The development of a hotel and water park that’s been four years in the making on Harbor Boulevard in Garden Grove is set to move ahead following a land transfer and a new investor in the development.
The 12-acre Great Wolf Lodge—which includes a 603-room hotel and a 3-acre indoor and outdoor water park—is now seeing early-stage construction move ahead following a series of transactions involving the project’s developer, Loveland, Colo.-based McWhinney Real Estate Services Inc.
The city of Garden Grove last month deeded over the land for the project to McWhinney, a privately held developer that first announced plans to build the estimated $300 million project in 2010.
The development was initially expected to break ground in 2011.
The site is near the intersection of Harbor Boulevard and Lampson Avenue, about two miles south of Disneyland and the Anaheim Convention Center.
The land’s value has been estimated at about $22 million, or $1.8 million an acre. The city, acting as the successor agency to its now-disbanded redevelopment agency, gave the property—the former site of an RV park—to the developer at no cost.
Garden Grove’s city council has also approved issuing nearly $50 million in bonds to help finance the project’s construction.
Tax Revenue Projection
The project, which is now expected to open in the summer of 2016, is expected to bring in about $8.5 million in tax revenue in its first year of operation, according to city documents.
The projection assumes an average daily room rate of $350 and 70% occupancy at the resort, according to city filings.
The average daily rate for rooms in Orange County currently runs about $130. It’s closer to $120 in the area around Disneyland, according to hotel brokerage data.
Two existing retail structures and two older homes at the site are being torn down to make way for the construction.
In addition to the 130,000-square-foot water park and the 12-story hotel—one of the largest hotels to be built in Orange County in years—the project is slated to hold 30,000 square feet of conference space, 18,000 square feet of shops and restaurants, and a parking structure.
Great Wolf Lodge’s general contractor is Turner Construction, which has an office in Anaheim. The project’s architect is Ware Malcomb of Irvine, according to McWhinney.
Little Rock, Ark.-based Bank of the Ozarks is providing financing for the development; CoStar Group Inc. records show McWhinney received a $65 million loan to help fund construction.
West Partners
The resort was initially billed as a venture between McWhinney and Madison, Wis.-based Great Wolf Resorts Inc., an owner and operator of drive-to family resorts featuring indoor water parks and other entertainment activities.
The Garden Grove project is expected to be Great Wolf Resorts’ largest indoor-outdoor water park in the U.S. and would be the company’s first location in California.
Great Wolf Resorts had a 15.3% stake in the venture as of last year, according to regulatory filings. The company had been publicly traded until 2012, when it was bought by New York private equity firm Apollo Global Management.
The Garden Grove project got a new investor this month.
West Partners, a Carlsbad-based private investment firm, said it had closed on an investment in the development and long-term ownership of the Great Wolf Lodge.
The size of the investment was not disclosed. West Partners said its investments range from $10 million to $100 million and that it typically takes a controlling stake in the ownership of its investments.
McWhinney and Great Wolf Resorts are remaining as investors in the project, according to West Partners.
The project is the second large Garden Grove redevelopment project involving McWhinney along a roughly two-mile stretch of Harbor Boulevard. The city is now rebranding that area as the Grove District.
In the late 1990s, McWhinney worked with the city and Englewood, Colo.-based Stonebridge Cos. to turn a 28-acre parcel of
land along Harbor Boulevard into a three-
hotel development that totaled more than 500 rooms.
