Oct. 17, 2004 - OCEANSIDE, Calif. -- In Oceanside's long search for someone to build a downtown beach resort, Wednesday was supposed to be an exciting day for the city.

The council was expected to have a spirited hearing to pick two finalists from the four developers vying to build a resort hotel on city property across from the Oceanside Municipal Pier.

Instead, the long-awaited hearing is likely to be anticlimactic. City staffers recently recommended that the council eliminate only one developer instead of two, leaving three finalists to undergo a more rigorous examination over the next two months.

City Economic Development Director Jane McVey said Oceanside has always said it would look at the substance of the proposals, and would not just eliminate candidates because that was what was called for in the plans. She said the three finalists are all top-notch candidates and their proposals deserve to be thoroughly examined.

"We said all along that we wouldn't predispose a number (of finalists)," McVey said.

The city's staff is recommending rejecting of the bid from SDC LLC, of La Quinta, and recognizing three finalists: Faulkner USA Properties of Austin, Texas; Pacifica of San Diego; and SD Malkin of San Diego.

In its report, the staff did not give a reason for its recommendation to eliminate SDC from the proposal.

SDC President William Swank said in an interview this week that he may have been too opinionated a developer for the city. He said years of experience with developing hotels have made him quick tell the city what works and what doesn't in the development process. He said he felt that the city wanted a developer that it could control.

"Of course we're disappointed," Swank said. "There is obviously a great opportunity for the city of Oceanside. ... They have got a good site down there. We wish them the best of luck."

Swank said the city is getting bogged down with the details of the project, and should simply choose the developer it wants to design the project.

He said designing and building hotels is a complicated process that needs to be done by a professional team, not by a committee of employees at City Hall.

Swank said the city is not taking into account the money and risk it takes developers to participate in a process like the one Oceanside is going through.

"They have no regard for how much money it costs (developers)," Swank said of the city. "They have three talented firms (left). They should just pick one and let them get on with their work."

McVey said the city is taking a methodical approach to finding a new developer.

"It's just one more step," she said of the Wednesday meeting. "It's one more winnowing (of the candidates)."

If the council approves the three finalists, the city will mail detailed questions to each of the finalists the next day, said Maurice Robinson, a city consultant on the project.

"The questions we keep asking continue to get more and more specific," McVey said.

From there, McVey said, the two developers will have 45 days to prepare and submit their "best and final offer" to the city. If everything goes as planned, McVey said the final offers from the three finalists will be back to the city shortly before Christmas.

After the developers return their proposals to the city, McVey said, "that's when the real analysis starts."

She said the city was likely to take 45 days or more to review the final offers before settling on a developer in late January or early February.

The city has been searching for 20 years for a firm to develop a beach resort to ignite flagging downtown redevelopment. The city's last attempt began in 1997 and deteriorated into dueling lawsuits in August 2003 between the city and the developer, eventually resulting in Oceanside paying Manchester Resorts $2.2 million.

The latest search began this year when the city contacted more than 400 developers about the 2.75-acre site that straddles Mission Avenue downtown. The city received 14 inquiries from developers by the April 2 deadline and approved six as finalists that month.

After two developers dropped out of the process during summer, the four remaining finalists gave presentations on their proposals in early September.

Details of the three finalists recommended by the city staff:

Faulkner USA has brought in Sheraton as its hotel chain, and the hotel operator would be the parent company of Sheraton, Starwood Hotels and Resorts Worldwide Inc. Its architect is Lee and Sakahara of Irvine, the same architect that designed the adjacent time-share resort being built by Fairfield Resorts.

Faulkner's proposal has the 270-room hotel on the southern block and the 26,000 square feet of retail space on the northern block. City officials have asked the developer to replace the office space called for in the project with time shares.

Pacifica's hotel chain is Embassy Suites, with its subsidiary as a hotel operator. Pacifica is headquartered in San Diego and operates a 600-room hotel at Los Angeles International Airport and hotels in Phoenix and Tampa.

Their architect is Carrier Johnson, which designed the Bridgeworks Hilton hotel in downtown San Diego. Pacifica's project calls for 278 suites and 33,000 square feet of retail space with an angular design with primary colors. It would feature a "view corridor" on the northern block

SD Malkin is proposing either a Marriott or a Sheraton hotel with 306 rooms and 23,000 square feet of retail. Its hotel operator would be Interstate Hotels, which is the largest independent hotel operator in the country.

Robinson said its U-shaped design will help maximize the number of rooms with ocean views, something he said was key for the resort to attract clientele and charge premium room rates.

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