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Oceanside's new hotel/timeshare resort is now a Westin????...Wow
I thought it was going to be a Fairfield or is this a different project as it says the construction in not going to start until 2007 (maybe).....interesting...now bigger and better with 72 timeshares and 336 hotel rooms....but it is also talking about fractional timeshares 48. Does anyone have a real handle on what is what with these developments?
Oceanside resort larger, more expensive than expected
North County Times Link
By: DAVID STERRETT - Staff Writer
OCEANSIDE ---- A 300-room beach resort touted as the future centerpiece of Oceanside's downtown is going to be larger and more expensive for the city than originally proposed last year.
View A Slide Show
Under the terms of a tentative agreement going before the City Council on Wednesday, Oceanside will need to invest about $27 million to help pay for a $187 million Westin resort across from the city's pier.
Last year when the council selected San Diego developer S.D. Malkin Properties Inc. to do the project, the company proposed the city pay $9.9 million for a $110 million resort with 302 hotel rooms and 72 time shares.
But skyrocketing construction costs, an increase in the number of hotel rooms from 302 to 336 and a different type of time-share arrangement has led the developer to request more money from the city during negotiations, officials said.
All five City Council members reached by phone Wednesday said they continue to support the resort, despite the rising price tag.
"The cost keeps going up because we keep wanting something bigger and better," Councilwoman Esther Sanchez said. "We wish we could build it without a subsidy, but we've got to be realistic.
"The bottom line is this is something that Oceanside has been trying to do for the last 30 years."
The money
Under the agreement, Oceanside would not have to spend any money from its general fund, which funds city services and the salaries of city employees such as firefighters and police officers.
The city would give the developer $200,000 in redevelopment money before construction to pay for environmental studies for the project expected to begin later this year.
After the developer builds the hotel, the city would use $27 million it expects to garner from a special downtown tax district, redevelopment money and hotel tax revenue to help reimburse the developer.
All of that money will eventually be generated by the hotel increasing the value of the property and bringing tourists to the area, said Jane McVey, the city's economic development and redevelopment director.
McVey was a key part of a team of consultants and city staff members who have been in negotiations with the developer since September.
She said that, under the nonbinding agreement, the city will recover the entire investment in the hotel after 14 years when taking into consideration inflation and interest.
If the council approves the tentative agreement, the developer will move forward on completing an application for the hotel that is currently on schedule to open by the spring of 2010.
City officials have been trying to work on attracting a downtown resort hotel to the area since 1975 and has had several deals fall through, including one with developer Doug Manchester in 2003.
"If we don't have a deal we have no hotel, and if we have no hotel we don't get any of the money," McVey said. "Given what the City Council and community have said they want, this is a good deal."
For example, McVey said, the hotel could be cheaper to build if either Pacific Street or Mission Avenue were closed. But the council has said they want to leave the roads open to protect public access and view corridors.
The project
Plans call for a U-shaped, 289-room hotel facing the ocean on the south block of the property bound by Seagaze Drive, Pacific Street, Mission Avenue and Myers Street.
Just to the north across Mission Avenue will be a smaller 47-room hotel and 48 "fractional" time shares, which are different than regular time shares because instead of people buying a room for one week they must buy it for multiple weeks.
These time shares create more money for the developer, which can spend less time on sales and marketing since fewer buyers are needed ---- because each buyer gets a longer stay.
The project also includes a two-story underground parking garage with about 600 spaces. The huge garage will cost more than $20 million to build but is necessary because of the large ballroom in the hotel, city officials said.
The hotel will provide more than 30,000 square feet of meeting space, including a ballroom with seating for 500 people and 10 smaller rooms.
Jeremy Cohen, a senior vice president with Malkin, said the developer increased the size of meeting space because city officials want the facility to attract events such as weddings or business conferences.
"The city and us share the goal of creating a place that is going to create a unique and memorable place in Oceanside," Cohen said.
Projected revenue
City officials said the resort is expected to spark development for the city and should create money in the long term.
McVey said the hotel, with average room rates of about $271 a night, will generate about $2.5 million a year in hotel tax that the city could spend on services such as police and fire protection.
The hotel will also create about $1 million in property tax money and $173,000 a year in sales tax, according to city statistics.
The city will also make money by leasing the land to the developer. Under the current agreement, the developer would not have to pay for the land for the first 12 years and then the lease would rise to as much as $700,000 annually in year 20.
McVey said the city doesn't want to charge the developer for the land at the start because it wants to give the company time to establish a reputation and attract clients.
The city plans to use several different financing tools besides its general fund to help pay for the hotel.
Oceanside will establish a community facilities district in the downtown area, and reimburse the developer $5 million for building public infrastructure such as sewers.
The city will issue $17 million worth of bonds to pay for a portion of the two-story underground parking structure, and will repay the bonds with property tax money generated from the downtown redevelopment area, which includes the hotel.
The developer will also receive $5 million in future hotel tax revenue to help pay for the project. Until this $5 million is paid off, the city will keep the first $1 million of hotel tax each year and will give the developer 75 percent of the remaining revenue.
The timeline
Cohen said the $27 million investment required from the city has taken into account that the price of construction will be higher when the company breaks ground on the 24-month project probably in late 2007 or early 2008.
He said the number could always change or the project could fall through if construction costs soared at even more unprecedented levels. But Cohen said his company doesn't expect this to happen.
The company has 90 days from the time the council approves the tentative agreement to submit a formal application. The developer will then have to spend about a year working on environmental studies.
"We feel very confident this project can be built in a way that makes financial sense and will be worth all of the trouble when finished," Cohen said. "I would say right now we are probably in the fourth inning of a nine-inning game."
