$225 million luxury hotel proposed for Anaheim, next to Convention Center
Art Marroquin | The Orange County Register | December 21, 2015 2:55pm
Dec. 19--ANAHEIM -- A developer filed plans this week to tear down the Anabella Hotel and purchase 1.8 acres of adjacent city-owned property to build a $225 million luxury hotel next door to the Anaheim Convention Center, aimed at attracting well-heeled guests who are in town for major conferences.
FJS Inc., an affiliate of the Wincome Group, could start construction as soon as 2018 on a 634-room hotel standing up to 115 feet tall, with 30,400 square feet of retail space along Katella Avenue. It would also have 50,000 square feet of meeting and ballroom space.
While the luxury brand has not been announced, the proposed hotel would be built on 6.8 acres just south of the Disneyland Resort.
"Some of the tech and medical conventioneers with more disposable income will spend money in Anaheim's stores and restaurants, but we need to have the proper level of hotel accommodations for them to enjoy," said Paul Sanford, asset manager for the Wincome Group.
"We really need to attract that luxury-hotel market, so I don't see this as a glut at this point," Sanford said. "We want the market to be calculated carefully so that we're all successful."
This is the third luxury hotel announced this year for Anaheim's resort area.
Another Wincome affiliate, Good Hope International, filed an application last month to demolish the Anaheim Plaza Hotel & Suites to make way for a 78-foot-tall hotel with 580 rooms, 25,600 square feet of retail and 50,000 square feet of meeting space.
Prior to that, O'Connell Hotels & Hospitality and Prospera Hotels announced plans, in August, to spend $150 million to build a new JW Marriott Hotel with 466 rooms at the GardenWalk mall.
"We believe that having 2,500 four-diamond-level hotel rooms will establish a robust luxury market, and we're rapidly approaching that number," said John Woodhead, Anaheim's community development director.
If approved, the proposed luxury hotel would be built on the site of the 358-room Anabella Hotel. Wincome purchased the property in 1998, when the site held the Magic Lamp, Magic Carpet and Golden Forest motels. All three of those motels were combined and redeveloped into the Anabella's current mission-style architecture in 2001 for $10 million.
Additional land is needed for the development, so Wincome will now negotiate with Anaheim city officials to purchase a 77,822-square-foot surface parking lot that's currently used for construction parking as the Convention Center undergoes a 200,000-square-foot expansion. That $180 million project is scheduled for completion in summer 2017.
The City Council quietly agreed behind closed doors on Tuesday to begin those negotiations. A proposed sale price was not disclosed, but a deal is expected to be reached in a few months.
"There isn't a lot of open land next to the Convention Center, so this opportunity is a dream-come-true for us," said Jay Burress, president and CEO of Visit Anaheim, the agency charged with booking events at the Convention Center.
"This new hotel will help support the expansion of the Convention Center, because it will allow us to go after those large meetings whose attendees look for higher-quality hotels," Burress said. "Together, these projects will put us in the top tier of convention destinations."
Like the two hotels announced earlier this year, the Wincome Group is expected to apply for a city subsidy that will allow the developer to receive a 70 percent return on bed taxes collected over 20 years.
Another 20 percent of the taxes would help cover massive improvements made to Anaheim's resort area in 1996, with the remaining 10 percent going to Anaheim's coffers.
The economic incentive package was narrowly approved by the City Council in June, aimed at encouraging developers to build hotels that meet AAA's guidelines for four-diamond ratings.
At the end of the agreement, the city would collect 100 percent of the bed taxes generated by the hotel.
For now, the Disneyland Hotel and Disney's Grand Californian Hotel & Spa are the only hotels in Anaheim that meet AAA's four-diamond rating.
Anaheim's Planning Commission could review the project by late spring, then thee project could head to the City Council for final approval.
Wincome has hired a consultant to calculate the hotel taxes that could be generated during the project's first year of operation. Citywide, hotel taxes are projected at $133 million through the current fiscal year, accounting for nearly half of Anaheim's revenue.
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