Newport hotel wins vast support

Hotel and Accommodation Industry

Residents lined up this week to support construction of a hotel at Newport Beach's old City Hall site on the Balboa Peninsula.

More than 20 public speakers told the Newport Beach City Council during a Tuesday afternoon study session that they favor that option over a combination residential-commercial space.

The city is considering three proposals to redevelop the 4-acre site at 3300 Newport Blvd. — two of which are boutique hotels.

Each developer presented the council with a vision for the location, which was vacated this month when the city moved its operations to a new Civic Center near Fashion Island.

RD Olson Development hopes to build a 130-room “Newport nautical” hotel called the Lido House.

The building would be set back from public roads and feature a signature lighthouse-style tower at Newport Boulevard and 32nd Street, with public parkland along Newport Boulevard, company chief executive Bob Olson said.

The company analysis estimates the development would bring in $400 million of direct and indirect revenue for the city over the next 10 years, including about $1.7 million in transient occupancy taxes annually.

At the city's request, RD Olson would also leave two mature ficus trees in place along the boulevard.

“Our plan is realistic. It's financeable and something our community wants,” said Olson.

Olson noted during the presentation that he lives in Newport Beach. “We're local. We understand our community,” he said. “We live here. We have a stake in this.”

Sonnenblick Development showcased a hotel plan that incorporates 20 townhouse rooms with rooftop decks and 12 stand-alone villas into its 148 unit-facility.

The Auberge Resorts Newport Beach would feature a public courtyard behind the main hotel building and invite residents into its spas, lounges and rooftop decks.

The Auberge would pull in about $1.6 million for the city annually in transient occupancy taxes, Sonnenblick partner David Rose estimated. 

He added that the hotel would bring in $682 million in total revenue for the city over 10 years based on the lavish spending from the average guests at the hotel's locations around the country. 

The Shopoff Group is the only developer to propose a mixed-use commercial and residential plaza. It would include 99 residential units and 15,000 feet of residential space.

The goal would be to attract long-term renters to the 1,500-square-foot units for $5,000 to $6,000 per month.

More than an acre of public space would be woven through the plaza in the form of greenways and town squares.

It would not bring in lucrative transit occupancy taxes to the city, but the developer would make up for that by paying the city more for the lease on the old City Hall site, CEO Bill Shopoff said. 

“I think that is a more stable source of income,” he added.

All the projects drew praise from council members, and they all may have to clear a similar hurdle of approval from the California Coastal Commission. A city staffer said the Coastal Commission has charged similar hotel developments a one-time fee of $30,000 per room.

The mixed-use development may not be subject to that fee, but residential development could be a harder sell than a hotel, said Kim Brandt, Newport's community development director. 

Parking marked a significant difference in the two hotel proposals.

Lido House would leave space essentially the same, including a public lot along 32nd Street.

The Auberge would remove that lot but add underground parking.

“We do not feel that putting parking out on the streets is the answer for this hotel,” said Robert Sonnenblick, principal of Sonnenblick.

After the developer's presentations, the public speakers parading to the microphone said they favored a hotel.

Hugh Helm, representing the Lido Isle Community Assn., said his residents group conducted a poll across the island. Only 1% supported a residential development, he said, with 98% favoring a hotel.

“That's an incredible mandate,” he told the council.

He and others echoed a need for economic stimulus in the area, which they said a hotel would provide. Some tried to shame the council for even considering otherwise.

“I think we get a sense of where public opinion is on this issue,” Mayor Keith Curry said, raising laughs after public comments concluded.

City staff will consider the financials of the project before returning to the City Council with recommendations.

All the proposals are available to view online at www.newportbeachca.gov/cityhallreuse.

 

Copyright © 2014, Los Angeles Times
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