Construction Resumes on Hotel Portion of Towers
After a six-month work stoppage caused by financial uncertainty and a change in ownership, construction has resumed on the hotel section of the $130-million Symphony Towers downtown office-hotel complex that also includes the San Diego Symphony’s auditorium.
Guy F. Atkinson Co., the San Francisco general contracting firm that took over control of the full-block project in September, said construction on the 24-floor, 262-unit hotel will be completed by October, about six months after the neighboring office tower is scheduled to open.
Formerly a limited partner in the project, Atkinson took control of the project from a group headed by Charlton Raynd Development of Denver after the group was unable to come up with $6 million to $7 million in additional capital to meet project cost overruns, Atkinson Vice President Don. E. Parmiter said in an interview Tuesday.
Atkinson was willing to provide the extra funds but insisted on acquiring the project, Parmiter said. However, Charlton Raynd has an option through December to reacquire the project under certain conditions. Atkinson’s Walsh Construction subsidiary is the project’s general contractor.
A Stark Silhouette
Ever since work on the hotel stopped in June, the hotel’s incomplete steel superstructure has cast a stark silhouette against the red granite, 34-story, 534,000-square-foot office tower gradually taking shape next door. The project, which began construction in January, 1987, is on the block bounded by A and B streets and 7th and 8th avenues.
Crews began laying more steel for the hotel Tuesday, however, and “topping out” is expected in mid-January, Parmiter said. The hotel is to be run as a Marriott all-suites franchise, probably by operator Interstate Hotels of Pittsburgh. Atkinson has not yet signed a management contract with Interstate, though.
Once Atkinson gained control of the project in September, it hesitated to recommence hotel construction because it questioned the strength of downtown San Diego’s hotel market, Parmiter said. The market had been softened by the opening of several downtown hotels over the past year, including the San Diego Marriott’s second tower, a Ramada Inn and an Embassy Suites hotel.
“A major issue was the perception in the financial community that most major U. S. cities, including San Diego, were overbuilt with hotel rooms,” Parmiter said.
Year-to-date occupancy through September in downtown hotels was a relatively strong 73%, down slightly from the 74.5% occupancy rate over the same nine months in 1987, according to a survey by hotel consultants Pannell Kerr Forster of San Diego.
‘Overflow Business’
Only after assurances from Pannell Kerr Forster that the downtown market was a viable one--particularly in light of the opening next year of the San Diego Convention Center--did Atkinson give the hotel the green light.
“We don’t see ourselves as a convention center hotel,” Parmiter said. “We’re too far away. But we will get some of the overflow business.”
When construction was halted in June, the parking garages that will serve both the office and the hotel had been largely completed, Parmiter said. All parking for both structures will be situated in the first few floors of the hotel tower and on several levels above Symphony Hall.
“The parking structure is expensive. If we hadn’t gone forward with the hotel, that would have been a tremendous cost that would have to be allocated to the office building,” cutting into profits from the office tower, Parmiter said.
Even had Atkinson decided to delay construction of the hotel, the company eventually would have built it. But, “like everything else, it’s going to cost less to build today than it will next year,” Parmiter said.
