San Diego has given Mission Bay Sports Center until Friday, October 30, to pay $942,753.44 or surrender its waterfront lease at 1010 Santa Clara Place. The city’s move is part of a larger disagreement over rent, financial records and whether the operator had permission to host private events through subtenants. The San Diego Union-Tribune reported the payment demand and the competing accounts; the dispute’s central contract questions remain contested.
The city’s $942,753.44 demand covers rent it says has been unpaid since September 2025, including percentage rent tied to business revenue. The city also seeks all revenue it believes the operator received from private events it considers unauthorized. A separate default letter cited $4.2 million in rent, interest, water charges, audit penalties and other costs from August 2022 through September 2026, according to the Union-Tribune. Those are distinct city claims, not a single stated balance.
A public park, a commercial lease and disputed permissions
Mission Bay Sports Center operates at the site. Its 20-year lease covers land and water at Santa Clara Point and runs through July 2031, the Union-Tribune reported. The company disputes the city’s interpretation of the lease. It says it has paid millions in rent over its decades at the site and plans to fight the eviction.
The contested uses involve Tower Paddle, which operates a retail store and event space, and The Point, a wedding and corporate-event venue. The Union-Tribune reported that the city says it never formally approved the sublease to The Point and that negotiations over authorizing Tower Paddle did not produce a finalized, approved agreement. Tower Paddle founder Stephan Aarstol told the newspaper that the process was transparent, that the city knew about the intended retail and event uses, and that the business paid rent, including a share of event revenue. These reported positions do not resolve whether the subleases or events were permitted under the master lease.
The city has cited more than the alleged unauthorized uses. Its October 27 default notice also identified unpaid rent and missing financial documents, according to the Union-Tribune.
How the city handles other waterfront leases
Mission Bay’s adopted plan calls for a mix of public, commercial and natural uses for residents and visitors, according to the City of San Diego Mission Bay Park Master Plan. That framework helps explain why commercial activity exists in the park; it does not determine whether these particular subleases or events complied with this particular contract.
The city’s approach has varied across other Mission Bay properties. In July 2025, the City Council approved 15-year lease extensions for Campland on the Bay and Mission Bay RV Resort, a separate decision involving more than 900 waterfront campsites, FOX 5/KUSI reported. In March 2026, the city separately sought proposals to lease, renovate and operate Dana Landing and a restaurant building on Quivira Bay, according to a City of San Diego announcement. Those actions concern different sites and are not direct precedents for the Santa Clara Point dispute.
A separate example of lease oversight comes from Ocean Beach, not Mission Bay. An August 2026 City Auditor report on Barnes Tennis Center substantiated unpermitted grading and continued unauthorized parking on a parcel, and said enforcement gaps allowed violations to persist, according to the City Auditor. The report concerns a different tenant and property; it does not establish wrongdoing by Mission Bay Sports Center.
Why lease enforcement matters to Mission Bay
Lease compliance also has a public-finance dimension. San Diego’s FY2026 adopted budget says the Mission Bay Park Improvement Fund supports wetland and wildlife-habitat restoration and deferred maintenance. Under the city charter, the fund receives a specified share of Mission Bay lease revenue above $20 million, subject to the prior allocation to the San Diego Regional Parks Improvement Fund, according to the City’s FY2026 adopted budget. The FY2026 adopted budget reports FY2024 actual revenue of $12,126,627 and total expense of $9,526,261.
The dispute remains centered on the lease terms, the amount owed and whether the subtenant uses were authorized.
