Grover Beach may help developer fund hotel project

October 7, 2016
Matthew Bronson

Matthew Bronson

By JOSH FRIEDMAN

As a reward for potentially generating millions of dollars in tax revenue for the city, Grover Beach may financially assist a developer that plans to build a hotel on a site with no water and sewer connections. The developer is requesting a few forms of financial assistance which total more than $2 million.

Los Angeles-based development firm Urban Commons is planning a 132-room hotel at 950 El Camino Real, which is located near Highway 101. Urban Commons has secured financing for the project and plans to begin construction this month, according to a Grover Beach staff report.

However, the developer is requesting financial assistance from the city in order to afford the costs of installing water and sewer mains. The water main is expected to cost at least $1.38 million, and the sewer main is expected to cost $754,000.

In a letter to Grover Beach City Manager Matthew Bronson, Urban Commons requested the city consider paying half the water main costs, or $690,000, and 60 percent of the sewer main costs, or $452,000.

Additionally, Urban Commons requested that Grover Beach waive most of the transient occupancy tax (TOT) that the developer would pay over the first five years of operating the hotel. Urban Commons offered to pay just $778,000 of the projected tax bill of more than $2 million.

In all, the financial assistance would total about $2.4 million.

Bronson stated in the staff report the planned hotel is an important economic development project that will broaden the city’s tax base. He suggested the city council consider providing financial aid to Urban Commons, which could come in the form of upfront reimbursement for infrastructure costs, reimbursement overtime and/or deferred payments of development fees and/or TOT.

Grover Beach’s general fund reserves are only about $350,000 above the mandatory 20 percent minimum. Financially assisting Urban Commons may involve the city borrowing money from its wastewater fund, according to the staff report.

On Monday, the issue was on the agenda at a council meeting. The council opted to take no action and continue the hearing in the near future.


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21 Comments

  1. CCCentrist says:

    OK, 950 El Camino Real is in that tree filled zone along the frontage road north of AJ Spurs and ManRock Brewing Co and just south of 4th Street, Oxford Suites and Motel 6. I understand that hotels can bring in some tax revenue (after waiting 5 years, in this case!), but why do we have to continue destroying some of the last remaining natural habitat in our area to mostly benefit the few? The entire Central Coast, especially there, has had the natural rain drainage and creeks destroyed by the last century of development.

    There are numerous developed spaces already for lease that could be used for this purpose, some just across the freeway on Oak Park Blvd. have been vacant for years.

    And letting the city borrow/creatively-move money around to GIVE non-local investors $2.4 million so they can further urbanize our coastal corridor? No!

    And, yes, as many here have pointed out: where is this new water use going to come from? It’s ironic that the city is considering gifting the developers with the water main, to use more of one of our most precious commodities, while CA dries up.

    So yeah, let’s fight this, and future projects that inefficiently destroy our natural resources! And follow the money, as others here have proposed.

    (9) 9 Total Votes - 9 up - 0 down
    • lizdoukas says:

      Thank goodness one councilmember spoke up about how irresponsible it would be to GIVE moneys to developers to develop projects in our city that we don’t have enough water for, that would indebt this city even more, jeopardize how cities should do business and set a precedent that Grover Beach will GIVE MONEY to anyone who wants to profit off all of us. Of course they want us to waive fees–more money for them!!!
      Point of fact–Mayor Shoals has already “brokered” a deal in violation of the original bid contract for us citizens to foot the bill for infrasctructure for the Grover Beach Lodge and Conference Center//an additional $6.5 million of debt!!–this after having TURNED DOWN $2.5 in block grant moneys for that very purpose!!!–just because their requirements for the money didn’t meet Political Favor Mayor Shoals’ “vision” of what HE WANTS!!! Mayor Shoals works for us, the cizitens, not for the interests of whether some national development company needs to pencil in their profits at our expense!!! It is very clear who Political Favor Mayor Shoals represents–his cronies in the building and development world that he has worked with for many, many years, and that would ingratiated themselves for personal gain–sycophants!!!..If a project is a good, solid project, proposed by a reputable builder who doesn’t need to seek any Pay to Play favors, we would more than welcome a reasonable development that is an asset to the community.
      But if Mayor Shoals has to continue to do back-door deals, bargain away our future for a developer’s profit margin, it is NOT GOOD and should not be even considered on any level!!
      No other city would even think, in today’s environment, to “waive” anything–The City of Grover Beach already is underfunded in PERS to the tune of $20 million, another $47 million in street repair bonds the homeowners have to pay for until the end of their days, and then another $6.5 million in financing infrasctructure for the Beachfront Lodge//why don’t we just live within our means, become fiscally responsible instead of reckless, and just take care of city business, bolster what we have and tighten our belts for the future of our financial health and the quality of life for all who want to live and prosper in paradise??!!??

      (1) 1 Total Votes - 1 up - 0 down
  2. citygirl says:

    of course, John Shoals has his mitts in this, that is what John does, after all he was mentored by Adam Hill.

    (8) 8 Total Votes - 8 up - 0 down
  3. AmericaBeautiful says:

    Yeah, let’s change the Central Coast so it looks exactly like Irvine or Las Vegas and make sure we have lots more traffic and problems.
    This will be a horrendous mistake…but lots of you retirees won’t be around to see your sad legacy.

    (12) 12 Total Votes - 12 up - 0 down
    • lizdoukas says:

      As a candidate for Mayor of Grover Beach, Ron Arnoldsen has commented many times that we are in such a unique and beautiful area on the Central Coast–people can see the ocean just driving around, uninterrupted views in many areas, plenty of parking for visitors, recreation, horses, kids–why not just leave it as it is? Why destroy the one thing that makes Grover unique? It would be such an asset and a truly unique and wonderful experience we’ve been enjoying and so many others can enjoy in perpetuity–any weekend, especially in the summertime, the area that has been used for decades for recreation, for the citizens, for the community. Our current Mayor and City Council want to plow over and build build build, until there isn’t a square foot of native land left, all the horses are gone, all the citizens and visitors will have no place to park and walk down to the beach–all gone, just like Southern California!!!!

      (1) 1 Total Votes - 1 up - 0 down
  4. CentralcoastRN says:

    How about The City of Grover Beach fix our roads WITHOUT taxing its citizens? How about Grover Beach straighten out the seedy hotels ALREADY in Grover?

    Water rates have gone up because of their mismanagement.

    I don’t trust the City Council to make good business or money decisions.

    (29) 31 Total Votes - 30 up - 1 down

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