West Covina Marriott Planned : Hotel Project Revived After Years of Ups, Downs for City

After nearly a decade of developers and deadlines falling by the wayside, the city entered into an agreement this week to bring a $34-million Marriott hotel to the central business district by late 1990.

City officials expressed hope that the agreement with Interstate Hotels Corp., a franchisee of Marriott Hotels and Resorts, will end the numerous setbacks that have thwarted plans for a $150-million project that would include a hotel, office buildings and retail space.

“I think this is going to happen. There’s no doubt about it,” said Councilman Forest Tennant, who previously has been skeptical about the project.

Interstate is the fourth developer to work on what has evolved into a project called The Lakes at West Covina. The proposed development, so named because it will have an acre and a half of sculptured fountains and ponds, covers 21 acres at an area bounded by State Street, Garvey Avenue and the San Bernardino Freeway.

“I think that this time it is coming together,” said Councilwoman Nancy Manners.

“The frustration has been in the last three years because it was ‘any time now,’ and it never happened,” she said. “It’s like a pregnant woman. After nine months, it becomes a question of ‘when, when, when. . . .’

“What I’m happy about is that we didn’t settle for anything less in our anxiety to get something.”

Councilman Robert Bacon went so far as to thank New York real estate magnate Donald Trump for initiating an attempt to take over Holiday Corp. in late 1986. City officials had blamed the takeover bid for the loss of a proposed Holiday Inn.

Bacon indicated that the city is better off with the Interstate deal, though at the time he and many others had doubted that any major hotel would buy into the project after Holiday Corp. pulled out.

“It’s changed hands a lot,” Bacon said. “But it’s just one of those strange things.”

Neither the developers nor the market conditions favored earlier attempts, Bacon said.

Interstate has agreed to build a 14-story, 220,000-square-foot Marriott hotel with a minimum of 300 rooms. It will be similar to other Marriott hotels, Dale E. Moulton, Interstate’s vice president for real estate, said at Monday’s council meeting.

Under franchise agreements, the Pittsburgh-based Interstate operates 16 Marriott hotels and has nine others in development, including two in San Diego.

“The public will not be able to tell if it is a Marriott-owned-and-operated hotel or an Interstate,” Moulton said. “They are virtually the same.”

Rooms are expected to rent for $75 to $85 a night, said Chester Yoshizaki, manager of the West Covina Redevelopment Agency.

The Redevelopment Agency estimates that the city will reap more than $1 million a year in bed and sales taxes, plus license and other fees. The agency will continue to own the land. The rent will rise gradually from $50,000 for the first year to $305,000 for the 10th year, regardless of whether the hotel is making or losing money. After 10 years, the rent will be set at 3% of guest room revenue.

Karan Johnson, the agency’s project coordinator for the hotel, said signing Interstate brings the project closer to fruition than any of the previous attempts.

“I think it’s the home stretch, except that we have two more hurdles,” she said.

One hurdle is that the Redevelopment Agency must acquire 1.6 acres of land from Home Savings of America next door, which would be added to the 4.5 acres already allotted for the hotel. In addition, Interstate must obtain financing for the project, she said.

Interstate will pull out of the project if the additional land cannot be secured, Moulton said.

“We are not interested in building a needle on a four-acre site,” he said.

Interstate needs the Home Savings land to accommodate the minimum 300-room hotel as well as a 730-car garage for visitors and guests.

For years, Home Savings has planned to erect a six-story building similar to one that exists on the south end of its parcel.

In exchange for the land, the Redevelopment Agency wants to give Home Savings a nearby half-acre of city-owned land to the north, plus an unspecified sum of money, so that Home Savings can complete its expansion.

Mary Trigg, a spokeswoman for Home Savings, said the company was confident that an agreement could be reached.

“We wholeheartedly support both the city and Interstate in bringing in the Marriott,” she said.

The Redevelopment Agency has been negotiating with Home Savings since November and sees no problems in reaching an agreement, Yoshizaki said.

“They are not opposed to it as long as they can get their building,” he said. “I think it’s a mutually beneficial situation.”

City officials, who have discussed the matter with Interstate, said they expect the company to secure financing within two months.

‘All But Wrapped Up’

“We have been privy to information that the financing side is all but wrapped up,” said City Manager Herman R. Fast.

Moulton said Interstate has been working for six months to lay the groundwork for the deal.

Interstate was interested in the West Covina project because of its mixed-use concept. Moulton cited the benefits of locating near a large office development, easy access to the San Bernardino Freeway and a potential drawing pool of 1 million people in the San Gabriel Valley.

Unlike Marriott, Interstate prefers suburban locations, Moulton said.

“We think West Covina is a very unique and exciting opportunity for us,” he said.

‘Aware of History’

Noting the past problems with the project, Moulton guaranteed Interstate’s commitment to The Lakes project.

“We are aware of the history of the project, and we would like you to know . . . we’re not here to waste anyone’s time,” he said.

First proposed as the Atrium, the project originally would have featured a huge glass enclosure linking the hotel to office facilities. But the first developer, COGO, pulled out in 1980 after losing a partner.

Equidon Investment Builders of Irvine then proposed building two eight-story office buildings. Equidon’s involvement ended in 1985 when the company became over-extended, city officials said.

In October, 1986, the project lost both the atrium concept and the backing of Holiday Corp. when the Trump takeover bid forced the hotel company to consolidate, Yoshizaki said.

At that time, city officials vowed to scale down their plans but continue the project with Watt Investment Properties, based in Santa Monica.

The city has spent $9.2 million to acquire the site, the oldest commercial area in West Covina, and to relocate about 70 businesses.

Office Buildings

The hotel would be part of the first phase of the project, which also would include two four-story office buildings of 180,000 square feet each and a group of distinctive lakes covering about 1.5 acres. Later plans include retail space and twin business towers.

Watt took over the project in 1986 and remains the contractor to develop the office space. Watt officials say they hope to break ground by late this year.

Councilman Tennant, a frequent critic of Watt, sought assurances from Interstate’s Moulton that his company’s development was not tied to the Watt plans.

“We are prepared to proceed with or without Watt,” Moulton said.

Tennant said Interstate’s national standing eased his concerns about the project.

‘Shake and Jive’

“This company has a national reputation,” Tennant said. “And given their visibility, they can’t come in and give us the shake and jive we’ve gotten from all these local people.”

Regarding the Watt portion of the development, Tennant said he has taken a “show me, don’t tell me” position.

“I have to see it to believe it,” he said. “I don’t believe that we can take Watt’s word for anything. They are a company that can deliver, but we’ve been misled on many other occasions.”

Roger O. Williams, senior vice president for Watt, said his company should get financing by mid-March and begin construction in the fall.

Admits Problems

“We have missed deadlines; we don’t deny that,” Williams said. “But we’ve always worked with the redevelopment staff.”

Williams said Watt remains “thoroughly committed” to the project and added that he is delighted that Interstate has agreed to work with the city.

City officials said signing Interstate should make it easier for Watt to get started.

“I’d be very dismayed if Watt wasn’t wrapped up in the next 30 or 60 days, given the new impetus,” City Manager Fast said.