As prospects for the Padres ballpark begin to take shape once again, the hotel that has been integral to plans for paying for the ballpark remains caught up in infrastructure and development issues.
The 1,200-room hotel on the Campbell Shipyard site located south of the San Diego Convention Center was originally scheduled to open in 2003. The land is owned by the San Diego Unified Port District, which has contracted with Manchester Resorts to develop the site.
The hotel is expected to generate $5 million annually in transient occupancy taxes, which are in turn expected to pay off part of the bonds the city plans to issue to finance its part of the ballpark. The project is part of the South Embarcadero Redevelopment Program, which is in the draft stages of its environmental impact report.
The port is now reviewing and addressing concerns sent in during the recent public comment period. Next month, a staff-recommended development plan for South Embarcadero is expected to go before port commissioners for approval.
Speeding up remediation of the Campbell site was a focus of action at the commissioners’ meeting Jan. 30.
The board voted to allow the port to form a joint powers authority with the city of San Diego that would, in effect, allow the Port to act as a redevelopment agency and accelerate the cleanup process, Vandergaw said.
Last year, the site was found to be heavily polluted. Campbell Industries had sold the site to the port for $16 million in 1999. After it didn’t meet the port’s deadlines for the site’s cleanup, the port withheld the $13 million remainder of its payment, setting aside the money to pay for the clean-up.
However, the port is now concerned the costs, which are not yet finalized, could exceed that $13 million, Vandergaw said.
The port wanted the redevelopment ability to allow it to seek potential parties that would help pay for the cleanup, she said. That group includes pre-Campbell users of the site.
Although clean-up on the land began last fall, the port is still finalizing a plan for the site’s waterside remediation. The plan will be presented to the Regional Water Quality Control Board.
Vandergaw didn’t know when the plan would be completed. The port is working on defining the list of the site’s previous users, she said.
As for finding financing for the hotel project, Manchester cannot approach lenders without the EIR being certified, the South Embarcadero plan being approved by the California Coastal Commission, and significant progress on building permits, said Peter Litrenta, Manchester’s senior vice president.
“A lender does not want to waste any time with you unless you actually have the entitlements in hand,” he said.
Litrenta said the pressure is on the Port District.
“It’s the port’s responsibility to provide to us a site that we can build a hotel on a clean site,” he said.
With the opening of the Convention Center expansion expected in September, prospects for booking larger groups will continue to be hindered by the lack of headquarter-sized hotels, say local tourism officials.
Currently, the only hotel that qualifies is the 1,354-room San Diego Marriott Hotel & Marina, also partly owned by Manchester.
Further along is the addition of a 750-room tower to the 875-room Hyatt Regency San Diego along Harbor Drive, another Manchester ter property. It would make that hotel large enough to be considered a headquarter hotel as well. Manchester is currently securing financing on the project, Litrenta said.
Reint Reinders, president and CEO of the San Diego Convention & Visitors Bureau, said although he’s pleased to see demand higher than supply for now, needs for headquarter hotels must be filled.
“In my opinion, these properties will happen,” Reinders said. With demand high, and the city’s occupancy and average room rates healthy, these hotel projects will appeal to financiers, he said.
Lacking additional headquarter hotels endangers San Diego in the long term, Reinders said.
“It’s going to be a competitive issue, no question,” he said.
As a convention destination, San Diego competes with West Coast cities such as San Francisco, Anaheim and Las Vegas.
Pat Shea, chairman of the Convention Center Corp.’s board of directors, said sales efforts for the expanded building are hindered by the lack of progress on a headquarter hotel.
Shea’s concerned that action not just take place on a headquarter hotel, but in a way that complements the Convention Center’s long-term needs.