A long-awaited hotel project at San Clemente’s Marblehead Coastal property appears to be taking steps toward construction.
Property records show an affiliate of Newport Beach-based Craig Realty Group, whose Outlets at San Clemente opened in 2015 just west of the San Diego (5) Freeway, last month brought on a financial partner for a future phase of hotel development next to the 350,000-square-foot first phase of the retail site.
The $10 million deal involved a roughly two-acre parcel just off Avenida Vista Hermosa north of the existing outlets property, records show.
Chicago-based real estate development firm Prime Group Inc. is now a financial partner for the new ownership group, which operates as Lodge at San Clemente LLC. Craig Realty’s founder, Steve Craig, remains the manager of the newly formed LLC.
The LLC took out a $4.3 million loan with Chicago’s Metropolitan Capital Bank & Trust to finance the transaction, according to CoStar Group Inc. records.
Craig previously proposed a 129-room hotel for the site called The Lodge at San Clemente, and once envisioned a 2008 or 2009 project opening.
The last recession and a protracted legal fight over the fate of Marblehead Coastal between prior owners Lehman Brothers Holdings Inc. and SunCal Cos. put the project and others at the San Clemente site on the back burner.
Environmental documents related to a portion of the hotel project were filed with the city in March. A hotel operator hasn’t been announced.
Filings with the city note the hotel’s “construction and operation are anticipated within the near future.” The hotel and conference center would share a similar architectural style to the outlets center.
Prime Group and Craig Realty have worked together on other projects, last year as partners in the buy of an outlet mall outside of Chicago where they plan a major redevelopment.
The hotel progress comes as Craig Realty works to add more dining and entertainment options next to the outlet center, which city officials said hasn’t brought in the amount of sales taxes initially envisioned.
The developer is working with Newport Beach boutique restaurant and retail consulting brokerage firm Brandon-California to lease nearly 70,000 square feet of restaurant and retail space on the center’s edges, according to marketing documents for the site.
Individual spaces, typically 5,000 square feet to 10,000 square feet, will be branded Playa, according to Brandon-California.
Park Place North?
Irvine-based LBA Realty, which runs much of the massive Park Place mixed-use campus near John Wayne Airport, plans a similar project in San Jose, according to news reports from Silicon Valley.
The privately held company plans to turn a portion of a nearly 70-acre industrial site it bought this year in North San Jose into a retail and hotel project, according to the Silicon Valley Business Journal.
It’s seeking city approval to rezone 33 acres to allow 100,000 square feet of commercial space and a 250-room hotel, according to the report.
LBA in March paid $130 million for the site, which “currently consists of large stretches of empty land and some big industrial buildings, including a complex occupied by Lumileds, an LED and automotive lighting firm,” noted the Mercury News.
The site is near offices used by Apple, eBay, Verizon Communications and numerous other tech firms.
A schedule for any city hearings on the proposals hasn’t been announced.
In Irvine, LBA opened a hotel at Park Place this year, the 176-room AC Hotels by Marriott, which is owned by Pacific Hospitality Group in Irvine. An apartment project by Irvine-based Sares-Regis Group is also moving toward completion.
The company’s looking to lease an empty chunk of space at the 165,000-square-foot retail portion of Park Place, a roughly 30,000-square-foot building vacated by Sports Chalet last year. Real estate sources tell the Business Journal it’s close to landing an iPic Theaters, a high-end movie and events facility, to take over the empty space.
It would be the Boca Raton chain’s first location in Orange County. It has theaters in Pasadena and the Westwood area of Los Angeles.
