Oceanside, stay focused on hotel

By: North County Times Opinion staff - | Tuesday, December 26, 2006 11:22 PM PST ∞

Our view: Council complicating effort to realize downtown resort dream by mulling zoning changes

Oceanside has plenty of reasons to be wary of bringing its highly anticipated downtown hotel project before the California Coastal Commission. But it shouldn't let that sensible apprehension lead it down another route perhaps even more fraught with peril.

At issue is the 336-room Westin resort that San Diego-based developer S.D. Malkin has been tapped to build at the foot of the Oceanside Municipal Pier. Complicating matters is S.D. Malkin's intention to make 48 of the rooms it builds "fractional time shares" -- or rooms sold in weeklong increments.

Some in Oceanside worry that this aspect of an otherwise widely hailed, if increasingly expensive, proposal will doom it to founder upon the reefs of the Coastal Commission, a fate familiar to those who watched Doug Manchester's proposal stall and then sink there a few years back. The city shelled out $2.2 million to Manchester in 2003 to make him go away, and has agreed to subsidize Malkin's $187 million project to the tune of $27 million. So the Oceanside City Council's caution is understandable.

The council directed city staff on Dec. 13 to study a way to potentially shield S.D. Malkin from being caught up in the Coastal Commission by amending the city's Local Coastal Plan to authorize three new types of condo/hotel rooms near the ocean.

In Malkin's case, investors could be offered rooms to stay in up to 90 days of each year but no more than 30 in a row, and empty rooms would be available for renting to hotel guests. Developers like these arrangements because, among other benefits, they provide a more flexible portfolio of rooms to sell. Such condo hotel projects are popping up in most expensive real-estate markets.

Even the state's stingy Coastal Commission has approved about a dozen such deals, including the KSL Encinitas Resort Co. project at the northern tip of Leucadia. That project, like Oceanside's decades in the making, was approved by Coastal Commissioners in March over the objections of environmentalists and Coastal Commission staff, who fretted about eroding public access to the coast by allowing some rooms once planned as temporary lodging to be sold as time shares.

Never mind that in either case, these rooms would be too expensive for the vast majority of any "public." And the time-share arrangement would keep the residents rotating, if less frequently than a classic hotel room.

But the dynamic in the KSL case demonstrates the mixed signals Oceanside's council is getting regarding which course they should take. The Coastal Commission staff and commissioners often diverge on knotty issues such as this.

Rather than simply approve the Malkin proposal, an ad hoc committee including Councilman Rocky Chavez and then-Councilwoman Shari Mackin recommended the city go one step further and make room for Malkin's time-shares in the city's zoning plan before the hotel goes before the Coastal Commission. That's the course preferred by staff at the city and Coastal Commission; after all, that's why cities are supposed to draft Local Coastal Plans, to take these sorts of zoning matters into their own hands and not bring them piecemeal before the statewide commission.

But what about Oceanside politics suggests that local waters will be any less choppy than those surrounding the Coastal Commission? By exploring the amendments to the Local Coastal Plan, the city is unnecessarily complicating the hotel proposal by opening up other businesses and blocks to fresh controversy. Who knows what other projects will become controversial should the city choose this wider zoning question?

If the city doesn't tackle the larger zoning question, that would punt any project with new wrinkles, such as Malkin's "fractional time shares," to the Coastal Commission. although anything can happen before that body -- especially with Assembly Speaker Fabian Nunez set to select a new commissioner from San Diego County.

But Oceanside's chances are probably better if it lets the Malkin project stand alone than if it attempts to tackle sure-to-be controversial zoning changes in other parts of the city. Oceanside can't afford to smother its latest best hope for a high-end downtown hotel project by surrounding it with the quicksand of other projects. It's too important for the city's future.