City Pays on Long-Delayed Deal : Torrey Pines Golf Range Traded for Hotel

The City of San Diego paid its first installment Tuesday in a $2-million deal aimed at replacing the golf driving range at Torrey Pines Golf Course in La Jolla with a 400-room luxury hotel and aerobics center.

The deal was approved unanimously Monday by the City Council, breaking a two-year stalemate between negotiators for the city and Wansa Enterprises, which owned the rights to part of the city land until 1992. The balance--$1.8 million--will be paid to Wansa by Sept. 30, 1987, if the city exercises its option, as expected, and asks the firm to leave the property.

Wansa leased about five acres of city land near the golf course in 1976 for $200,000 a year, said Assistant City Atty. Curtis M. Fitzpatrick.

But the city decided in 1983 that it wanted to do something different with the property, which is near Scripps Clinic and Research Foundation, and it invited developers to submit plans for a 400-room hotel and aerobics center to replace Wansa’s driving range. Sheraton won approval for its design, which would cover 15 acres in all.

Since then, Wansa and the city have been unable to agree on how much it would cost to buy out Wansa’s lease. An appraisal by the city estimated the value at $675,000, while appraisers hired by Wansa estimated $4 million, said Fitzpatrick. Plans for the Sheraton were put on hold until the deal was consummated Monday with the City Council vote.

John M. Roberts, Sheraton’s senior vice president in charge of developing the hotel, said the projected completion date for the 400-room structure is the first quarter of 1988.

Fitzpatrick said Tuesday that the initial $200,000 installment paid to Wansa came from public monies in the city’s emergency reserve fund, but the remaining $1.8 million will not come from the taxpayers. He said the balance will be paid from advance lease payment for a new pro shop, an aerobics center, and the Sheraton, which alone is expected to pay $500,000 up front.

The new lease for the Sheraton hotel and aerobics center will bring in at least $1 million a year, Fitzpatrick said.

The adjacent Torrey Pines Inn will not be affected by the city’s plans.