Pacifica Companies of San Diego plans to build the project on a 126-acre site, with up to three hotels of as many as six stories, restaurants, shops and 3,400 homes. The council voted 4-1 to approve the plan this week.

City officials believe the 5.8 million-sf Pacifica project could revitalize the long troubled Chula Vista waterfront. The San Diego Unified Port District controls a majority of the city's waterfront land and is working on a master plan for mostly commercial development nearby.

The area for Bayfront Village is called Midbayfront, an the area bounded by Interstate 5 to the east, Sweetwater Marsh National Wildlife Refuge to the north, the bay to the west and Lagoon Drive to the south.

The project sets aside 30,000 sf for retail and commercial space, mostly businesses to serve the residents, he said.

Under the agreement, the developer must secure financing for the project, complete land acquisitions, assess the environmental impacts and prepare plans by the agreement's 2004 deadline.

It's the second exclusive negotiating agreement in about four years for the site. In November 1998, William Tuchscher was granted an exclusive negotiating agreement to build a $587 million entertainment, retail and residential complex. But the developer couldn't finance the plan.