez, Public Affairs Officer for the Old Town Campus Revitalization project, told SanDiegoVille. "The Navy is updating environmental analyses from the 2021 Draft EIS using site-specific details from Manchester/Edgemoor and will publish a Revised Draft EIS for public review and comment."
Hernandez said the Navy will consider substantive public comments before issuing a Final Environmental Impact Statement and Record of Decision. He also confirmed that the Navy continues coordinating with federal and state agencies to satisfy regulatory requirements.
"The Navy anticipates publishing the Revised Draft EIS in 2027," Hernandez said.
The response establishes that the environmental review is still evolving based on details supplied by Manchester/Edgemoor, rather than being limited to the redevelopment concepts evaluated in 2021. It also means that residents will have an opportunity to examine the revised environmental analysis and submit comments before the Navy makes its final decision.
The Navy did not specifically address whether the proposed 400-megawatt data center will be included among the alternatives evaluated, whether its electrical infrastructure and environmental impacts will receive separate analysis, or what development commitments might ultimately be incorporated into a long-term lease. Those questions remain unresolved as the Navy prepares its revised review.
The Navy maintains a public information website for the project at navwar-revitalization.com.
Those statements are important. Manchester has not announced a final decision to abandon housing, and no data center has been approved. The company's assertion that no negotiations or agreements are underway also indicates that the data center concept remains preliminary.
But the developer has not publicly established how many homes would be built, how many would be affordable, whether any would be reserved for military families, or how the proposed computing facility would fit alongside the broader redevelopment.
The original publicly described environmental alternatives focused on military modernization and potential residential, commercial and transportation development rather than a massive hyperscale computing facility. Whether the revised analysis will fully address the implications of such a facility remains to be seen.
The final land-use plan, financing arrangements, environmental impacts and terms of any long-term lease remain unresolved.
What is already clear is that San Diegans were introduced to one vision for the property while the development team subsequently explored a different and potentially lucrative opportunity outside the public spotlight.
The public was told about thousands of homes, parks, transit connections and a new neighborhood. The developer was privately asking about powering an industrial-scale AI facility, considering meetings with prospective investors overseas and exploring financing relationships connected to one of the country's most politically prominent former Cabinet officials.
At the same time, the local public electricity agency was developing oversight guidelines for enormous data center customers, only to withdraw them from its August board agenda before bringing them back for discussion amid mounting scrutiny. Community Power has now pointed to intervening state legislation as context for its handling of the guidelines, although the specific circumstances of the August withdrawal remain unclear.
There may ultimately be a defensible proposal that accommodates both significant housing and some form of computing infrastructure. Data centers can bring substantial private investment and support important technological industries, and the Navy's aging facilities unquestionably need modernization.
But those potential benefits cannot be properly evaluated without transparent engineering, a credible analysis of grid costs, financial guarantees protecting electricity customers, enforceable development commitments and meaningful public participation.
San Diego has already watched one Manchester-led Navy redevelopment evolve over two decades, with portions of the original vision delayed, transferred or transformed.
This time, the stakes involve more than a delayed hotel or another commercial tower. They involve a potentially century-long arrangement over some of the city's most strategically located land, the future of thousands of possible homes and an electrical demand comparable to an entire city.
Before the Navy commits to a 99-year deal, San Diegans deserve to know exactly what they are getting, what they may be giving up, whether their electricity bills could be affected, and who stands to make the money.
Originally published on October 22, 2026.
