SAN MARCOS: City considering sale of Grand Avenue land

Corona developer wants to build one or two hotels on site

By ANDREA MOSS - Staff Writer | Tuesday, November 11, 2008 7:08 PM PST ∞

SAN MARCOS ---- The City Council will be asked Wednesday to approve the sale of city-owned land on Grand Avenue to a developer with plans to build one or two hotels there.

Charlie Schaffer, director of development services for the city, said Monday that city officials are excited about the proposed project because it could bring $700,000 in additional hotel tax money to San Marcos each year and provide visitors with more accommodation options.

The project also would help the city achieve its long-term goal of revitalizing an older industrial area just south of Highway 78, he said.

"Most cities have the same policy ---- when you have older areas that front along the freeway, you want to redevelop and fix them up," said Schaffer. "It'll help make the Highway 78 corridor look better so that when people drive by, they'll have a better view of what's going on in San Marcos."

The proposed deal is a "consent item" on the agenda for a council meeting that starts at 6 p.m. Wednesday at San Marcos City Hall, 1 Civic Center Drive. The council votes on consent items en masse and does not discuss them individually unless a member of the council or the public requests that.

If the deal is approved, Corona-based developer Tahir Salim would have up to a year to buy up to 5 acres along Grand Avenue, between San Marcos Boulevard and Las Posas Road. He would pay $35 per square foot for the property.

If he buys 4.5 acres, for instance, the developer would pay about $6.86 million, according to figures in a city staff report.

Real estate broker Ryan Litrich, who is representing Salim in the deal, said Tuesday that his client declined comment on the proposed deal before it went to the council.

"He thinks it's a little premature right now," Litrich said.

The section of Grand Avenue in question is a frontage road to, and clearly visible from, Highway 78.

Schaffer said San Marcos bought the properties several years ago so it could improve a drainage channel that runs under the highway and along the side of an antique mall on Grand Avenue.

As it is now, the channel can not handle all the water that flows into it during heavy rainstorms, he said.

"We acquired the antique village because the right of way to construct that project would have affected it," Schaffer said. "We also talked to (adjacent) property owners and made offers. We had willing sellers who, for whatever reason, were willing to work with us."

The drainage channel project is being designed now, he added.

Meanwhile, Schaffer said, Litrich contacted city officials and told them Salim was eyeing the same section of Grand Avenue for his hotel project.

After looking at the site, the two sides concluded the hotels could be built on 4 or 5 acres of the site without affecting the drainage channel project, Schaffer said.

San Marcos typically retains ownership of its properties and leases them to stores, restaurants and other tenants that generate rental income and sales tax income for the city. The strategy helps balance the lack of an auto park, regional shopping mall or other major sales tax generator within the city's borders.

Schaffer said the city makes exceptions for hotels because San Marcos collects a 10 percent tax added to the per-night room rates that hotel guests pay.

"That's another long-term revenue stream," he said.

San Marcos already has an 85-room Ramada Limited Suites and a 69-room Hampton Inn along Highway 78. And a developer recently broke ground on a 112-room Marriott Residence Inn near the Las Posas Road-Highway 78 interchange.

Schaffer said Salim envisions at least 100 rooms for his project. The developer believes the presence of Cal State San Marcos and recent development in the city make this a good place for another hotel, Schaffer said.

The one-year escrow period will give Salim time to analyze the local hotel market and talk with various hotel chains before deciding other details, including brand-name or names, said Schaffer.

The property would need to be rezoned from industrial to commercial before the hotel could be built. That change would require the council to amend a growth plan created for San Marcos in the 1970s.

Proposition O, rejected by voters earlier this month, would have required a public election for such amendments. Schaffer said Salim seemed to be unconcerned about that possibility even before the election.

Reached by phone at the antique mall, a woman who identified herself as its owner said the business showcases the wares of 65 different dealers and 3,000 consignors. She said the mall will remain at its current location for at least another year, but she declined other comment.

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