On a 5-0 vote, the Board of Port Commissioners agreed to enter into an exclusive negotiating agreement with Gaylord Hotels to develop a major 1,500- to 2,000-room hotel and 400,000-square-foot convention facility on the Chula Vista bay front.
Commissioners Stephen Cushman and Rocky Spane were absent.
The Nashville-based developer that owns the venue for the Grand Ole Opry outpolled proposals by JMI Realty and a joint venture of Manchester Resorts and Foxworthy Inc. However, just before he got on a plane, Cushman urged that JMI and Manchester continue to be considered to develop smaller hotels in other parts of the bay front Plan.
"This is a wonderful site. This is a huge site. I don't know why we couldn't work with the other proposers," Cushman said.
As explained by Randa Coniglio of the port's real estate department, the hotel and convention center will be one of the major catalysts for a projected $1.6 billion to $2 billion development that is destined to transform the South Bay.
"It was Gaylord that introduced us to this concept (as a destination convention hotel) in the first place," Coniglio said.
For a time, it appeared that Gaylord (NYSE: GET) was the only proposer; although Cushman was impressed with that firm's proposal, he wanted to see what other parties might be out there.
The port didn't only contact Manchester and JMI, it also sent direct-mail pieces to Disney, Trump (Nasdaq: TRMP), Harrah's (NYSE: HET) and Wynn Resorts (Nasdaq: WYNN).
Manchester Resorts executive Perry Dealy said the fact that his firm has already developed thousands of bay front hotel rooms next to the Convention Center should make it the strongest bidder.
"And we could provide up to $2.4 billion in debt financing -- not that we would -- but we could," Dealy said.
But Mike Horner, president of Florida's Kissimmee/Oceola Chamber of Commerce, said, "Gaylord came in and did what they said they would do, and they didn't ask for an extra penny."
In all likelihood, Gaylord would require some subsidy for this project, but the amount is still being determined.
Richard Campbell of the Pacifica Cos., the bay front master developer, said Gaylord should bring in about 300,000 new visitors solely through the use of its own hotel network.
"This almost ensures a successful project, almost no matter where the project is located," said Campbell, adding that Gaylord would have come to the San Diego area anyway even if this opportunity didn't exist.
An updated economic study on the hotel/convention center proposal is expected next month. That may provide a clue on just how difficult it will be to finance this project.