If the economic pieces fall into place, a $700 million mixed-use residential project being planned by Pacifica Cos. of San Diego could be the first element of long-sought development to rise from the ground on Chula Vista’s bayfront, possibly in 2015.
Pacifica’s multiphase development, which would eventually have up to 1,500 waterfront condominiums, a 250-room hotel and related office and retail elements, was among several components essentially given the green light recently, when the California Coastal Commission approved the latest revised master development plan put forward by city and Port of San Diego officials.
Allison Rolfe, director of planning for Pacifica Cos., said the company will next be obtaining the necessary local permits and related approvals, as well as finalizing design and financing elements over the next 18 months.
“We’re going to be gauging market interest as we move forward with this in the next few months,” Rolfe said, referring to residential and commercial offerings being planned, including stores, restaurants and other support businesses to serve condo residents and visitors.
The project could break ground in the first half of 2015, and a future second phase would include a 250-room hotel whose format and branding have yet to be finalized, Rolfe said. At full build-out over the course of several years, the 35-acre project would have up to 11 residential towers.
Port and city officials have estimated that private developers will invest between $1.5 billion and $2 billion in projects along the 556-acre Chula Vista bayfront over the next 24 years. The latest long-term commercial plans call for up to three hotels with approximately 2,850 rooms; 220,000 square feet of commercial recreation and marine related offices, 100,000 square feet of restaurants; 245,000 square feet of retail; and 415,000 square feet of meeting and conference center space.
There would also be more than 240 acres of parks and natural preserves.
The first big order of business is obtaining a commitment from one or more commercial developers with comprehensive plans for the waterfront, with officials looking to see construction begin by late 2015 or early 2016.
That development team would likely replace Tennessee-based Gaylord Entertainment Co., which backed away from prior plans to develop the waterfront with hotels, a conference center and related elements after the economy soured four years ago.
Paul Fanfera, a principal involved in business development and project financing for the Port of San Diego, said port officials in the past six months have had “about a dozen” informal meetings in San Diego with national hotel development and investment banking industry representatives, primarily to give tours of the Chula Vista bayfront.
‘Life After Gaylord’
“We’re confident that there is enough interest out there, that there will be life after Gaylord if Gaylord does indeed decide not to return,” Fanfera said.
Port and city representatives noted that Gaylord’s future participation was placed in doubt by its recent announcement that it has agreed to sell its Gaylord Hotels brand and the rights to manage its four existing hotels to Marriott International Inc. for $210 million. When the deal closes, Gaylord plans to continue owning its hotel and related businesses, but will reorganize as a real estate investment trust.
Gaylord and Marriott officials could not be reached for comment, and Gaylord shareholders had yet to approve the reorganization as of press time. Fanfera said that as a REIT, Gaylord would likely be focused more on acquiring hotels than building new ones.
“If Gaylord still wants to make a proposal, they will be free to do so like everyone else,” said Gary Halbert, assistant city manager for the City of Chula Vista.
Halbert said city officials are anticipating strong interest among hoteliers and other commercial developers, since the Chula Vista bayfront represents one of the last large undeveloped waterfront areas of California, and the last major coastal space available for projects in Southern California.
City and port studies have projected that bayfront developments will create about 7,000 construction jobs and 2,000 permanent jobs, and generate $1.3 billion in new tax revenue over 20 years.
Fanfera said port officials are currently finalizing details for a request for consulting proposals, aiming to crystallize what officials want to see in future development proposals. Feasibility studies would likely be completed by year’s end, and officials are looking to have a development company or team in place by the end of 2013.
Among other issues, early development momentum will hinge on whether the local hospitality economy can sustain its current rebound mode, with local hotels registering strong growth over the last two years in revenue and room demand, though room rates have not returned to pre-recession levels.
“A lot of things, including the economy, are going to figure into what ultimately gets built there,” Fanfera said.