By Jonathan Smith/Garden Grove Journal
The city council approved the go ahead for an upscale resort hotel project that will be located on Harbor Boulevard at Twintree Lane
The council also approved a resolution to support a financial initiative that will help continue the Great Wolf water park hotel development.
The proposed hotel project on Harbor will feature an upscale hotel that would include roughly 300-469 rooms. Two smaller, separate hotels will also be included on the property, along with various entertainment, retail and restaurant locations.
The city staff reported that about $3.9 to $4.9 million gross will be generated from the project for the city.
Also, upwards to 1,025 jobs will be created, the report said. However, according to the staff report, the value of the project will see a deficit of $31.5 million from the start.
City Manager Matt Fertal said the deficit is related to how much the land would be worth due to the upscale hotel, not about the profits from the project.
“The cost to build such a hotel versus the cost of the room income that the owner will get will end with a negative land value,” Fertal said, during the meeting. “In this case, it demonstrates that project does need financial assistance to make it profitable for the developer.”
“From the city’s perspective or the previous redevelopment agency’s perspective, assisting in the project financially still produces a net gain to the city,” he added.
During the public hearing, Errol Giuliano, the chairman of the Garden Grove Chamber of Commerce board of directors, expressed his approval of the project.
“This proposed project is an example of how private/public partnerships can work and show what is the best interest of our business community and the residents of Garden Grove,” he said.
However, not all in attendance were in favor of the project.
Garden Grove resident Tony Flores said he was concerned of where the funds were
“I’m just asking how this is going to be financed,” Flores said. “I don’t think we’ve (Garden Grove residents) seen the benefits.”
Mayor Bruce Broadwater said during the meeting that previous hotels constructed in the city have generated about $12 million the last few years.
“To add that up, it doesn’t take long to add to the point where its way more beyond anything we put into it,” he said. “And it will keep generating, well you can’t say forever, but certainly for long, long time.”
The project will take about three years to complete.
The Great Wolf water park hotel project began more than a year and half ago. However, the project was put on hold due to uncertainty after the state’s cancellation of the redevelopment program.
Under the original agreement, the city promised to pay the developer $42 million when the hotel opened. However, the developer said the funds needed to be available sooner to get the project up and running.
Fertal said both sides have been working to find alternatives to help offset the deficit cost.
“All parties have been working diligently to develop a financing mechanism that will result in $42 million available today instead at the opening,” Fertal said.
The proposal includes a tax allocation bond that will help opened up immediate funds for the project.
Trae Rigby, project director for the developer McWhinney, said groundbreaking can began as early as fall because of the city’s resolution approval.