Poway, developer close escrow on hotel site

By: ANDREA MOSS - Staff Writer
Deal's completion sets stage for Hampton Inn's construction | Monday, October 1, 2007 11:36 PM PDT ∞

POWAY -- The city and a developer have completed a deal that put a vacant, 3-acre lot in the South Poway Business Park in the developer's hands, thereby setting the stage for the construction of a $16.7 million Hampton Inn & Suites on the property.

Ashley Jones, a management analyst with the city's redevelopment agency, said Monday that Valencia-based Ocean Park Hotels gave the city a 20-year promissory note last week for nearly $1.59 million. The amount represents the fair-market value of the land, on the northeast corner of Scripps Poway Parkway and Stowe Drive, said Jones.

The exchange is the trigger for the long-awaited hotel's construction, under a development agreement the city and Ocean Park signed last year.

Ocean Park President James Flagg said Monday that the company plans to break ground on the hotel within two to three weeks.

"The contracts have all been signed, and the contractor is already starting to mobilize," said Flagg, from his Valencia office. "Just watch us grow, watch us come out of the ground and I'd say after the first of the year, we'll be out in the community trying to make contacts and booking business."

The hotel should be ready to open late next fall, he added.

Once completed, the project will fulfill a long-held vision for the business park. A high-quality hotel was penciled in when the 700-acre park was mapped out in the late 1980s.

City officials always said the project would be carried out only after the park was 70 percent finished, to ensure there was enough demand to keep the hotel in business. That point was approaching in 2001, when the city paid $1.84 million for a 4-acre parcel and erected a large sign that proclaims the site as the future hotel's home.

The property was later divided into two parcels, with 2.96 acres set aside for the hotel and 1.23 acres earmarked for a restaurant that would serve the business' guests and other customers.

Carlsbad-based Waterford Development Co. agreed to build the hotel in 2002. The firm put together plans for a three-story Hampton Inn & Suites with 108 guest rooms, 2,400 square feet of meeting space, a catering kitchen, a swimming pool and other amenities.

The city's development deal with Waterford collapsed after the company was unable to get financing for the project.

A lengthy search for a replacement developer led the city to Ocean Park Hotels in 2005. The company, which built, owns and operates Best Western, Hampton Inn, Hilton and Holiday Inn hotels in California and Arizona, signed its own development agreement with the city last year.

The city agreed to make Ocean Park a market-interest-rate loan to cover the land purchase, as part of the deal, and Jones said the promissory loan reflects that commitment. The deal also calls for the company to invest $2.5 million of its own money into the project, with the rest of the money coming from a bank loan obtained by Ocean Park.

The development deal also calls for Poway to add curbs, gutters and other improvements to the restaurant property, which will share an entrance with the hotel. The city will start that work early next year and, upon its completion, will seek bids from companies interested in building and operating the restaurant, Jones said.

Poway has two hotels -- the Ramada Limited and the Best Western Country Inn -- on Poway Road but none in the business park, which is a couple of miles up a hill from the main road.

Finding a developer willing to build a hotel that caters to business people and fill a meeting-space gap in the area was a key criteria for city officials.

Flagg said the square footage allocated for meeting space was bumped up to 3,000 in the final design for the hotel, whose rooms will include 33 suites. He also said he believes Poway is a good place for such a project.

"One, it's underserved right now for the size of the city," he said. "And we feel there's room for higher-quality accommodations because of the business park demands there and also demand within the community."

-- Contact staff writer Andrea Moss at (760) 739-6654 or amoss@nctimes.com.