City to consider Waterfront expansion funding

Eron Ben-Yehuda

HUNTINGTON BEACH -- Despite charges of a “sweetheart deal,” the City

Council is expected to approve next month the final part of a $16-million

financial package to help the Waterfront Hilton expansion project, a city

official said.

The project’s developer has already begun clearing 15 acres along Pacific

Coast Highway west of Beach Boulevard to make way for a 500-room hotel

with a 100,000-square-foot conference center and a 17,000-square-foot

retail plaza. With an opening expected in the summer of 2001, the Hilton

Grand Coast Resort “will represent the most complete and luxurious

meeting destination on the California coast,” according to the

developer’s glossy brochure.

But if the project is such a winner, the city shouldn’t fork over any

money, said resident Bill Bernard, a commissioner for the Orange County

Housing Authority.

“This is corporate welfare,” he said.

Based on an agreement with the developer, Robert Mayer Corp., the city is

obligated to contribute $16 million to the project, said David Biggs, the

city’s director of economic development.

To cover the cost, city staff will ask the council to authorize a request

Feb. 22 for up to $16 million in low-interest loans, he said. The full

amount probably will not be needed because the city already received a

$2-million federal grant and a $6-million federal loan meant for the

project, he said.

The city qualified for the federal money because the hotel will create

jobs for low- to moderate-income families. Those jobs will include

positions such as bus boys, groundskeepers and maids, officials said.

If the city wants to help these needy families, the money would be better

spent building affordable housing, Bernard said.

“I don’t know where they are going to live,” he said.

Part of the money the city provides will more directly benefit the public

by funding the construction of streets around the project and a

pedestrian bridge, which will cross over Pacific Coast Highway, providing

guests with easy access to the beach, Biggs said.

Other local developers, such as PLC Land Co., which builds in the Holly

Seacliff area, do not enjoy the same financial support from the city.

But the Waterfront expansion deserves special treatment, City Councilman

Dave Sullivan said.

“This is looked upon as a real key piece of our tourism puzzle --

probably our most important one,” he said.

In addition to the Grand Coast, the developer plans to build another

hotel and a residential community on adjacent land.

The loans will be repaid over 20 years, Biggs said. With interest, the

total pay out for the city will be about $26 million. But Biggs predicts

a healthy return on the city’s investment with the Grand Coast expected

to generate $3 million in annual tax revenue, he said.Bernard isn’t so

sure.

“These are all iffy things,” he said.

QUESTION

Do you think the city should seek $16 million in low-interest loans to

help the Waterfront Hilton expansion or wait to see how much is really

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