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Hotels, marina on port panel's docket Tuesday

Notable hotels and a major marina are on the Board of Port Commissioners’ docket on Tuesday.

The proposed Sunroad Harbor Island Hotel, the option and lease agreement for the Lane Field North hotel projects, the loan for the Kona Kai transformation and new construction at the Harbor Island West Marina are each slated to be considered.

Sunroad Enterprises' plans call for the creation of a 175-room hotel on one of Sunroad's leaseholds at 955 Harbor Island Drive overlooking the 600-slip Sunroad Marina on Harbor Island.

The action Tuesday, which can be appealed to the California Coastal Commission, would be to approve the project in concept and certify its environmental impact report.

The Sunroad Project would be a limited service hotel with ancillary meeting and fitness space, common areas, an exterior pool and additional surface parking on East Harbor Island.

The proposed hotel would be similar in quality and amenities to a Courtyard by Marriott or a Hilton Garden Inn.

If all goes according to plan, the hotel wouldn't be the only new one on Harbor Island. In fact, the approved Harbor Island master plan could allow for as many as 500 new hotel rooms on this part of the island.

The approvals being considered here are not part of the Sunroad leaseholds where the Island Prime and the old Reuben E. Lee restaurant barge are being redeveloped.

Sunroad’s current minimum annual rent for the marina is $900,000. Last year, the marina paid almost $1.07 million in percentage rent to the district.

If the option is exercised, the new rent schedule will accelerate from flat rent of $900,000 in year one of the new lease to an estimated total minimum and percentage rent of nearly $2.07 million in year five.

Sunroad's current lease is slated to expire in 2037.

Commissioners are also expected to formally ratify the option and lease agreement for the Lane Field North hotel projects.

Rather than develop a large hotel on the Lane Field North site, Lane Field LPP elected to build a 253-room Springhill Suites by Marriott and a 147-room Residence Inn by Marriott on the same property. The project is expected to cost about $130 million to complete.

Along with the rooms, the developers are planning 5,600 square feet of meeting space; approximately 23,000 square feet of visitor-serving retail; and a minimum of 414 parking spaces.

The Lane Field partnership consists of Rob Lankford of Lankford & Associates, Hensel Phelps Construction and Portman Holdings.

The term of the management agreement is 30 years from the opening of the hotels plus two 10-year options to extend.

The hotels will be managed by Marriott during at least the first five years of operations.

Thereafter, the developers would have the right to contract with another manager provided the hotels remain franchised by Marriott.

AIG Global Real Estate is the proposed lender for at least this phase of the Lane Field project, which, depending on weather and other considerations, is expected to break ground on or about St. Patrick's Day.

Port commissioners will also entertain a second reading of a $16.5 million loan proposal (about $14.3 million for actual construction) designed to transform the 129-room Kona Kai Resort on Shelter Island into an upscale boutique hotel. The property is at 1551 Shelter Island Drive.

Some of the upgrades are to include 41 new guestrooms, restaurant renovation, upgrades to the spa and fitness center, a new two-story marina building, a second pool and deck, and additional parking.

The developer and current owner of the Kona Kai leasehold is a partnership of Washington State-based Nobel House & Resorts.

Along with redeveloping the Kona Kai, Nobel House plans to consolidate the hotel leasehold with the Kona Kai Marina once the financing for the marina has been paid off in about three years.

The commissioners are also expected to give final approval to extend the lease and reduce the number of slips to facilitate other construction at the Harbor Island West Marina at 2040 Harbor Island Drive.

With nine years remaining on its 42-year lease, HIW Associates plans to negotiate an extension in order to spend about $20 million to upgrade the facility and reduce the number of slips from 620 to 603, provide an 8-foot-wide public promenade and deck, and generally upgrade the marina's facilities.

Other improvements to Harbor Island West would include the replacement of wooden docks with concrete piers and the demolition of all existing buildings and structures.

The port reports that the Harbor Island West Marina generated almost $1.04 million, or about $1,669 per slip last year. The 608-slip Sunroad Resort & Marina had a $1,748 per-slip revenue, and it was followed by the 425-slip Cabrillo Isle Marina on Harbor Island with a $1,687 per-slip average.

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