Carson Grants Final Chance to Hilton Hotel

Rejecting accusations by one City Council member that this city has turned its pursuit of a Civic Center hotel into a “charade,” officials have agreed to give a Hilton developer a final chance at building his proposed $22-million project.

After reviewing four alternate hotel proposals, the council--acting as the Carson Redevelopment Agency--decided this week to proceed with its two-year effort to construct an 11-story, 248-room Hilton, as proposed by the Long Beach-based Feinberg Group.

City officials have long viewed the proposed Hilton development as a vital centerpiece for their largely industrial city, which many say has suffered from chronic image problems. The Hilton, to be built at 941 E. Carson St., would join Carson’s contemporary City Hall and Community Center in helping to establish the city as a hub for high-quality development, officials have reasoned.

Discrimination Charged

But during the council’s deliberations this week, Councilwoman Vera Robles DeWitt alleged that the group’s zeal for such a high-quality hotel as the Hilton has led to discrimination against other developers. Carson currently has more than $4.2 million invested in its hotel site, formerly a Peyton-Cramer auto dealership.

DeWitt said she agreed with a motel developer’s allegations that the city has not acted evenhandedly toward prospective developers, giving preference that was not “morally, ethically or legally justifiable” to the proposed Hilton project.

And as council members discussed their intent to pass over the alternate proposals and go with the Hilton, DeWitt charged, “You mean this was an exercise in futility? This was a charade? Why didn’t we tell the Feinberg Group to go ahead (and pursue their development) three months ago instead of going along with this charade?”

DeWitt, however, was not present in council chambers when the group voted 2 to 1 on the matter. She has since been unavailable for comment. Mayor Kay Calas did not participate in hotel proceedings because she owns property near the Civic Center. Councilwoman Sylvia Muise opposed the measure to allow the Feinberg Group exclusive rights to the city-owned property.

Others Invited

The Feinberg Group lost its claim on the hotel site in mid-November when it failed to come up with financing. The council had already extended the option once and voted down the developer’s request for another extension. Shortly afterward, a frustrated council invited others to make hotel proposals.

The council considered five formally submitted proposals--including a reapplication by the Feinberg Group--at Monday night’s meeting. After reviewing a staff report that described the Feinberg proposal as offering “the best hotel product” with the “shortest turn-around time,” Councilman Thomas Mills suggested that officials give the developer one last shot at commencing construction within 90 days.

“I don’t believe this council took part in any charades,” Mills said. “I believe this council in clear conscience went out to bid and reviewed all of the proposals. We want a quality hotel built as rapidly as possible; Feinberg can do that.”

The Feinberg Group, owner and developer of the Queensway Bay Hilton in Long Beach, has an investment of more than $600,000 in the Carson hotel project, according to executive vice president J. Jay Feinberg.

Setbacks Blamed

Feinberg told the council he believes that a series of unforeseen setbacks at the hands of both financial institutions and Carson officials is responsible for previous delays in his project.

He said he is still committed to the development, although he said he has been told he is “crazy to want to spend $22 million on a Hilton hotel in Carson. We’ve taken a lot of arrows but that’s the role of a pioneer. We believe there is a market here, and we believe we can make a great contribution to the city of Carson.”

Among setbacks Feinberg has cited was a decision by one of his lenders to withdraw a major loan because the lender decided that Carson is not a suitable location for a Hilton development.

Feinberg said that he now believes he can pull together the financing for hotel development within the next 90 days. “If we can’t put this to bed within 90 days, then it will die,” he said.

More Money Needed

Feinberg said his group has already obtained a construction loan commitment of $13.5 million for the Hilton project. To complete the $22-million project, however, Feinberg needs several other approvals from major lenders, including possible financial support from the city.

Carson officials instructed their staff to work on terms for possible city participation in the hotel project, which could involve a $2-million loan or a limited city partnership. That matter is expected to be considered by the council in April.

Despite the tentative state of the hotel project, some officials say that the council’s action this week puts the Hilton nearer realization than it has ever been.

“I think the Feinberg hotel is going to go through now,” said Councilman Walter J. Egan. “Feinberg has gone through a lot of setbacks, but I think the man has a good product and is going to build a hotel. I think it’s further along now than it’s ever been.”

Said Mills, “I’ll feel certain when I see a shovel go in the ground, but, by far, it’s the most advanced situation we’ve seen in a long time.”

Deadline Implied

He added, “But we’re not looking to see any more obstacles from Feinberg. If he can’t do this within 90 days, I perceive the tone of the council was to give someone else the opportunity to develop it.”

Carson officials discussed the possibility of allowing So Cal Hotel Development Corp., doing business as Dynamic Investment Enterprises Inc. of Anaheim, to proceed with its hotel proposal in the event that the Feinberg project fails to move forward. Dynamic has approached the city on numerous occasions during the last five months asking that the group be allowed an exclusive claim on the property.

DeWitt proposed at Monday’s meeting that the council allow Dynamic to proceed with its proposal. Her motion failed.