Port Nears Choice on Builder for Shipyard Hotel
BY TANYA RODRIGUES
Staff Writer
A developer for the 1,200-room hotel on the Campbell Shipyard site could be decided this week by San Diego Unified Port District commissioners.
The hotel, planned as a headquarters hotel for the recently expanded San Diego Convention Center, is considered vital to the city’s future as a destination for larger and more profitable meeting and convention groups.
Commissioners are meeting May 7 and are expected to choose one or two of the four proposals submitted. In December, the board selected four groups to take part in the first phase of the request for proposals.
A staff report on the topic, released in April, recommended choosing the group that would develop the hotel under the Hilton Hotels Corp. brand.
Hilton San Diego Convention Center, LLC, consists of Beverly Hills-based Hilton, Portman Development LLC, Phelps Program Management, LLC, Waterford Development Company LLC and Lankford & Associates, according to the report.
The other three groups examined were: M.L. Hotels LLC, a partnership of Marriott International, Inc. and Landmark Organizations, LP; TUDC, LP, formed by Tishman Urban Development Corp. and THR Management LP; and Maritime Venture Partners, LLC, which consists of Mesirow Stein Development Services, Inc. and Clark Construction Group, Inc.
According to port spokeswoman Rita Vandergaw, the staff liked several things about the Hilton proposal.
“What it came down to, from the staff’s perspective, was that Hilton could deliver it earlier, and that we had to put in less of an investment on the port’s side,” she said.
The Hilton group wanted to accelerate opening the hotel by starting construction before the design work is finalized.
“They could deliver the hotel almost a year earlier than the proposals that came from the others,” Vandergaw said.
Portman had more experience than the others among the prospective developers, she said.
The conventional financing program the Hilton group outlined was also appealing, she said.
According to the port’s report, the group proposed a capital structure of 50 percent debt, 20 percent developer equity, and 30 percent of the money coming from a major institution. The group expects the hotel to cost $253 million, the report said.
At the soonest the hotel would be built by early 2006. The Hilton group said financing could not be sought until late 2003.
The timing sounds correct, said local hotel analyst Bob Rauch.
Rauch said it was very important, however, that the port check the qualifications and track record of whoever they select.
On Tuesday, the board will also decide whether to refund $100,000 each group gave to the port as a deposit.
The board had told them last month it was not refundable, but commissioners decided to look at it again, Vandergaw said.
Originally, commissioners told the groups the money would be refunded if none of the four were chosen, she said.
Last week, Vandergaw said the report could be changed by the time of the meeting, but she had no other details.
