Cerritos : Hotel Debt Limit Raised

To help the developer of Towne Center obtain financing for a planned eight-story hotel, the Cerritos City Council has approved several changes in the center’s development agreement.

In a special closed session, the council by a 4-0 vote (Councilwoman Diana Needham was absent) agreed to let Transpacific Development Co. take out an additional $2 million in loans on the $24-million hotel project, raising the project’s debt limit from $16 million to $18 million. Should the company default on its bank loan, the council has also agreed to assume the debt.

In return for those concessions, city spokesman Michelle Ogle said the council is requiring a $130,000 minimum annual rent from Transpacific. Under the previous arrangement, the company was to pay the city 5% of its room revenue and 2.5% of its food and beverage revenue.

The hotel is one of the centerpieces of the long-delayed Towne Center, a commercial-office complex that is to rise on 125 vacant acres of city-owned land across Bloomfield Avenue from the Civic Center. Transpacific has been negotiating with the Sheraton Corp. to operate the 203-bed hotel.