Manchester Beats Port Deadline : Developer Still Faces Obstacles in Plan for Hotel Tower

Doug Manchester, the controversial developer of the San Diego Hotel Inter-Continental, moved a step closer Wednesday to construction of two more bayfront hotels--but a bigger step lies ahead.

Beating a deadline set by the San Diego Unified Port District by one day, Manchester submitted signed agreements with lenders and business partners that will enable the Port District to divide the Inter-Continental site into two parcels. The move would help Manchester acquire financing for his second hotel tower adjacent to the San Diego convention center.

Manchester, owner of Torrey Enterprises, now faces a more formidable port deadline of Oct. 1. By that day, he must obtain the construction loan and commence work on the second tower, or lose his option to build a Hyatt hotel on a third site nearby.

Civic leaders and government officials view hotel construction as a key element in the economic rebirth of downtown San Diego. Tourism officials are worrying that the area will not have enough hotel rooms to serve major conventions, while port officials are counting on rents from those rooms to help recoup the estimated $125-million cost of the convention center.

In meeting the Aug. 1 deadline, Manchester submitted signed agreements from Home Savings of America, the federal regulators now administering Beverly Hills Savings & Loans, and the Inter-Continental hotel chain--entities that all have a stake in the property. Home Savings is the lender on the project, Beverly Hills Savings & Loan is an investor, and Inter-Continental operates the existing hotel tower.

By dividing the parcel, Manchester has removed an obstacle toward obtaining the construction financing for a second tower.

Kip Howard, vice president of Torrey Enterprises, said recently that the firm has made substantial progress and is close to announcing terms of a loan for the second tower.

However, port officials have been less than optimistic. “He (Manchester) has got a very difficult task before him, and it’s hard to be a raving optimist,” said Port Commission Chairman Bill Rick.

If Manchester fails to meet the Oct. 1 deadline, the Hyatt site, between the existing Inter-Continental and Seaport Village “is up for grabs,” Rick said.

Manchester would retain his leasehold on the Inter-Continental site, and perhaps build a second tower at some later time.