Plans to build a 155-room hotel on the county Fairgrounds have collapsed, a fair official said Thursday.
TN Properties of Scottsdale, Ariz., has backed out of the project because it was unable to obtain financing by an Aug. 30 deadline, according to Jill Lloyd of the County Fair and Exposition Center.
Lloyd said the nine-member Orange County Fair Board likely will drop plans for the hotel because other developers could be expected to encounter similar financial problems. Instead, she said, the board may seek an arrangement with a nearby hotel.
"We're disappointed because it was an integral part of our master plan," Lloyd said. "We're sorry to see this happen, but TN Properties was very good to work with. . . . No matter who would have been the developer, the problem would be the same.
"Basically, because of the economics, we probably will not even seek another developer," she said. "We may instead join up with an existing hotel and develop a shuttle program."
Lloyd said a major problem facing the developer in dealing with lenders is a glut of hotel capacity already in the area. Another factor is that the site could not be used for collateral against any loans because it is on state-owned property, she said.
The idea for the hotel, which was to be built on a 3.8-acre site at Newport Boulevard and Fair Drive, was first put forward in the board's 1977 master plan in an effort to make the Costa Mesa facility more attractive for trade shows and other events.
Lloyd said TN Properties had spent about $200,000 in planning the hotel, including a $50,000 deposit given to the board in early 1985.
As soon as the firm formally notifies the board of its withdrawal from the project, Lloyd said, the board will refund the deposit.