Port District Lines Up Manchester’s Affairs

Commissioners of the San Diego Unified Port District waded through a financial flood Tuesday, approving 14 ordinances and resolutions involving the partnerships and hotels owned or proposed by La Jolla developer Doug Manchester.

The approvals ranged from the major (consenting to a private $208-million financial agreement) to the minor (allowing more parking for smaller cars in a proposed hotel garage).

In between, the Port Commission agreed to let Manchester buy out one of his partners, Beverly Hill Savings and Loan, for $10 million and allowed the admission of a new limited partner, InterHotel Co.

Manchester, through his Torrey Enterprises and several partnerships he controls, is a business partner with the Port District. He has built the 681-room luxury Inter-Continental Hotel on waterfront property owned by the port and has proposed constructing a twin hotel tower next door.

Last month, Manchester announced an agreement with Home Savings and Loan Assn. of America involving a $118-million refinancing of the Inter-Continental and $90 million in construction financing for the twin tower, which is scheduled for completion by the end of 1987.

On Tuesday, the Port Commission gave its unanimous consent to the financial agreement between Manchester and Home Savings. In doing so, it let Manchester clear one of the last major hurdles toward construction of the second hotel.

Manchester faced an Oct. 31 deadline to obtain financing for the second hotel tower or risk losing an option to built a Hyatt hotel on a third site nearby.

Kipland Howard, senior vice president for Torrey Enterprises, said the Port District’s approval, which was required by Home Savings, was the last government action needed to close the loan.

The Port Commission also approved Manchester’s buy-out of Beverly Hills Savings and Loan at a cost of $10 million. The savings and loan had been involved as Manchester’s lender for the second hotel tower but that fell apart last spring when the lender was seized by federal regulators.

Christopher Neils, attorney for Torrey Enterprises, said the savings and loan will retain a 1% interest for favorable tax purposes, but Manchester maintains an option to buy back the 1%. Neils said he expects Manchester to exercise that option as soon as he can.

While Beverly Hills is out, InterHotel Co. Ltd. is in. That is the name of the limited partnership that will become Manchester’s limited partner in both of the Inter-Continental hotel projects, as approved by the Port Commission.

InterHotel Co. Ltd. will be the vehicle to find investors as limited partners, according to Neils.

Port commissioners, worried about the transfer of limited partners, approved a requirement either giving themselves the right to approve such partners or making it mandatory that such partners are “accredited investors.” The term is one used in federal securities law to describe those who are “wealthy, sophisticated, knowledgeable . . . your institutional-type investor,” said Alan Perry, the commission’s special attorney for Torrey Enterprises matters.

Under questioning from the commission, Perry said the accredited investor definition “deals more with investment knowledge . . . and deals little with moral character.”

Among the commission’s other approvals, it agreed to discount Manchester’s November rent for the Inter-Continental Hotel by $100,000 in exchange for the hotel’s permanent loss of 10 parking spaces. The Port District needs them as part of an easement for the $125-million convention center it is building next door.