8 Developers Parade Plans for Hawthorne : All Suggest Hotels, Restaurants for Redevelopment of Gateway to City
Eight developers paraded their dreams in front of the City Council this week, each with the hope of becoming surgeon for the face lift of a blighted area.
City officials are perusing the proposals for redevelopment of a 20-acre site along the San Diego Freeway at Rosecrans Boulevard that they hope will bring the city added revenue and become a landmark in the South Bay.
The council on Monday voted 4 to 0 to hire a consulting firm to evaluate the proposals. Councilman Steve Andersen abstained because his law firm represents two of the developers.
Some developers’ estimates of city tax revenues from their proposals are “overly optimistic and others . . . are overly conservative,” City Manager Kenneth Jue said. “But we expect to net $500,000 to $600,000 a year in revenues.”
Main Goal: Taxes
The development should also help give the city a sense of identity, Jue said.
“It’s on a key location--at the gateway to the city and the aerospace industry,” he said. But he acknowledged that the main purpose of the redevelopment plan--besides upgrading the area--is to bring in tax dollars.
The city expects to select a developer within two months but it will probably be at least two years before ground is broken, Jue said.
The four-block area is occupied by several homes, light industrial facilities and commercial buildings, said Bud Cormier, assistant director of redevelopment. The city expects to purchase those properties for $18 million to $20 million--probably raising the money by selling bonds--and sell the land to the developer, Jue said.
Financing the development will use a sort of bootstrap technique based on the increase in property taxes from the site. The plan works like this:
The development will greatly boost taxable value of the property--and thus property taxes. The city will set aside part of the additional tax revenue, which it can use to pay off bonds to buy the land, improve streets and pay for other aspects of the project. Once the bonds are paid off--which could take 40 years--the additional taxes would go to the city. The city benefits immediately from any sales taxes generated by the development.
Besides gaining tax revenues--which most developers estimated at more than $1 million a year--the city hopes to strengthen its job market. As many as 4,000 people would be employed under one proposal.
The development, however, also will “substantially increase” daily traffic flow from the current 221,000 vehicles on the San Diego Freeway and 42,000 on Rosecrans Boulevard, Jue said.
As for relocation of property owners, Jue said: “It’s going to be tough, but we’ll get it resolved.” All proposals by developers must include a way to pay $3.6 million in relocation costs. Cormier said the city knows of no opposition to the project among property owners.
Council Wants Hotel
He said the City Council told developers it wants a plan that includes a hotel and restaurants. Of the eight proposals, seven include at least one hotel and all include restaurants. Most also include office space.
Some specifics on each plan:
- Watt Investment Properties Inc. proposes a 300-room hotel, two 16-story office towers, four parking structures and four other office buildings for a total of 1.3 million square feet. The developer estimates that the city will get $1.7 million annually in tax revenues, while overall development will cost $238 million.
- Hawthorne Gateway Associates, a partnership that a city official said was formed to bid for the development, is offering a complex of 16 structures, including a 408-room hotel and a 16-story office tower. The 959,000-square-foot project includes a convention center.
- Blakesley Comstock Development Co. of Manhattan Beach is proposing a 300-room hotel with a two-level conference center and two restaurants in a 14-building, 1.4-million-square-foot project. Six office buildings of three or six levels and additional restaurants are also proposed. The company estimates that the city will reap $1.35 million a year in taxes.
Other Proposals
- Zelman Development Co. is offering a six-building plan that includes a 150-room hotel, office space and retail stores totalling more than 350,000 square feet. All parking would be outdoors.
- Overton, Moore & Associates Inc. told the City Council it hopes to build a 200-room Marriott hotel as part of its 885,000-square-foot project. Four office buildings of four to six stories are included, along with a restaurant and retail space.
- The Andrex Co. proposes a 900,000-square-foot complex that includes a 14-story, 256-room hotel, a low-rise hotel of 206 rooms, a 16-level office tower, an office building of three stories and three restaurants. The architects, Pereira Associates, designed the Toyota headquarters building in Torrance and the Transamerica tower in San Francisco.
- Westar has proposed a 266,000-square-foot retail center of nine one-story buildings.
- The Koll Co.’s proposal is largest--1.5 million square feet. It includes a 300-room hotel, at least two restaurants and five office buildings, the largest 20 and 16 stories.
