La Jolla-based real estate developer McKellar McGowan has withdrawn from redeveloping the 4.76-acre former Pacific Beach reservoir site on Los Altos Road into 20 single-family homes.
“A couple of weeks ago we decided we did not want to fight the resolute Los Altos Road neighbors for five years,” said Chris McKellar. “Apparently, the city has found another developer willing to give it a go.”
“There are a number of parties interested in the property,” confirmed Arian Collins, the city’s supervising public information officer. “The City is currently in the negotiation process.”
McKellar McGowan, negotiating with neighbors near the reservoir site, ran into stiff opposition.
Soledad Terrace neighbors complained of lack of transparency — and of being ignored — by the city, following the proposed sale of the former Pacific Beach reservoir site west of Kate Sessions Park to McKellar McGowan. 
The property, with an appraised value of $8.8 million, had not yet been approved for sale by the City Council, city spokesman Jose Ysea said. 
PB reservoir, recently demolished, served as part of the city of San Diego’s water system for about 80 years. It was originally supplied by the University Heights reservoir, and the city’s original water treatment plant at El Cajon Boulevard and Oregon Street.
When the Alvarado Water Treatment Plant at Murray Reservoir was brought online in 1951, this gravity-fed system was updated with new pipelines and other infrastructure, rendering the PB reservoir obsolete.
The city opted to sell the 4.6-acre unused reservoir site last year, and retained commercial real estate brokers Jones Lang LaSalle for the task.