Jun. 18, 2009--OCEANSIDE -- After years of bureaucratic delays and lengthy negotiations, the City Council on Wednesday took what one resident called a "golden step" and approved a development deal for a long-sought beachfront resort.

The vote was unanimous.

The agreement calls for a $27.6 million public subsidy and a 75-year lease of city-owned property, with an optional 24-year extension. Developer S.D. Malkin Properties of San Diego signed last month.

"I came here to pop the cork tonight," Councilman Jack Feller said.

The $209 million resort is planned for two city-owned blocks near the Oceanside Municipal Pier. It includes a 289-room Westin or Hyatt hotel, 48 timeshares, a 47-room boutique hotel and 18,500 square feet of commercial space.

It will have to be the same quality as the Loews Coronado Bay Resort or the Marriott Coronado Island, the deal states.

The parties agreed on the main deal points three years ago, but the final document adds more than 250 pages of legalese.

Oceanside's redevelopment agency will issue bonds tied to increases in property taxes for most of the subsidy. It will also provide redevelopment funds based on the hotel's performance.

City leaders see the luxury resort as a catalyst for other major development projects in the downtown core.

Oceanside's total investment, including site acquisition costs, should be around $37.4 million, a city report states. Officials expect to make $72.8 million from taxes and lease payments over 75 years. That's a return of roughly 1 percent annually on the city's investment.

Economic Development Director Jane McVey said there will be indirect revenue as well, such as sales tax from hotel guests shopping downtown.

So when will the resort take shape? Malkin's Web site makes this outdated claim: "Construction to commence in 2008."

The development deal gives Malkin 18 months -- plus two optional six-month extensions -- to secure financing. Construction is expected to take 24 to 40 months.

Jeremy Cohen of S.D. Malkin acknowledged after the meeting that the economy will present a challenge, but "it has been four years and we haven't blinked to date."

Councilwoman Esther Sanchez compared the city to someone sitting in the back seat of a car, asking over and over, "Are we there yet?"

"I look forward to the day when we say, 'Yes, let's get out of the car and have that drink on the beach,'" she said.

Malkin's portfolio includes the Hilton hotel in San Diego's Gaslamp Quarter and a luxury shopping center in Beverly Hills.

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