San Diego Port To Hear Hotel Proposals, Leaning Towards Hilton

SAN DIEGO— The staff of the San Diego Port Commission is urging that a team headed by Hilton Hotels be chosen to develop the 1,200-room, approximately $400 million hotel on the former Campbell Shipyard property on the bay here. The Port Commission is scheduled to vote on the matter this week. The project already received the blessing of the California Coastal Commission earlier this spring. In December, the commissioners heard four teams make their presentations. These included Tishman Urban Development with THR Management and Starwood Hotels (which operate a Westin property); M.L. Hotels, a Marriott entity in conjunction with Landmark Organization LP; the Hilton team with Hilton, Phelps Program Management LLC and Waterford Development and Lankford & Associates, both of San Diego; and Maritime Venture Partners with Mesirow Stein Development Services and Clark Construction Group as principals. Each team was required to come up with the equity and structure of conventional financing, the conditions of any options, and the economics of their lease with the Port. The Hilton team, which has the backing of Port staff, would carry 50% debt, 30% major institution funding and 20% developer equity. Hiltons equity might be in the form of a guarantee that effectively increases the senior debt from 50% to possibly 70%. The Hilton team won favored status for a number of reasons. First, the Port staff believes, “a Hilton hotel probably will generate the most additional Convention Center bookings because Hilton does not presently operate a convention hotel in the San Diego downtown area,” the staff wrote in a statement. An additional advantage is that the other proposals work under the assumption of a late 2006 or early 2007 opening date, while Hilton claims it could have the hotel open in early 2006. SOURCE: San Diego Daily Transcript