Perry Dealy Development


Gaylord retreat opens options for Chula Vista bayfront
The San Diego Daily Transcript Source Code: 20081118tdc
Tue Nov 18, 2008 - 9:21 PM ET - Download

It has been said that when one door closes, another opens, and Chula Vista, smarting from the loss of the Gaylord hotel project, is counting on that being the case.

The 32-acre site, which itself is but one component of a 550-acre bayfront masterplan, could be developed as a hotel, a Chargers stadium that would need to expand beyond the site boundaries, or a major mixed-use development that could include a couple of hotels, retail, office and perhaps educational uses.

Perry Dealy, Dealy Development CEO, who also is a former Manchester Resorts president, said he is interested in developing a plan for the site, which could include two hotels instead of one, adjoining retail, and perhaps office and educational functions as well that again would need to spill out beyond the 32 acres.

Dealy had first eyed this site more than a decade ago.

Pacifica Cos., which is masterplanning all 550 acres, has a plan that is subject to change, but at last report called for up to 2,000 residential units, the hotel, 300,000 to 475,000 square feet of retail and office space, and significant public spaces. Pacifica officials could not be reached by press time Tuesday. Gaylord's 1,500- to 2,000-room hotel was, for the past few years, eyed as the catalyst that would make the rest of the masterplan happen.

Without Gaylord (NYSE: GET), it may have become more difficult, but Dealy said the fundamental strengths of the site remain.

"While this is a huge disappointment for Chula Vista, the property represents a phenomenal opportunity," Dealy said. "This is the last major undeveloped parcel in the area. I see this as a comprehensive mixed-use project."

Dealy, who said a Chargers stadium could be part of this plan, said Chula Vista would be wise to use the down economy to its advantage by redoubling its planning efforts. Then it can be ready when the financial markets rebound.

"You need to get everything entitled so you're ready when things go back on the upswing," Dealy added. "Now is the perfect time to plan."

There were many reasons the Gaylord project might not have worked. Battles with unions nearly doomed the project once. A bureaucratic maze with more than a half dozen agencies was another reason cited. Mesa, Ariz., which doesn't have to deal with a port, a Coastal Commission and a state Lands Commission, was that much more attractive.

Finally, it was the economy that appeared to deliver the coup de grace.

Dealy said even if the hotel had been built, that unless the development had been constructed with a great deal of development around it, it might not have fared well.

"A single hotel wouldn't make it. You have to have everything else," Dealy said.

Chula Vista Mayor Cheryl Cox, who recalled how both Gaylord's Washington, D.C. hotel and Mesa hotel sites are surrounded by dense development, also said that such synergies can make hotel projects work.

Cox said the city will need to step back, find a vision, get a development partner and move forward.

Along with determining what will go on the property, Cox said a financing plan will be needed to pay for what had been billed as $78 million in needed above ground and subterranean infrastructure needed to support the project.

Gaylord was supposed to pay much of this expense through its lease payments, tax increment financing, sales tax revenues and transient occupancy tax receipts.

"We've got to go back to our economic models," Cox said. Everyone seems to agree the site on the edge of the Sweetwater National Wildlife Refuge is a prime location for whatever is eventually developed.

Robert Rauch, a hotel owner and consultant, said the waterfront sites in Oceanside and Chula Vista should be the next hotels developed, but he too said he could see how a stadium might make sense at the former Gaylord location.

Like Dealy, Rauch said the time is now to start planning anew.

"It will take three to five years for anything to get going. When something would be built -- say 2013 to 2016, the market should be very different," Rauch said.

As for the viability of a stadium on the Gaylord site, Chargers counsel Mark Fabiani said he is going to wait and see how the port and Chula Vista proceed, before the team puts itself into the conversation.

The team has been unable to make proposals work at the Qualcomm Stadium site, an eastern Chula Vista property, and a bayfront property at the old LS Power generating plant. That last property is hampered by the fact the old plant can't be torn down without a way to replace the lost capacity.

While the Chargers aren't technically obligated to do anything for another 12 years, the team has the option of shopping other cities as early as this February. Fabiani insists that moving the team would only be a last resort, however.

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