Construction officially kicked off with a ground-breaking ceremony Wednesday morning for two long-awaited luxury hotels that will overlook the Oceanside beach and pier from the foot of Mission Avenue.
“We’ve never lost our optimism for what can be accomplished here,” said Jeremy Cohen of S.D. Malkin Properties, the developer. “We view it as both a privilege and a responsibility.”
A destination resort has been planned for the site since Oceanside formed its now-disbanded redevelopment agency in the 1970s, and the city has courted developers for the project since the 1980s.
Some people say the city has been trying to build another resort there since the opulent, four-story South Pacific Hotel burned to the ground on the site in 1896, when Oceanside had just 350 residents.
Downtown Oceanside has seen an economic and cultural revival in recent years, with the opening of new town-homes, restaurants, craft beer gardens and other attractions.
Malkin Properties came into the picture almost 15 years ago, after a previous project failed and the city announced it was again accepting new proposals for the site.
A global real estate company with an office in San Diego, Malkin’s projects include the Hilton Gaslamp and Cable Building Lofts, both in San Diego. Oceanside picked Malkin from several finalists with proposals for the site in 2005.
But Malkin’s Oceanside project did not unfold smoothly. There’s been a national recession, multiple approvals needed from numerous government agencies, a failed legal challenge, and a complicated financing package, all bringing delays.
Malkin announced two weeks ago that it had obtained $155 million in construction financing, finally overcoming one of the last hurdles.
Construction begins immediately on both hotels with plans to open for guests by the end of 2020, Cohen said Wednesday.
Oceanside Mayor Peter Weiss also spoke at the ceremony, held in the parking lot at Pacific Street and Mission. He welcomed City Council members Jack Feller and Esther Sanchez, and recently retired Councilman Jerry Kern, and noted that they helped bring the project to fruition.
“There has always been a commitment on the city’s part to advance this project, and that’s rare in today’s business and political climate,” Weiss said.
The tallest of the two hotels will be the seven-story Joie de Vivre north of Mission, with 161 guest rooms and suites, a roof-top pool and bar, a luxury restaurant, and 3,000 square feet of retail shops.
South of Mission facing Pacific will be the six-story Destination hotel, with 226 rooms, a 9,000-square-foot elevated deck with a pool and ocean views, a restaurant, bar and lounge, library, luxury spa and more than 20,000 square feet of meeting and event rooms.
Joie de Vivre and Destination are separate national brands for collections of distinctive hotels. Joie de Vivre includes the well-known Carlton Hotel in San Francisco, and Destination includes L’Auberge Del Mar. Last year, both groups were purchased by the Hyatt Hotels Corporation, which has more than 750 properties in 55 countries.
Also Wednesday, Maria Mingalone, executive director of the Oceanside Museum of Art, announced a partnership with Malkin that will allow the museum to display the work of local artists in the public spaces of the hotels.
Both Oceanside hotels will have underground parking, linked by a drive-through connection beneath Mission Avenue.
Together the hotels will occupy two city blocks on 2.75 acres that the Oceanside City Council voted 3-2 in 2001 to buy for $3.6 million. At the time,+ the property was in 24 separate lots occupied mostly by old, single-family homes.
The project includes the restoration of the Graves house, a small cottage built in 1887, and now known as the “Top Gun” house for its role in the 1983 hit movie. The house is a rare example of “Folk Victorian” architecture, an affordable style of Victorian that was widely built until about 1910.
Now fenced off at the corner of Pacific and First Street, the house will be moved off the site during construction and later returned as part of the Joie de Vivre Hotel, perhaps to be used as an ice cream parlor.
A notable near-miss for the Oceanside site was a 12-story resort to be built by San Diego hotel magnate and onetime Union-Tribune owner Doug Manchester. His idea included closing parts of three streets, including Pacific, but the controversial plan failed to get the state Coastal Commission’s approval.
The Oceanside City Council approved a $13.6 million subsidy in 2014 for the resort, primarily in the form of a rebate on transient occupancy tax to be spread over its first 15 years. The tax is added to the room rate charged to hotel guests.
City officials expect the Malkin project to generate $30.7 million in revenue to the city in its first 15 years, and to create 225 full-time and 55 part-time jobs upon completion.