Environmental Real Estate

The coastal permit for the planned 1,200-room Hilton Hotel on the Campbell Shipyard site next to the Convention Center was unanimously approved by the San Diego Unified Port District commissioners.

Financing the projected $334 million project may be the only big hurdle left.

The hotel, with a 32-story tower, will include 5,360 square feet of retail; 14,447 square feet of restaurant space inside; and an 11,695-square-foot freestanding restaurant outside; 106,751 square feet of meeting room and ballroom space; a 23,082-square-foot health club and swimming pool; a new 4.3-acre park with a plaza and fountains; and a new water taxi dock.

The hotel sits on a 10.22-acre site and is being designed in a style intended as a natural extension of the Convention Center. The tower will be a modular design, with its guestrooms grouped within glass and aluminum panels. The hotel podium base will be terraced back to the ballroom levels to provide maximum views, and open terrace areas will overlook the water.

The hotel will be connected to a newly constructed $24 million 2,000-space parking garage. The hotel will be allowed to use 800 of those spaces.

Nearly a year ago, CNL Hospitality Properties Inc. of Orlando, Fla. announced it would acquire the Hilton when it is built. CNL paid $385 million for the Hotel del Coronado last year.

The developing partnership is a joint effort of Hilton, Portman Holdings of Atlanta and Hensel Phelps Construction of Greeley, Colo. The architects are John Portman & Associates of Atlanta and Joseph Wong & Associates of San Diego.

Hotel consultant Robert Rauch, who said it was about time the coastal development permit was given the green light, said it is always difficult to finance a 1,000- to 1,200-room convention hotel without public subsidy.

"The lenders ask who is responsible in the event of a default," Rauch said. "If you have a project that costs $250,000 a room, that's just a huge undertaking."

Rauch said Hilton might help itself by putting some money into the project.

"The debt market is only loaning 60 percent of project costs," said Roger Zampell, Portman Holdings senior vice president. "Then the project has to make economic sense."

Zampell said his firm and Hilton are fortunate that this project will be developed here.

"We couldn't do this deal anywhere but here," Zampell said. He expects the project to be conventionally financed.

For a time it appeared that environmental problems could doom the project, but after millions of dollars spent by the port to clean up the land portion, and a commitment to cap the contaminated water portion of the site, the plan was allowed to move forward.

Barring an appeal to the California Coastal Commission, or any last ditch litigation, the project could conceivably get under way sometime next year. The hotel is expected to take about two years to complete.

The project can come none to soon for the Convention Center Corp.

April Boling, Convention Center Corp. vice chair, said more than 55 conventions and $1 billion has been lost to the local economy since 1999 because the hotel wasn't built.

Port OKs Hilton bay front hotel plan

2004-11-30

09:25:00 Port OKs Hilton bay front hotel plan

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