Contact staff writer David Sterrett at (760) 901-4067 or dsterrett@nctimes.com.
Oceanside resort larger, more expensive than expected
North County Times Link
By: DAVID STERRETT - Staff Writer
OCEANSIDE ---- A 300-room beach resort touted as the future centerpiece of Oceanside's downtown is going to be larger and more expensive for the city than originally proposed last year.
View A Slide Show
Under the terms of a tentative agreement going before the City Council on Wednesday, Oceanside will need to invest about $27 million to help pay for a $187 million Westin resort across from the city's pier.
Last year when the council selected San Diego developer S.D. Malkin Properties Inc. to do the project, the company proposed the city pay $9.9 million for a $110 million resort with 302 hotel rooms and 72 time shares.
But skyrocketing construction costs, an increase in the number of hotel rooms from 302 to 336 and a different type of time-share arrangement has led the developer to request more money from the city during negotiations, officials said.
All five City Council members reached by phone Wednesday said they continue to support the resort, despite the rising price tag.
"The cost keeps going up because we keep wanting something bigger and better," Councilwoman Esther Sanchez said. "We wish we could build it without a subsidy, but we've got to be realistic.
"The bottom line is this is something that Oceanside has been trying to do for the last 30 years."
The money
Under the agreement, Oceanside would not have to spend any money from its general fund, which funds city services and the salaries of city employees such as firefighters and police officers.
The city would give the developer $200,000 in redevelopment money before construction to pay for environmental studies for the project expected to begin later this year.
After the developer builds the hotel, the city would use $27 million it expects to garner from a special downtown tax district, redevelopment money and hotel tax revenue to help reimburse the developer.
All of that money will eventually be generated by the hotel increasing the value of the property and bringing tourists to the area, said Jane McVey, the city's economic development and redevelopment director.
McVey was a key part of a team of consultants and city staff members who have been in negotiations with the developer since September.
She said that, under the nonbinding agreement, the city will recover the entire investment in the hotel after 14 years when taking into consideration inflation and interest.
If the council approves the tentative agreement, the developer will move forward on completing an application for the hotel that is currently on schedule to open by the spring of 2010.
City officials have been trying to work on attracting a downtown resort hotel to the area since 1975 and has had several deals fall through, including one with developer Doug Manchester in 2003.
"If we don't have a deal we have no hotel, and if we have no hotel we don't get any of the money," McVey said. "Given what the City Council and community have said they want, this is a good deal."
For example, McVey said, the hotel could be cheaper to build if either Pacific Street or Mission Avenue were closed. But the council has said they want to leave the roads open to protect public access and view corridors.
The project
Plans call for a U-shaped, 289-room hotel facing the ocean on the south block of the property bound by Seagaze Drive, Pacific Street, Mission Avenue and Myers Street.
Just to the north across Mission Avenue will be a smaller 47-room hotel and 48 "fractional" time shares, which are different than regular time shares because instead of people buying a room for one week they must buy it for multiple weeks.
These time shares create more money for the developer, which can spend less time on sales and marketing since fewer buyers are needed ---- because each buyer gets a longer stay.
The project also includes a two-story underground parking garage with about 600 spaces. The huge garage will cost more than $20 million to build but is necessary because of the large ballroom in the hotel, city officials said.
The hotel will provide more than 30,000 square feet of meeting space, including a ballroom with seating for 500 people and 10 smaller rooms.
Jeremy Cohen, a senior vice president with Malkin, said the developer increased the size of meeting space because city officials want the facility to attract events such as weddings or business conferences.
"The city and us share the goal of creating a place that is going to create a unique and memorable place in Oceanside," Cohen said.
Projected revenue
City officials said the resort is expected to spark development for the city and should create money in the long term.
McVey said the hotel, with average room rates of about $271 a night, will generate about $2.5 million a year in hotel tax that the city could spend on services such as police and fire protection.
The hotel will also create about $1 million in property tax money and $173,000 a year in sales tax, according to city statistics.
The city will also make money by leasing the land to the developer. Under the current agreement, the developer would not have to pay for the land for the first 12 years and then the lease would rise to as much as $700,000 annually in year 20.
McVey said the city doesn't want to charge the developer for the land at the start because it wants to give the company time to establish a reputation and attract clients.
The city plans to use several different financing tools besides its general fund to help pay for the hotel.
Oceanside will establish a community facilities district in the downtown area, and reimburse the developer $5 million for building public infrastructure such as sewers.
The city will issue $17 million worth of bonds to pay for a portion of the two-story underground parking structure, and will repay the bonds with property tax money generated from the downtown redevelopment area, which includes the hotel.
The developer will also receive $5 million in future hotel tax revenue to help pay for the project. Until this $5 million is paid off, the city will keep the first $1 million of hotel tax each year and will give the developer 75 percent of the remaining revenue.
The timeline
Cohen said the $27 million investment required from the city has taken into account that the price of construction will be higher when the company breaks ground on the 24-month project probably in late 2007 or early 2008.
He said the number could always change or the project could fall through if construction costs soared at even more unprecedented levels. But Cohen said his company doesn't expect this to happen.
The company has 90 days from the time the council approves the tentative agreement to submit a formal application. The developer will then have to spend about a year working on environmental studies.
"We feel very confident this project can be built in a way that makes financial sense and will be worth all of the trouble when finished," Cohen said. "I would say right now we are probably in the fourth inning of a nine-inning game."
Contact staff writer David Sterrett at (760) 901-4067 or dsterrett@nctimes.com.
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