Message to city on Marinapark still bottled up

Joseph F. O’Hora

I am a 30-plus-year resident of Newport Beach with about 25 years of

management and consulting experience in the hospitality industry. In

another life, I was also president and chief executive of the firm

that owned the Newport Ensign newspaper when it was in its prime

during the development wars of the late 1970s and 1980s.

With this letter, I’d like to offer some community commentary

regarding the proposed Marinapark timeshare hotel project, which will

appear on our November ballot disguised as Measure L.

First, let me go on record as being appalled at the lack of city

staff creativity and political sensitivity to our community’s needs.

What persistently unimaginative, lazy and shortsighted planning! Is

anyone at City Hall listening to our residents’ often-expressed

wishes for more open space and less development? A range of more

community-benefiting options available for this once-in-a-lifetime

site comes readily to mind. Proposals for its commercial development

were the lazy, painless way out and should never have been solicited

in the first place.

Modifying the city’s general plan in the manner proposed by

Measure L means commercial development of the largest remaining

undeveloped harbor-front property left on the Balboa Peninsula. Is

this the best that can be offered to present and future residents of

our city? Is a timeshare hotel, with its ever-changing flow of

transient traffic, that is located one-tenth of a mile from a large

grammar school and two churches -- the latter with extensive

preschool and after-school programs -- a better choice than a park?

How will a Girl Scout meeting facility located on the hotel site

itself sound to the parents of current and potential young Girl

Scouts?

Clearly, many people in positions of civic responsibility don’t

seem to have gotten the message that has been repeatedly delivered to

them by the residents over the last quarter-century. In this case, it

appears that Santayana was right when he wrote, “Those who cannot

remember the past are condemned to repeat it.”

Secondly, the longevity of this proposal is really amazing,

especially in view of the obvious political risks associated with

abrogating the specific intent of the city’s general plan in such an

egregious manner. (I remember helping to organize a presentation to

another City Council more than three years ago on an earlier

incarnation of the same proposal from the same developer.) I wonder

why it keeps turning up like a bad penny?

Even more amazing is the fact that this proposal lives despite the

fact that it is obviously and seriously flawed from an economic

standpoint. Hospitality industry management people with whom I have

reviewed the project concur with my judgment that the concept itself

appears operationally naive in the extreme. A 98-unit hotel

(exclusive of its 12 timeshare units) is, among other things, simply

not large enough to provide an adequate operating return on the

invested capital it will take to develop the site. This is a tough,

competitive, oversaturated hospitality market -- just ask the

operators of any of the area’s hotels. Marinapark isn’t likely to

ever show an operating profit. The more luxurious and “five star” it

is, the greater the chance that it will never show black ink from

operations.

The developer must know this. His carrot isn’t in hotel

operations, which he would subcontract in the usual industry manner.

It’s in timeshare sales. His potential one-time sales revenue from

the timeshare sale of the 12 units included in the proposal can

conservatively be projected in the $20 million-plus range, even

assuming no more than an 80% sales success rate. The city sees none

of this revenue.

Once the initial timeshare revenue potential is exhausted, the

developer is gone. The city now has to deal with a facility that is

inherently not viable as a going concern. Does it authorize

expansion? Allow more (or even all) units to be time-shared? Permit

downgraded service and support to reduce operating costs?

This hit-and-run pattern of timeshare development is a familiar

one in the industry. The lure of additional tax revenue is a siren

song to municipal managers, so the story has been repeated many times

over in Sunbelt communities from Hawaii to Florida. As the saying

goes: “Everybody wants to go to Heaven, but nobody wants to die.”

Only one person seems to prosper from most of these deals, and it

isn’t the operator or the municipality left holding the bag!

Our challenge as residents lies not only in preventing this

giveaway of irreplaceable property by rejecting Measure L. Rather, it

is in having the vision and foresight to then force our politicians

to put this kind of thinking aside once and for all. It’s time for

all of us to move on to encourage and guide the creative

noncommercial exploitation of this rare site in a matter that will

truly benefit our community and the lifestyle of all its residents

for decades to come. If they will only take the time to look, the

City Council will find no shortage of community help and support for

such a move.

* JOSEPH F. O’HORA is a Newport Beach resident.