|By Tanya Sierra, The San Diego
Union-TribuneMcClatchy-Tribune Regional News
Aug. 25, 2009--Plans to demolish the 48-year-old Seacoast Inn in Imperial Beach and replace it with a luxury resort are on hold because the developer is struggling to obtain financing.
Developer Ash Israni of Pacifica Cos. met with city officials last week and indefinitely postponed the beachfront hotel project. Financing was based on a hotel-condominium model, with rooms sold as limited-term-occupancy condominiums.
With other hotel-condominium projects, buyers have sued with claims that they were led to believe they were buying as an investment, but saw little profit. Pacifica's Allison Rolfe, who is the project manager, said the lawsuits have scared off potential financial firms.
Demolition, which was expected to start this month, also was postponed in February and last August.
Mayor Jim Janney, in a letter to the community sent Friday, expressed deep frustration with Pacifica, which has invested $1 million in the project.
"For over a decade Pacifica has misled us to believe they wanted to make improvements to a hotel that is far below acceptable standards," Janney wrote. "The existing hotel is a disgraceful example of a waterfront property and an embarrassment."
The deteriorating Seacoast Inn, built in 1961, is steps from the ocean and a quick walk to the Imperial Beach Pier. Paint is peeling from the building and wooden railing is worn.
Councilwoman Lorie Bragg said this year she was told guests have to bring their own sheets. Reviews on travel Web sites describe rooms that are in poor condition.
The plan was to replace the Seacoast Inn with a "contemporary Mediterranean" resort with two curved buildings with 78 rooms, all with ocean views. The inn would have oceanfront dining, conference facilities, underground parking, a pool and waterfalls. Pacifica also was pushing for a Leadership in Energy and Environmental Design designation, which encourages green building and development practices.
Rolfe said Pacifica needs time to develop financing.
"We still intend to build the hotel," Rolfe said. The financing problem "is compounded by the assumption that we would sell the rooms, and it appears that the condo-hotel market is dead."
Pacifica obtained permits for the Seacoast Inn based on the hotel-condominium model. Traditional hotels are not getting funding, and it has been even more difficult for the Seacoast Inn, Rolfe said.
At least four hotel projects in the county have obtained the requisite permits but can not get funding to build, she said.
"It's really difficult to get financing for hotels right now in this environment," Rolfe said.
Tanya Sierra: (619) 293-1705;
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