Quote:
Originally Posted by Derek loves SD
What about the Marriott that's supposed to go up on Fifth?
|
3 years after land was taken, it's being used as parking lot
By Jeanette Steele
UNION-TRIBUNE STAFF WRITER
June 24, 2007
DOWNTOWN SAN DIEGO – Construction costs are skyrocketing, a court fight is dragging along, and three years after a Gaslamp Quarter cigar shop was condemned to make way for a hotel, the site is being used as a parking lot.
EDUARDO CONTRERAS / Union-Tribune
The Gran Havana cigar shop on J Street between Fifth and Sixth avenues was condemned to make way for a hotel, but the site is a parking lot today.
Now the developer of a proposed Marriott Renaissance is asking San Diego's downtown redevelopment agency for another extension.
Under the current agreement, excavation of the site should have started in January and the hotel should be completed by September 2008. The company now proposes to bring in the backhoes in May and finish the hotel in July 2010.
The Centre City Development Corp. will consider the request at a meeting Wednesday. The downtown redevelopment agency, which took the Gran Havana cigar shop in a controversial decision in 2004, has been unhappy about the delay.
Shop owner Ahmad Mesdaq's appeal of the eminent domain action still is pending in court. So is the agency's appeal of a judge and jury's $9.1 million award to Mesdaq. Oral arguments in both cases start July 17.
The developer blames the delay on that litigation and the chilling effect of Proposition 90, the failed 2006 ballot measure that might have limited the city's condemnation powers.
Now the developer, GRH LLC, wants to lease the whole project to an Anaheim-based company, Hansji Hotels, that is building a hotel across the street. GRH wants help with spiraling project costs, which went from $70 million in April 2004 to $108 million today.
“We are all committed to proceeding with the project as expeditiously as possible,” said Cynthia Eldred, attorney for GRH, which is managed by Ramin Samimi of San Diego.
Samimi's firm wants a nearly two-year extension on the construction timeline dictated by the downtown agency. It would be the second extension, agency officials said.
Mesdaq calls these requests unfair.
“It's just a very sad fact when a government entity takes property for a private developer so he can flip it and make a big sum of money,” he said.
Mesdaq, 36, said he tried reopening his cigar shop in September 2006 at another Gaslamp Quarter address, but business never came around and he closed in January.
Mesdaq, a Scripps Ranch resident, said he plans to use his settlement money to open another business in the Gaslamp.
Eldred disputed that this is a case of “flipping” a project, as GRH would maintain ownership of the land while Hansji Hotels would build and operate the hotel.
She also said the proposed lease doesn't allow her client to cash in. Under the deal with Hansji, she said, GRH takes a hit on expected earnings both now and in the future.
The company already has spent $23 million on the project.
The site is on J Street between Fifth and Sixth avenues. Mesdaq owned 5,000 square feet of the 40,000-square-foot parcel that is slated to become a four-star Marriott Renaissance hotel with 334 rooms.
GRH originally wanted to build the hotel on a different downtown site that it owned, but that land was condemned for what became Petco Park.
Mesdaq bought his property in 2000 and, combined with renovations he had made, sunk about $2.5 million into the former warehouse, turning the site into a showcase.
The city long has maintained that Mesdaq knew the hotel proposal was coming when he purchased the land. He says he didn't learn of it until he was in escrow.
Mesdaq refused offers to sell and went to court to stop the condemnation. He argued that taking his land and handing it to a private party did not amount to a “public use.”
In recent years, governments have used eminent domain powers for “economic development,” arguing that the tax revenue and jobs that private developers bring ultimately benefit the public. City redevelopment officials argued that the hotel would provide much-needed property and hotel-room tax revenue and hotel rooms to serve the Convention Center.
The cigar shop was demolished. The land is being used now as a pay parking lot, with the revenue going to the developer and the downtown agency.