After at least 15 years of proposals, financing has been obtained and a groundbreaking has been set for May 8 for the northern portion of the Lane Field mixed-use project overlooking the North Embarcadero.
Initial plans call for a $130 million dual-branded property with a 253-room SpringHill Suites and a 147-room Residence Inn, in addition to approximately 27,000 square feet of retail space and more than 400 parking spaces.
The hotels will be built on a 50-foot-tall podium.
Development plans also include a 1.6-acre public park with access to the waterfront.
The management agreement's term is 30 years from the hotels' opening in about two years, plus two 10-year options to extend.
The Lane Field hotels will be managed by Marriott International Inc. (Nasdaq: MAR) during at least the first five years.
The developers, who have had to wade through approvals from the city, Port District and California Coastal Commission among other agencies, include a joint venture of Portman Holdings, Lankford & AssociatesLLC, C.W. Clark Inc. and Hensel Phelps Construction.
The financing signals a milestone in establishing Lane Field and the North Embarcadero as a world-class waterfront destination, said Rob Lankford, president of Lankford & Associates.
“This is just the beginning of the evolution of downtown San Diego’s western waterfront, which we hope will soon become an open, welcoming and inspiring space for tourists, families, cruise ship passengers and San Diegans alike,” he said.
AIG Global Real Estate Investment Corp will serve as limited partner to the development venture; the San Diego offices of U.S. Bank will provide construction debt financing.
No timetable has been set for the estimated 400 rooms on Lane Field South.
General contractor Hensel Phelps plans to break ground immediately. The project is slated to open in early 2016.
Officials from lender U.S. Bank said they were happy to bankroll the current project.
"U.S. Bank is proud to finance the development of these two bay front, Marriott-flagged hotels," said Jim Nigro, market manager for U.S. Bank Commercial Real Estate in San Diego.
“Both brands are well-suited for business and leisure guests," said Janis Milham -- senior vice president of Modern Essentials and Extended Stay Brand Management, Marriott International Inc. -- in a statement. "Residence Inn is an extended stay power house, known for its unique service and amenities, while SpringHill Suites’ design and style are refreshing and popular in the select-service space.”
The SpringHill Suites is a select-service brand and Residence Inn is an extended-stay brand, both in Marriott’s portfolio.
John Portman & Associates will provide architectural services, supported locally by San Diego-based Joseph Wong Design Associates.
“The Port of San Diego is looking forward to the transformation of the Lane Field property -- one of the most historic landmark sites in San Diego -- with a high-quality hotel and public park along Harbor Drive,” said Bob Nelson, chairman of the board of Port Commissioners. “This hotel development helps fulfill our vision for a vibrant waterfront.”
Portman previously developed the Hilton San Diego Bayfront by the San Diego Convention Center.
Over the past 60 years, Portman Holdings has developed more than 50 million square feet of real estate around the world with a focus on hospitality, office and mixed-use properties.
San Diego-based Lankford & Associates LLC has completed more 4.4 million square feet of development at a total value of $1.2 billion.
Lankford projects include such developments as 655 Broadway in Downtown San Diego, the Scripps Northridge office complex in Scripps Ranch and the Hall of Justice in downtown San Diego.
John Portman & Associates Inc. is an internationally renowned architectural design firm with offices in Atlanta and Shanghai.