GARDEN GROVE : City to Hold Hotel Talks With Tunney

Officials signed a 90-day exclusive negotiating agreement Tuesday with a real estate and development company headed by former California Sen. John Tunney to produce a marketing and financial analysis for a hotel and other businesses that may be built on city-owned land near Garden Grove Hospital.

The City Council, sitting as the Agency for Community Development, signed a similar exclusive agreement in 1990 with National Capital Development to plan a hotel for the 5.5-acre site on Garden Grove Boulevard, between Haster and Sungrove streets.

But the ailing economy and an oversupply of Central County hotel rooms thwarted the company’s bid for financing, causing plans to fall through, officials said.

However, Cloverleaf Group Inc. of Los Angeles, of which Tunney is the chairman and an owner, believes that financing may be more available for a mix of hotel, retail and office buildings plus residences, rather than just a hotel alone, a city official said.

Officials also hope that multiple uses would help support each other and could benefit from the existing hospital complex, Community Development Director Gregory C. Devereaux said in a report to agency members.

Agency member Mark Leyes said the exclusive agreement with Cloverleaf means that officials will not consider any competing proposals until Cloverleaf completes its study.

“I’m excited,” Leyes said. “Cloverleaf has real good credentials. They have two successful hotel projects in Hawthorne and Santa Monica.”

The Cloverleaf Group, established in 1977, has acquired and developed 7,000 residential units and many commercial, office and industrial properties in 14 states, according to the company’s statement of qualifications.

The company is completing a mixed-use project that includes a hotel in Hawthorne. It also owns and operates the 129-room Santa Monica Gateway Hotel and is building a 100-room Westwood Pacific Hotel in West Los Angeles.