3 Hotel Projects in the Works at Foothill Ranch

FOOTHILL RANCH — Signaling what may be a new wave of hotel development, two companies have purchased land for three new hotels with a total of more than 250 rooms in and around this planned community in South County.

Denver-based Stonebridge Companies, which operates 16 hotels in the Western U.S., has purchased four acres fronting the Foothill Transportation Corridor near Lake Forest Drive for $1.84 million. It plans to break ground on an 84-room Hampton Inn in July and another mid-scale hotel of 78 rooms, perhaps a Marriott Courtyard, later, said Mark Lionberger, director of development for Stonebridge.

Extended Stay America of Fort Lauderdale, Fla., has begun building a 90-room Extended Stay hotel on Lake Forest Road, according to Dougall Agan, director of marketing for Foothill Ranch Co. Extended Stay purchased the land last month for $976,599.

“There’s quite a bit of interest in [hotel] development in Orange County,” said Bruce Baltin, senior vice president with Los Angeles-based PKF Consulting. “The economy is recovering and there has been no new development in a long time.”

Hotel construction came to a halt throughout the county in the early 1990s, as the economy faltered and certain areas became saturated. In 1994, occupancy plunged to around 45% in some areas.

But demand for hotel rooms has been growing, particularly in South County. In March, for example, hotel occupancy in southern Orange County shot up to 79% from 69% a year ago, according to PKF Consulting. Average room rates also have edged up past $100.

As hotel occupancy moves up, hotel developers are starting to get interested again, analysts say.

Hotel operators are targeting areas such as Foothill Ranch and the rapidly growing Irvine Spectrum commercial center, which attract business travelers. A hotel also is under construction in the Spectrum.

Although Foothill Ranch is isolated from major freeways, consultants point out that it is attracting a number of high-profile companies, including sports sunglass maker Oakley Inc. and apparel manufacturer Wet Seal Inc.

Officials of Stonebridge say they were lured by Foothill Ranch’s growing business and residential area.

The 3,000-acre community, which began development in 1990, has sold all of its residential land for 4,000 homes, and all but 90 acres of its 600-acre business park are locked up for development, Agan said. The community now features a large retail center as well.

Stonebridge’s Hampton Inn will be next to the site of a major office complex being planned by developer Opus Southwest Corp. of Phoenix. The office development was a critical factor in Stonebridge’s decision to purchase the site, Lionberger said. Construction will start on the first office building in the complex about the same time that workers break ground on the Hampton Inn.

Agan said the hotels will help Opus attract new companies to these buildings and give Foothill Ranch more credibility as a business destination.