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Oceanside to Pursue Harbor Hotel Project

Times Staff Writer

Undeterred by failures, Oceanside leaders are determined to revitalize the city’s harbor area and have once again begun negotiations with developers to lure a major resort hotel to the waterfront.

Earlier this week, the Oceanside City Council, which also serves as the city’s Community Development Commission, decided to pursue a hotel project proposed by Oceanside Hotel Partners--a joint venture between Russell Grosse Development of Carlsbad and Calmark Commercial Development of Los Angeles.

The developers’ initial plans call for the construction of a 300-room resort hotel, convention center and condominium project on 6 acres of vacant land near the municipal harbor. They were unsure of the total cost of the project, which city officials hope will bolster a fragile tourism industry.

Last summer, a similar effort collapsed when City Equities-Oceanside Ltd., a development firm, was unable to get financing and had to abandon its plans for a $25-million hotel complex.

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The setback underlined Oceanside’s continuing difficulty in shaking its image as a honky-tonk town catering to Marines from nearby Camp Pendleton.

Hotel industry analysts have speculated that a recent boom in hotel building in Southern California has saturated the market. Also, they say, lenders are hesitant to finance trailblazing projects in cities with image problems such as Oceanside.

But, in Oceanside, officials see signs of rejuvenation in the recent successful restoration of the city’s municipal pier and booming construction of beachfront condominiums. Redevelopment officials have feverishly pursued a resort hotel as the missing piece needed to restore Oceanside to its glory days as a summer haven in the 1940s.

Image Problems in City’s Past

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Jim Betz, vice president and general counsel with the Carlsbad development firm, agrees.

“I think the city’s image problems are definitely in Oceanside’s past,” Betz said. “But it is still a trailblazing project, and that’s why I think the ability to get financing has been the key issue.

“I believe that was the overriding reason the city chose us to proceed with the project, because we have a track record in getting financing,” he said.

Russell Grosse Development has been involved in many commercial projects, including three shopping centers in Oceanside, Betz said.

Calmark Commercial Development also has experience building in San Diego County. The Los Angeles-based firm was a major developer behind the University Town Centre Mall in La Jolla and is the managing general partner for the 210-room Ritz-Carlton hotel project under construction in La Jolla.

Although the developers are far from choosing an operator, Betz said several hoteliers have expressed interest in the Oceanside project.

“We’ve talked with several operators and, in addition, Calmark already has existing relationships with some hotel operators,” Betz said.

According to Betz, Calmark has previously undertaken ventures with Hyatt and Ritz-Carlton hotels. Calmark also owns the Beverly Heritage hotel chain, which may also be considered for the project, Betz said.

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