|By David Fried, North County Times, Escondido, Calif.|
Knight Ridder/Tribune Business News
Mar. 6, 2005 - ESCONDIDO -- For Escondido officials, the City Council's recently approved plans for a 197-room Marriott hotel next to City Hall and a 142-unit condominium across the street may be anything but small potatoes.
But for Craig Clark, president and CEO of C.W. Clark Inc., the developer whom city officials picked to bring a luxury hotel to the city's core, the project isn't the only dish on the table.
Nor are the obstacles the $105.2 million proposal is guaranteed to present.
The joint venture between the city and Clark marries Escondido's $12.4 million investment in parking infrastructure with the La Jolla-based developer's plans to build a $44.5 million hotel and $55 million condominium complex.
The city would also contribute $6 million toward the hotel development.
Clark will head a development team that includes the Colorado-based firms of Phelps Program Management, and Sage Hospitality, which will oversee construction and the hotel's operations, respectively.
The project will also commit Clark to addressing the concerns of some in the community who worry what the hotel might mean for the future of the California Center for the Arts' conference center facility, which under the proposal would be operated by the hotel.
The city would collect property, hotel and sales from the project, plus a percentage of revenues after the first decade.
"A developer's job is to take the risk and try and end up with a blended plan that satisfies as many people as possible," said Clark, describing how he sees his role in Escondido and other city's redevelopment efforts. "But first and foremost, it's got to make economic sense. Because, if it doesn't, it won't work for anybody."
Clark became a real estate broker after an aptitude test he took upon leaving the Navy in the late 1960s indicated that the young supply officer would be best suited for real estate or firefighting.
Since then, the east Texas native has moved from selling available parcels to developing dozens of retail projects throughout San Diego County, including the $20 million Gateway Center in Escondido that opened in 2003.
In recent years, the scope of those projects has expanded significantly, and includes reconfiguring large swaths of land as far away as downtown Yuma, Ariz., and as close as San Diego's decommissioned Naval Training Center, just west of Lindbergh Field.
"Where I ended up is probably closer to a fireman than a broker," said Clark, 64. "Because I'm always putting out fires."
Clark's partners on the Yuma and naval center projects credit him with patience and persistence in dealing with issues that flare up during the course of his projects, qualities they say are rare among developers.
"He listens," said Walter Heiberg, senior vice-president of McMillin Companies, which is the lead developer on San Diego's efforts to convert the 505-acre training center that closed down in 1997 into a flourishing neighborhood, complete with shopping, parks and other amenities.
McMillin has hired Clark to develop a 260,000-square-foot marketplace on the site, dubbed Liberty Station.
"He's patient and he works with the community," added Heiberg, who over the last 15 years has worked with Clark on several projects, including the naval center. "He makes the project fit the community and not the community to the project."
As an example, Heiberg cited Clark's decision to send out mailers to the 2,800 neighbors of the San Diego development to guide his search for compatible retailers for his $65 million endeavor.
"You don't see too many developers who come out to the community and say, 'What do you want?' " Heiberg said.
Heiberg also noted Clark's efforts to keep the naval center's historic chapel open.
For Clark, a former Navy supply officer who also served as a chaplain during his two tours in Vietnam, saving the chapel was a no-brainer.
"This was a funnel of young Americans coming into the service," Clark said of the 82-year-old chapel that once hosted his father and friends when they were recruits. "Those are important things for me."
Craig Clark said he plans to transform the community of Yuma, Ariz., although that goal was not what prompted him to respond to that city's request for redevelopment plans.
It was the possibility of good hunting and fishing that drew him east.
"As it turns out, I haven't had time to do much of either one," Clark said.
Clark's partnership with Yuma began in 1999, when the developer was selected from six applicants to head up the city's ambitious plans to completely revamp its historic downtown.
Along with a mix of retail shops and residences, the project includes a 150-room hotel and neighboring conference center, all built on 22 acres that sit along the banks of the Colorado River. It also included building Yuma's new city hall and administrative offices, a $30 million project that Clark and his partner in the Yuma Project, Lankford & Associates, completed in December 2002.
Charles Flynn, Yuma's riverfront development director, said that revitalizing a rundown city core that included an aging water treatment plant and a park designated as a national historic landmark was not a chore any developer could have tackled.
"This was a very raw, blighted site," Flynn said. "You have to have had vision to see this."
Throughout their work together, Clark showed persistence and willingness to adapt to the redevelopment project, Flynn said. That included quickly changing course when a local shopping mall backed out of renovation plans, and hanging around for five years while the city bought up all the land within the redevelopment area.
"He basically waited," Flynn said. "He understood that he might have to wait five years to see anything come to fruition on this development."
Along with providing the land for the project, the City of Yuma agreed to spend $3 million to develop a park along the riverfront, connected to the hotel.
For his part, Clark will invest some $80 million in Yuma's redevelopment efforts, including $20 million for an 18,000-square-foot conference center.
Clark said he expects a very lucrative return on his investment.
He won't pay rent on the hotel and conference center land in Yuma for the first 35 years of his 50-year ground lease. And a 1-percent surcharge will be applied to all sales within his redevelopment area, all of which will go to Clark for the first 10 years, and then divided evenly between the developer and the city.
Yuma's City Council unanimously approved that lease agreement last Wednesday.
But that decision also set the clock ticking. Under the agreement, Clark has 36 months to get the hotel and conference center up and operating. Otherwise, he loses the rights to build the other components of the Yuma project.
"The only thing between having this thing finished and not is my ability to get the financing and put it up," Clark said of his projects in Yuma.
Here in Escondido -- a 116-year-old city whose officials have aggressively pursued redeveloping the city's core -- the City Council gave the thumbs up to Clark's hotel and condominium plan earlier this month.
That decision has already left city officials and Clark trying to handle the prickliest element of the Marriott proposal: that the conference center attached to the California Center for the Arts, Escondido will be turned over to Marriott to operate.
That agreement between city officials and Clark has wrankled supporters of the arts center, which is owned by the city and operated by a nonprofit.
While the arts community has rallied behind the need to bring a top-notch hotel to the city, some arts leaders, including Angelo Damante, a regular donor to the center and a former executive director there, have expressed concern that losing the conference center would discourage donors and steal away the center's one consistent money maker.
The arts center has run a deficit in all but two years since it opened in 1994.
Clark contends that the conference center is a necessary component of the hotel project but said he hopes to work with community members to ensure a smooth transition and to foster a sense of trust.
"The last thing you want to do is step on anybody's toes," Clark said, adding that he expected that, under the hotel's purview, the conference center will ultimately increase business for the arts center's performances and museum exhibitions.
"That's the bet," he said. "Everything's a bet."
In the meantime, he said he expects to spend between $300,000 to $500,000 on business plans, designs and environmental studies, an investment he considers high risk, at least for now.
He and the city are not expected to sign a formal agreement on the project until later this summer.
"We can still lose this whole thing," he said. "They've only given us the vote to say we're going in the right direction, keep going. But by the time you go through the public hearing process and the naysayers come in and give their schpiels, you never know what's going to happen."
To see more of the North County Times, or to subscribe to the newspaper, go to http://www.nctimes.com.
Copyright (c) 2005, North County Times, Escondido, 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 email@example.com. MAR,