Marriott Wins Bid for Newport Coast Site
A hillside resort site looking out to Santa Catalina Island, abandoned by Walt Disney Co. in a retreat from the time-share business, will instead be developed by Marriott International Inc., sources close to the deal said Monday.
The 70-acre parcel above the Pelican Hill Golf Course is one of two ocean-view sites in the Irvine Co.’s Newport Coast development zoned for guest facilities such as hotels, time-shares or a combination of them.
Marriott, a Washington, D.C.-based hotelier and a leading developer of time-share resorts, beat out Chicago-based Hyatt International Corp. in the auction for the property.
Plans for the site weren’t available. Sources said Marriott is still researching technical issues and working out the details. The deal in its final form isn’t expected to be announced until early next year.
The high-end hotel and resort market has strengthened recently, and access to the site between Newport Beach and Laguna Beach has been improved markedly by the San Joaquin Hills toll road, said CB Commercial hotel specialist Donald Wise.
“The views along the coast there are unparalleled, and Pelican Hill is potentially a world-class golf course,” Wise said. “The timing from the Marriott perspective is pretty darn impeccable.”
Disney paid a reported $25 million for 35 acres of the site in 1993, bought 10 additional acres later, and has an option for the remaining 25 acres.
The price Marriott paid couldn’t be determined, but the land price will be only a minor portion of the final cost.
In announcing its plans with much fanfare in 1994, Disney said it would spend $250 million to develop 650 units using Newport Coast’s Mediterranean hill village theme.
The project, part of planned time-shares near Disney theme parks worldwide, was to have included man-made canals with gondolas, a “Roman aqueduct” spilling into a swimming pool and, of course, frequent shuttles to Disneyland.
But with time-share competition intensifying from Marriott, Hyatt and other big lodging companies, Disney decided in February to concentrate on its four existing time-share facilities in Florida and Hilton Head, S.C.
In addition to auctioning the Newport Coast site, Disney sold a hotel it had acquired near St. Tropez on the French Riviera, which also was to have been tied into the time-share network, said Mariska Elia, a spokeswoman for Disney’s Vacation Clubs.
“Our priorities changed,” Elia said. She said that time-share credits from all the major lodging chains are readily swapped and sold, so tourists who want to book such a unit during a trip to California already can do so easily.
Years ago, Marriott had planned a hotel at the Newport Coast site, but backed off early this decade after a downturn in real estate and the international hotel business.
Geary Campbell, a spokeswoman for Marriott Vacation Club International, said the company has 32 time-share resorts and three more under construction. She wouldn’t discuss the Disney site, but said Marriott had studied several coastal sites in Southern California.
A Marriott complex near Palm Springs, Desert Springs Villa, is regarded as a model combination of hotel and time-share units, said Michael L. Meyer, an E&Y;/Kenneth Leventhal Real Estate Group consultant in Newport Beach.
Newport Beach Mayor Jan Debay said the city would like to annex the area where the resort is planned, adding that she was “tremendously pleased” to learn of Marriott’s interest.
“I welcome them to the family,” Debay said. “All of us kids love Disney. They have a really special touch in everything they do. But I trust Marriott.”
