Hyatt to Build Beach Resort in Orange County : Development: The 450-room Hyatt will be part of Newport Coast, an Irvine Co. residential and commercial project.
The Irvine Co. said Thursday that the Hyatt Corp. will build a 450-room hotel on a stretch of hilly coastline between Newport Beach and Laguna Beach where the development company is also building 2,600 houses and two golf courses.
The Hyatt would be built on part of the 9,500-acre parcel that the Irvine Co. is developing as Newport Coast. The Marriott Corp. has already entered an agreement to build a 1,100-room hotel there that will be one of the largest on the California coast.
The hotel companies will own and operate the hotels, paying the Irvine Co. a percentage of their revenues for use of the land. The hotel companies both declined to disclose the terms of their leases. Construction on both is scheduled to begin next year and to be completed in 1993.
The deal is the result of lengthy negotiations, disclosed publicly in October, between Hyatt and the Irvine Co. The Hyatt will be a more upscale hotel than the Marriott, which will cater to big business meetings.
The Irvine Co. has government approval to build 600 more hotel rooms on the parcel, the largest undeveloped piece of coastline left in Orange County.
The company is now studying whether to add a third hotel, perhaps an exclusive small luxury inn such as the plush Bel Air Hotel in Los Angeles, said Richard G. Sim, an Irvine Co. executive in charge of commercial real estate development. The developer is not now negotiating with a third hotel company, however, Sim said.
Until now, the land--some of the choicest beachfront real estate in Southern California--has been little developed.
Opposition from environmentalists forced the Irvine Co. to scale back its original plans.
The new hotels are part of a recent resort boom along the Orange County coast. The boom has been propelled by several factors: the proximity of the populous Los Angeles metropolitan area; Hawaii’s saturation with resorts; the fact that suitable oceanfront sites in the county have been available; and the fact that in a county overbuilt with hotels, the resort hotels generally have higher occupancy rates than those inland.
Some analysts, though, fear the resort hotel market in Orange County may eventually become saturated itself. There are two seaside resort hotels in Dana Point, and more are either in the building or planning stages in Huntington Beach.
Over the years, the Irvine Co. has talked to most of the county’s big developers about building a hotel for them.
The Hyatt chain is a privately held company run by the billionaire Pritzker family of Chicago. The company would not disclose how much it plans to spend to build the hotel and said no sketch of it is available yet.
Hyatt, which has three hotels in Orange County, is known for its resorts and elegant hotels in big-city downtowns and affluent suburbs.
Marriott, which is based in Maryland, said when it announced the deal in June that its hotel would cost about $220 million. That deal also took a long time to negotiate, according to people familiar with the Irvine Co., because the Irvine Co. is demanding top rental dollars for Newport Coast.
