OCEANSIDE — The vote was unanimous and City Council’s accolades abound in approving a development agreement with S.D. Malkin Properties for a four star beachfront hotel Sept 10.
“It’s a 5-0 vote for the future of Oceanside,” Councilman Gary Felien said.
Negotiations to build the destination resort hotel began 12 years ago. The project weathered through the dissolution of California redevelopment agencies and funds and tools that went with that organization, including a $28 million developer subsidy from the agency.
“None of us bargained for dissolution of the development agency,” Jeremy Cohen, senior vice president of S.D. Malkin Properties, said.
Ongoing negotiations ironed out an agreement consistent with earlier entitlements. S.D. Malkin will buy the property for $1.5 million from the successor agency, and get a share of TOT generated by the hotel for 15-years totaling $11.3 million.
In turn the city will sell the property within bond limits, get all TOT after 15 years, and be assured of a four star hotel for 75 years.
City advisor and former city manager Peter Weiss explained why the $1.5 million selling price is a part of a good package deal for the city.
“The property was purchased with tax exempt bonds,” Weiss said. “There is a limit of what the property can be sold for without jeopardizing the tax exempt status of the bonds.”
“This is the best deal for this community,” Councilwoman Esther Sanchez said. “This community deserves the best.”
The Westin or Hyatt Regency hotel will span two block of Pacific Street. The north building will stand eight stories, boast 135 rooms, and will not include timeshare units proposed in earlier plans.
The south building will be reduced from eight to six stories, house 225 rooms, and include a 6,400 square foot ballroom.
There will also be 36,000 square feet of public open space, 20,000 square feet of meeting space and 18,500 square feet of commercial space within the project. All parking will be underground.
City Council is banking on the idea that the high quality hotel with extensive meeting space will bring in visitors with disposable income, and be a catalyst for other projects.
“A four star hotel will bring in new business,” Cohen said. “People will do things like attend museums, restaurants, and retail shops. We’re anxious to get out there and bring this to fruition.”
Council members gloated about future meetings, weddings and other events that will be held at the resort hotel.
“It could have been a Motel 6, that would not be beneficial to Oceanside,” Councilman Jerry Kern said.
TOT from the hotel building on the north block is expected to be $1.3 million annually, and the building on the south block is anticipated to bring in $2.1 million.
“This will be a feather in our cap,” Councilman Jack Feller said. “We deserve all the accolades in the world for pulling this off.”
The hotel will add 210 construction jobs paying prevailing wage, and 280 permanent jobs upon its completion in 18 months.
Construction is slated to begin in January 2016.