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Firm Given 90 Days to Break Ground on Hotel

August 08, 1985|DONNA ST. GEORGE | Times Staff Writer

CARSON — After numerous setbacks that cast doubt on the construction of an image-enhancing hotel in this city's Civic Center, officials this week approved a new development agreement that calls for work on the $22-million project to start within 90 days.

Members of the Carson City Council voted this week to approve a contract with the Feinberg Group, developer of the proposed 248-room Hilton, that gives the company until Nov. 3 to break ground and close escrow on the two-year-old proposal and provides up to $1.85 million in city rebates to help finance it.

"I think we made a gigantic step by going forward with this agreement," said Councilman Walter J. Egan. The project "is farther along than it's ever been. I voted for the hotel with the firm belief that the Feinberg Group will go forward. I hope very soon to see the signed check and the signed papers."

Still Some Details

Robert R. Amberg, general counsel for the Feinberg Group, said that although details of the hotel financing still need to be worked out, the new agreement will enable the developer to obtain commitments from prospective lenders. "With this agreement, we feel we can close on the deal," he said. Amberg said the Feinberg Group already has invested $600,000 in the project.

"It looks good for us now," Amberg continued. "Interest rates have gone down, and there seems to be a lot of interest in Carson for a hotel site. We think it is a great site for a hotel and a great site for a Hilton."

Such optimism has not always been characteristic of the hotel proposal, which has been troubled by persistent delays.

City officials have blamed the project's problems on the developer's lack of financing; the Feinberg Group has attributed the delays to a temporary citywide moratorium on hotel construction last year, a study that showed Carson is not a suitable location for a Hilton and time constraints set by city officials.

Option Expired

Perhaps the greatest blow to the proposed development came last November, when the Feinberg Group allowed its first option on the city-owned property to expire for lack of financing.

At that time, the company claimed that the city did not allow enough time to assemble financing, but city officials turned down a request to extend the company's option--already extended once before--on the property and began looking for other builders.

That search ended March, when officials decided that other developers were offering projects of lesser quality that would take more time to construct. The City Council, acting as the Carson Redevelopment Agency, voted then to give the Feinberg Group a final shot at developing a Hilton on the site, which the city is selling for about $5 million.

Community Centerpiece

The proposed 11-story Hilton, to be located in the city's Civic Center at Carson and Bonita streets, was initially sought by image-conscious city officials as a lucrative and attractive centerpiece for their largely industrial community. Officials also reasoned that construction of a first-class hotel would foster other high-quality developments in Carson such as fine restaurants and retail shops.

The agreement this week was approved by council members 3 to 0, with Mayor Kay Calas and Councilwoman Vera Robles DeWitt abstaining. Calas said she abstained because she owns property across the street from the proposed development, while DeWitt cited her discontent with the developer.

The arrangement provides that the company pay the city $20,000 every 30 days, for up to 90 days, to hold the option on the 6.8 acres, the former site of an auto dealership. It also provides that the city rebate to the company over seven years up to $1.85 million from the proceeds of the property's sale, but not more than what the city earns during that time in bed tax from the Hilton.

At least $700,000 of the rebate is to be used for advertising the hotel and the nearby Carson Community Center, a $13-million city meeting facility that officials say is underused and hope will become the recipient of some of the hotel's business.

$180,000 in Taxes

In addition, city staff projects that Carson will earn $180,000 more a year in taxes on the increased value of the redevelopment property.

The new agreement has been lauded by some city officials, who say that this time they believe the ground breaking will occur as scheduled. The hotel initially was to have opened in time for the 1984 Summer Olympics in Los Angeles.

"By all indications, the monies are there for the development of the project this time," said Councilman Thomas Mills. "The problem of the past has just been starting the project without the proper financing in place. Securing the financing has been the major problem all along."

Though pleased that it has progressed, the project's troubled history has left some people leery. The current agreement contains no provision for extensions.

Critical of Project

"In dealing with the Feinberg Group, I feel that they have not always acted in good faith with the city," said Councilwoman DeWitt, who has been one of the project's most vocal critics.

"They have a credibility problem," she continued. "Over the course of the last few years, there have been delays and problems with collecting our money and late payments. I'm still skeptical. If they've had a financing problem all along, what's going to change this time? We'd like the hotel, but at what cost?"

But Egan contended, "I have a belief that it will move forward this time, and I think that hotel is going to be a good addition to our downtown center. I think we're going to get more use of the community building, and we will begin to have night-time trade that will lead to a first-class restaurant in the city of Carson.

"It will be a good image builder and a good revenue generator."

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