Oct. 8, 2003 - Businessman Ray Carpenter spoke with pride about a posh 250-room waterfront hotel that he and a partner plan to build behind the San Diego Convention Center. 

Called the Conrad Spinnaker, the $65 million hotel is designed in the shape of a sail. 

"As you can see, this is not a box," Carpenter told the Port Commission yesterday. "This is not a stack 'em, rack 'em hotel. This will have a major impact for years to come." 

Commissioners agreed, voting 7-0 for a 24-month development agreement and other actions that will allow construction of the hotel, where room rates will average $255 a night. 

In addition to the hotel, Carpenter and his partner, businessman Art Engel, must build a plaza, a 1-acre park, a transportation center for water taxis and a pedestrian bridge to the convention center as part of requirements imposed by the Port District. The port is landlord to more than 500 businesses on state tidelands along San Diego Bay. 

Port commissioners unanimously approved a repayment plan that would pay the developers, known as Fifth Avenue Landing, $8 million at 8 percent interest, over the hotel's first 10 years of operation. 

Perry Dealy, executive vice president of Manchester Resorts, told commissioners the reimbursement is unfair to other hotel developers who are port tenants. Developer Douglas Manchester developed the Marriott and Manchester Grand Hyatt on port tidelands. 

"We've shown we can build a project on the waterfront without a subsidy," Dealy said. "I think it's unfair to give them a rent concession." 

But port officials said the cost to build the plaza, the bridge and other public amenities required by the port exceeded $8 million -- meaning Fifth Avenue Landing would not walk away with a windfall. 

Commissioner Sylvia Rios said the 8 percent interest on the $8 million repayment was too high. She said 5 percent would be more acceptable. 

But Port President Bruce Hollingsworth said the figures had been negotiated and were fair when considered as part of the entire deal. 

As part of the project, developers want to build a berthing facility for up to 30 yachts. 

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(c) 2003, The San Diego Union-Tribune. Distributed by Knight Ridder/Tribune Business News.