Financing Is Approved for $57-Million Hotel Project

Construction on the $57.5-million Omni International Hotel is expected to begin in August following approval on Thursday of permanent financing for the downtown San Diego project, officials of the Centre City Development Corp. announced.

The 15-story, 450-room hotel is to be built on a 1.5-acre site between First and Second avenues adjacent to the $140-million Horton Plaza retail and entertainment complex, which is scheduled to open Aug. 9.

Peter Q. Davis, CCDC’s president, said that approval of the financing package by Teachers Insurance and Annuity Corp. of America “guarantees the development of a project which is an important element of the success of not only Horton Plaza, but also overall downtown redevelopment efforts.” The Teachers company also provided the permanent financing for the Horton Plaza project.

The hotel, scheduled to open in February, 1987, will cater to business travelers, according to Robert J. von Bereghy, executive vice president of Py-Vavra Development Inc., the Milwaukee-based firm developing the hotel. Py-Vavra previously had committed $9.5 million in equity and obtained a $48-million loan from the Bank of New York to finance construction.

Plans for the hotel were first announced in 1981, but there were doubts over whether the project would proceed when the original developer, Amfac Hotels & Resorts Inc., withdrew for internal corporate reasons in late 1983. Py-Vavra, however, assumed sole development responsibility for the hotel in October, 1983.

The delay in approval of permanent financing was due partly to the complexity of the project, and the fact that the hotel’s financing originally was combined with another Py-Vavra hotel project in Orlando, Fla., CCDC officials said. Financing for the two hotel projects have since been separated.

The hotel, expected to generate more than $540,000 annually in local taxes, will include conference space, two speciality restaurants and a 168-space parking lot.