Failed Negotiations : Push for a Posh Hotel Falters in Pico Rivera

Despite impressive strides to revive sections of the central business district, attracting a first-class hotel as a cornerstone for the city’s redevelopment push continues to prove elusive.

Last month city officials abandoned any further attempts to strike a deal with a Scottsdale, Ariz., firm to build the $24.5-million hotel and shopping complex on the southeast corner of Rosemead and Washington boulevards.

Western Capital Industries Inc. first expressed interest in the project, known as the Club Caribeno Inn, a year ago. But when the company failed to negotiate a development agreement or deliver specific plans by mid-March for the 7.85-acre site, City Manager Dennis Courtemarche said the council opted to look elsewhere for a builder.

The city manager said that about two dozen developers have contacted the city in recent months about the site across from Northrop Corp. But David Caretto, Courtemarche’s assistant who oversees redevelopment projects, said only one firm has emerged as even a “semi-serious” contender at this point. City officials declined to name the firm or give specifics of its plans for the site.

‘Back to Square One’

“We’re back to square one,” said Councilman Alberto Natividad, one of three council members who were reelected last week and had stressed repeatedly during the campaign that the hotel was still a high priority. “This city needs that project very, very badly. I am reasonably sure that most of the council still wants to push ahead, despite our setbacks.”

Gil De La Rosa, who succeeded Natividad as mayor Tuesday night, agreed that a 250-room hotel is needed to draw other business and development to the city. However, the new mayor added: “Other cities have gotten the jump on us. . . . Each day that passes lessens our chances to get one.”

Next door in Whittier, an eight-story, 200-room hotel recently opened, while similar hotels have also opened in recent months in La Mirada and Downey. Officials of the Whittier Hilton--a $14-million facility with meeting and banquet rooms in Uptown Village--expect that initially 85% of their business will come from traveling business people, many them having dealings with Northrop, one of the area’s largest employers. Whether there is demand for still another hotel in southeast Los Angeles County is open to debate.

Courtemarche acknowledged that delays in the Pico Rivera project and a changing marketplace may eventually alter the scope of the hotel. “What the city originally wanted and what it gets may be two different things,” he said.

No Plans for Revision

Caretto said the city has not had “the interest that we hoped for” when the project was first proposed.

Despite frustration over the project’s progress, Courtemarche said, there are no plans at this time to scale down the planned hotel or scrap it altogether.

On paper, the project is important to Pico Rivera’s future. The Redevelopment Agency expects the hotel project to create about 250 to 300 jobs and generate nearly $500,000 in annual revenue. The hotel would have conference and ballroom facilities for 500, about a dozen meeting rooms and 7,552 square feet of commercial space.

The proposed hotel site is really a series of smaller parcels, including several vacant lots, a couple of old houses and a motel. If a developer can be found, Caretto said, the city will attempt to negotiate with the owners to sell their properties. But he added that the council has a track record of using its condemnation powers if property owners located in redevelopment zones refuse to sell to the city.