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Noteworthy News

Two hotels will open in city by 2010. Upscale W hotels promise to draw hip crowd to area.

By Michael Alexander, HB Independent, January 16, 2008

A major world luxury hotel brand is coming to Huntington Beach, Starwood Hotels & Resorts Worldwide announced this week.

The upscale W Hotels will open a resort in the upcoming waterfront Pacific City development owned by developer Makar Properties. The nine-story W Huntington Beach, which is scheduled to open in 2010, would feature 250 guest rooms and about 94 private condominiums, according to the hotel company.

The hotel`s cachet promises to bring a young, affluent clientele to Huntington Beach, said Alan Reay, president of Irvine-based Atlas Hospitality Group, which tracks the California hotel market. W hotels in California tend to be in hip neighborhoods like Hollywood or San Diego`s Gaslamp district, he said.

"I think that`s a great addition to the city," Reay said. "It`s something Huntington Beach does not have right now."

W Huntington Beach will be the fifth W in California and the 22nd overall.

"W continues to extend beyond the boundaries of everyday travel, offering a magical mix of sexy destinations and sublime design," said Ross Klein, president of Starwood`s Luxury Brands Group, in a statement. "From Huntington Beach to Hong Kong, Minneapolis to Milan, Hoboken to Hollywood, W Hotels is going global as the influential and innovative lifestyle authority."

W is not the only hip boutique hotel opening nearby in the next few years.

The 157-room Shorebreak Hotel is scheduled to open in the Strand project on the other side of downtown.

Joie de Vivre Hospitality of San Francisco, a big name in boutique hotels, will run that hotel.

Pacific City and its hotel are being built on Pacific Coast Highway between the Hyatt Regency Huntington Beach Resort and Spa, and the Hilton Waterfront Beach Resort, but Reay doesn`t think competition will hurt any of the players. For one thing, the boutiques cater to a different, more young and affluent, market.

Also, "when you have hotels like that opening up it creates a buzz," he said. "It really creates new business for the entire area."

Sites worth about $60M

But value of school property set much lower if city uses state`s Naylor Act. Appraisal takes trustees closer to decision.

By Michael Alexander, HB Independent, January 16, 2008

An appraiser told the Huntington Beach City School District board this week that its four closed school sites were worth about $60 million, but would have been worth more before a sub-prime mortgage meltdown sent the real estate market into decline.

"My conclusion is that it`s significantly lower than it would have been 12, 18, 24 months ago," said appraiser Rick Donahue of Integra Realty Resources. "Very clearly, land values have declined in the last six to 24 months. Will they come up again in the future? I believe so."

But an appraisal done in 2006 by California Financial Services had values much lower, board President Celia Jaffe said. She called the new numbers encouraging.

Donahue presented his findings on the value of the closed Gisler, Burke, LeBard and Kettler Elementary school sites to trustees Tuesday, which they had called a major step toward making a decision on the property. In addition to the basic values, he calculated their worth if the city used its rights under the state Naylor Act to buy 30% of any land up for sale at a quarter the price. That move would cut millions out of any site`s value.

His report also valued the market monthly rent of all four sites as $1.65 per square foot, based on size, the property would pull in $600,000 to about $850,000 per year using that figure, but warned that since few for-profit companies rent out closed schools, real rents would be significantly less and hard to predict.

"The likely users are nonprofit users such as churches," Donahue said. "Those are typically not measured as we would measure market rent. It comes down to negotiating what they can afford to pay."

The report moves the issues forward so trustees can begin discussing a course of action at a 5:30 p.m. study session Jan. 22, district Supt. Roberta DeLuca said.

"All of that`s going to be coming together in the next meeting," she said. "The question`s going to be, what are the next steps?"

Residents also had a chance to ask about those issues at two community meetings this week. The board held question-and-answer sessions at Dwyer and Sowers Middle Schools, where residents asked pointed questions on their rationale for possibly selling land. Board members responded that they were trying to be fiscally responsible for the district.

"Twenty years ago our parents were talking about selling our school sites," resident Sharon Augustine said Monday at the Sowers meeting. "What would have happened if the school district sold then? Would we even be having this meeting today? Where would those funds have gone, and what would you be doing today given that most of those funds would probably be gone?"

Later in the meeting, board member Cathy McGough said selling the land was one of the only ways she could see to pay for important work on schools that remain open, since current rents from two Christian private schools were being used to pay for loans for previous projects.

"We need a tremendous amount of money to be able to fix up a whole bunch of capital projects that we don`t have a source of income for," she said. "We have to fix up the sites for the existing students now."