Carson Approves $75-Million Plan for Hotel, Offices
The City Council this week gave developers approval to proceed with long-deferred plans to build a $75-million hotel and office complex near Carson’s civic center, bringing the city closer to altering its detested reputation as a home for municipal scandal and smelly industrial facilities.
Approval of the project is the first bit of positive news in some time and particularly welcome after two weeks of turmoil surrounding the ouster of former City Administrator John Dangleis and his replacement by Richard Gunnarson.
“It has been a long time coming,” said council member Sylvia Muise, a longtime supporter of the project.
“It is going to give us identity (viewed) from the 405 (Freeway) corridor, perhaps international identity . . . “(bringing) more recognition . . . that we are an aggressively developing community.”
Benefit Seen in Jobs
Hotel developer Christian Frere, president of Gestec Properties, said, “I am very confident that the council members are going to do their best to promote Carson and the hotel.”
The city also expects to benefit from the the addition of 1,000 permanent jobs, increased bed taxes, enhanced use of Carson Community Center’s conference and banquet facilities and the creation of an area that will serve as the city’s central core, city officials said.
“I see it as the hub of the city,” said Muise.
The project would include a $60-million, 220-room Ibis hotel and a $15-million, six-story office building on a 6.3-acre tract next to the Community Center.
Demolition of a vacant car dealership building on the site could begin as early as July 1, developers said, and both structures could be erected within a year.
The city has agreed to sell the parcel, which was once a junkyard, to the developers, who say financing is in place, for $3.05 million.
The Ibis hotel will be part of the Paris-based Accor S.A., which, with 550 hotels and 2,000 restaurants, is the fourth-largest hotel company in the world, according to Gestec’s Frere. Gestec is the development arm for Accor’s Ibis line of hotels. Accor revenues in 1985 were $13 billion, and the firm posted profits of $360 million, he said.
The Carson hotel is part of an Ibis expansion program in the United States, and Gestec, based in downtown Los Angeles, is seeking other sites for hotels, Frere said. Ibis hotels in the United States include a motel in Anaheim oriented to the tourist market, a hotel near the San Francisco airport and one in Atlanta.
The Carson hotel will be designed for the business traveler, Frere said, and is already being marketed to travel agents through the Accor’s international reservation system, known as Resinter.
40% Leasing Reported
The office building nearby will have 131,000 square feet of floor area. It is already 40% leased, according to Steve Muller, president of the Muller Co., the developer. Tenants, whom he declined to name, include a bank, an architectural firm, a computer software company and a dentists’ management agency, Muller said.
The city’s efforts to get a hotel for the site have been plagued with difficulties.
The city bought the site from Ford Motor Co. for $4.2 million in 1984 to help the Feinberg Group, which wanted to put a Hilton hotel there, according to Adolfo Reyes, acting community development director.
Reyes said the city expected to hold the property for only six months, while the Feinberg Group was arranging financinng, and sell it to them at cost plus carrying charges. An appraisal paid for by the city valued the property at $5 million, Reyes said.
In September, 1985, J. Jay Feinberg, vice president of the Feinberg Group, said financing was unobtainable and announced that his organization was abandoning the project.
“What started off as a six-month period actually took probably 10 to 12 months before they ultimately walked off. They paid us about $150,000 in holding costs through the process,” Reyes said.
L.A. Group Also Bid
The city again sought proposals. Gestec and a Los Angeles development group known as Wolff, Sesnon, Buttery put in bids.
In the Wolff proposal, the land price was to be $1.8 million and the developer sought a five-year rebate on bed taxes, Reyes said. Gestec was chosen, Reyes said, because it was willing to pay $3.25 million and sought no tax rebate. Also Frere brought in Muller as a partner, Reyes said.
On Feb. 3, 1986, the city, Gestec and Muller signed a disposition and development agreement that gave them the right to negotiate final details on an exclusive basis.
On Feb. 27, 1987, after several extensions and lengthy negotiations, the agreement lapsed without a deal. The city and the developers continued negotiations without a contract.
On April 1, Frere wrote the city that he wanted to change the terms outlined in the disposition and development agreement. Pleading competitive financial pressure from a number of new and planned hotels in the South Bay, Frere said he wanted out of a provision that would have required him to reconstruct a parking lot on adjacent city-owned land. In return, he offered the city 6% ownership in the hotel.
A redesign of the parking lot, which would be used by the hotel, office building and the community center, was needed because more parking spaces were needed and the location of the new buildings required reconfigured exits and entrances.
Council members rebuffed Frere’s offer, saying that the city should not be in the business of owning a hotel.
At a City Council meeting Monday, which came after discussions with the developers, the community redevelopment staff recommended that the city reduce the purchase price of the land by $200,000--about half the estimated cost of the parking lot reconstruction. The staff also recommended that the developers pay $30,000 for the option to continue negotiations and stipulated that the sale of the land be completed by June 18.
Added Concession Sought
Frere sought but did not get an additional concession. He asked that the city bear the risk of any cost overruns connected with rebuilding of the parking lot and limit his costs on that portion of the development to $200,000.
Uncertainty about costs arose because soil conditions make estimating the parking lot reconstruction difficult, according to Reyes. Reyes said that there is ground water three feet beneath the surface of the land, which was originally a lake bed, making it difficult to determine how much landscaping will cost.
“I don’t think it is such a big deal but it is something to be aware (of). You can always put (in) weeping willows. Trees that like water,” Frere said.
Council member Michael Mitoma, who has been critical of the city’s handling of the hotel negotiations in the past, charged at the meeting that the staff recommendation had been “poorly negotiated.” He suggested that the council appoint a two-member committee to continue negotiations with the developers, but his motion died without a second.
However, Mitoma’s suggestion that the option price be raised from $30,000 to $100,000 was adopted.
Council members, after prodding by community activist Marvin Clayton, also required that the developers adopt an affirmative action plan that would cover both the construction and operation of the hotel and office buildings.
The vote to approve the amended staff recommendation was 4 to 0, with Mayor Kay Calas absent.
After the vote, Mayor Pro Tem Vera Robles DeWitt addressed the developers, who were in the audience.
“Let’s move,” she said.
