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The City of Seaside, California Agrees to Sell a Piece of
the Famed Bayonet & Black Horse Golf Course for
the Construction of a 330 room Resort Hotel

 
By Sukhjit Perewal and Clarissa Algentera - The Monterey County Herald, Calif.
Knight Ridder/Tribune Business News 

July 8, 2005 - One of the biggest development deals in recent Seaside history was approved unanimously by the City Council on Thursday night.

The agreement to sell a piece of the famed Bayonet & Black Horse golf course property for the construction of a resort hotel will bring the city $19 million to $20 million -- over time.

The deal is expected to ultimately bring millions in additional revenue annually in taxes from the hotel, the time share units and the housing lots, all of which are included in the development.

"This is really a dream come true," said Councilman Don Jordan.

As soon as the vote concluded, applause broke out in the City Council chambers acknowledging years of work put into the project. About 50 people in the audience joined in the applause with city officials, project managers and others.

"This is the future of Seaside here," said Mayor Ralph Rubio. "This is the moment we've been talking about for many years. This will give us the economic base we need."

In total, the city is selling 81 acres of the 380-acre golf course to Arizona-based Seaside Resort Development. The project includes a 330-room hotel, 170 time share units and 125 residential lots. The developers are obligated to build 38 affordable units.

Seaside will maintain ownership of the golf course. Recently the Seaside Resort Development bought out the lease rights for the golf courses from BSL Golf Inc. The city acquired the golf course from the Army in 1997 for $11 million, paid for by BSL Golf.

City officials and Seaside Resort Development are engaged in a separate set of negotiations over the terms of the lease agreement, which brings the city $100,000 annually.

Plans call for the hotel to be in the heart of the golf course, where the driving range is now. The range will be moved north to a weedy patch that is currently unused.

The main hotel building will have 170 guest rooms; another 160 will be built as separate two-story bungalows clustered around the main building, fronting the golf course.

While a hotel developer has not been agreed on, the Seaside Resort Development has released the names of seven hotel chains that it is negotiating with: Marriott International, Starwood Hotels and Resorts, Hilton, Hyatt, Fairmont, Four Seasons and Omni.

The residential lots will be scattered throughout the golf courses. The Planning Commission had recommended the neighborhoods not be gated, but City Council approved an option to erect gates around the community.

Larry Seeman, a project consultant for the city, said it was to the city's advantage to add gates because it would increase lot prices. The total sale price of the lots, $9.375 million, is based on the quarter-acre parcels selling for $400,000 each.

Seaside will receive $75,000 up front for each of the 125 lots that are sold. In addition, the city will receive 20 percent of the profit the developer makes when it sells the plots, after adding a host of improvements to the sites.

That is a conservative estimate, Seeman said, considering how much housing prices have increased and compared to Seaside Highlands, where housing prices top $1 million.

"It's a way for the city to participate in the appreciation of land value," said Seeman.

Seeman, who served a short stint as vice president of the Pebble Beach Co., has worked on project for the past four years.

While the development agreement calls for the housing and time shares to be built in phases, hotel construction is to be done in one phase and will take two years to finish.

Seaside Resort Development will be able to develop about 30 housing parcels and time shares before hotel construction begins.

If everything falls into place, said Richard Fitzgerald, construction on the hotel could start a year from now and be completed in two years. Fitzgerald is with Seaside Resort Development.

Construction will include relocation of the maintenance building to make room for time shares.

About 900 trees, mostly Monterey cypress, will be removed to make room for the construction. They will be replaced with the same number of similar trees.

Among the list of project approvals the City Council passed Thursday were the tentative subdivision map and certification of the environmental impact report.

Hotel and resort The project at Bayonet & Black Horse includes 330-room hotel, including bungalows 125 single family lots 170 timeshare units
Sukhjit Purewal can be reached at 646-4494 or spurewal@montereyherald.com. Clarissa Aljentera can be reached at 648-1171 or caljentera@montereyherald.com.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

By Victoria Manley, The Monterey County Herald, Calif.
Knight Ridder/Tribune Business News 

May 25, 2005 -- Hilton Monterey is being sold to a Southern California company whose top executive comes from Carmel. 

The 204-room hotel off Highway 1 on Aguajito Road is a leading property for the Monterey Peninsula's tourism industry. 

Terms of the sale to Valencia-based Ocean Park Hotels Inc. Ñ expected to close Thursday were not disclosed, but those close to the industry say it was reportedly for more than $20 million. 

Aside from a $5 million renovation plan set to begin in October, no major changes are planned after the sale, said James Flagg, Ocean Park Hotels president. "This is a chance to renew old acquaintances and return to the place that I consider home." 

Flagg, of Arroyo Grande, was raised in Carmel and is a 1974 graduate of Robert Louis Stevenson School in Pebble Beach. He said he's been interested in obtaining a Peninsula hotel since he started his business in 1999. 

The Hilton name will remain as part of the deal. Ocean Park Hotels also will keep the property's 100 or so unionized employees, he said, but is expected to replace management with its own. 

Among those who stand to lose their jobs is John Lloyd, Hilton Monterey's general manager for more than a decade. Rob Gauthier, Ocean Park Hotels' executive vice president in charge of hotel operations, will serve as manager until a replacement is hired. 

Flagg will visit the property today to meet employees, as will Leonard O'Neill, an officer of Local 483 of the Hotel Employees and Restaurant Employees union. 

O'Neill said the union "looks forward to working with the new owner." 

"Our relationship is already off to a good start," he said, because Flagg has agreed to recognize the union's existing contract with the hotel. 

Flagg, a member of Stevenson School's Board of Trustees, said he visits the Peninsula monthly. His family founded the Lou and Lori Flagg Awards of Excellence in Teaching, administered by the Community Foundation for Monterey County, which were named after Flagg's younger sisters, who were killed in a 1975 car accident. 

Ocean Park Hotels is relatively small compared to seller MeriStar Hospitality, a hotel real estate investment trust that owns 73 hotels nationwide. It owns 10 hotels in California and Arizona, and operates another two properties. It also has three hotels under construction Ñ two in Thousand Oaks and another in Valencia Ñ as well as five more planned for development throughout California. 

The hotel has changed ownership at least four times since it was built in the 1970s, including a one-time ownership to a Virginia limited partnership that went bankrupt in the mid-1980s. 

Hilton Monterey is a strong competitor with other large Peninsula hotels for guests employed by the U.S. government who are visiting nearby military installations, such as the Naval Postgraduate School. It also works cooperatively with the Monterey Convention Authority on marketing efforts to groups, said Carl Anderson, the city's public facilities director. 

"They have been a good partner in the past," he said. 

Anderson said Hilton "is an important property in Monterey," and that its name will remain "is encouraging." 

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To see more of the Monterey County Herald, or to subscribe to the newspaper, go to http://www.montereyherald.com.

Copyright (c) 2005, The Monterey County Herald, Calif.

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com. HLT, 



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