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California and the West

Coast to See a Wave of Resort-Building

Development: Economic and demographic factors smooth the way for high-end projects, despite environmentalists' concerns.


Breakers toss salt into the breeze as a beachcomber eyes a tide pool. A skim-boarder shoots skyward, then plunges into the foam. On this warm fall day, in a Laguna Beach cove with surf-sculpted rock arches and bougainvillea-draped bluffs, just two sunbathers share the sand with the darting seabirds.

In the past, the few visitors here mostly scrambled down from Treasure Island, a bluff-top trailer park looking out to Santa Catalina Island. But in the future, far more visitors will stroll down from the trailer park's replacement: A 275-room resort hotel, 18 estate homes and 19 condos for the wealthy, with beach trails, scenic overlooks and 70 parking slots for everyone else.

At choice coastal sites from San Diego County to Santa Barbara, four- and five-star resorts will proliferate in the coming decades, along with upgrades of older hotels. At least 14 such projects are in various stages of development in Southern California, motivated by a web of economic, demographic and political factors.

Old classics such as the Hotel del Coronado and the Four Seasons Biltmore in Montecito have been joined by more than a dozen major resorts in recent years, notably a cluster of four-diamond properties in San Diego.

A 1980s boom produced resorts like the Loews Santa Monica Beach Hotel and the Ritz-Carlton Laguna Niguel, before ending in recession and a glut of rooms. But occupancy is again high, especially at expensive hotels.

"The California coast has really been underserved" with high-end resorts, says Los Angeles hotel consultant Bruce Baltin. "There aren't that many around, and the ones that are have done very well."

Local governments embrace the resorts for several reasons, not least the taxes they pour into municipal coffers. The projects typically create public parks and beach trails that otherwise would be too expensive to build along the coast.

Even the Coastal Commission, often the bane of development, can become a powerful ally. The agency is an advocate for land uses that allow inlanders to enjoy coastal recreation. Resorts satisfy that requirement so long as developers provide some free or lower-cost beach access to offset the upscale lodgings.

Underlying these factors are the powerful demographics of an aging population and prosperous times. Analysts say millions of baby boomers in their peak earning years are demanding high-end recreation, often several short getaways a year instead of the long summer vacations of their childhoods.

As always, standing between developers and the coastline are powerful and vocal environmental interests such as the Sierra Club, which has been adept at delaying big coastal projects for years.

Indeed, many of these resorts will be constructed over the objections of environmentalists and current beach denizens.

"An awful lot of people who move to these areas to live don't want to share their beaches," says Gary Timm, district manager for the Coastal Commission's Ventura office.

Timm's district includes Malibu, where wrangling over a proposed upscale hotel on Pacific Coast Highway has gone on since 1985. The developers, who wanted 250 rooms, are mulling over a city counteroffer to allow 100 rooms now and 46 later if the hotel meets civic expectations.

"People always would rather see nothing more developed. And that might be nice," says Timm. "But there is such a thing as property rights out there, so some development will take place. It becomes a balancing act."

Sierra Club Stands Against Development

Environmentalists contend that tourism is likely to suffer as continued development destroys the beauty of the coast. The California Coastal Act encourages easy, affordable beach access, not hotels for the super-rich, they say.

"It's worth much more preserved as open space, beach access or agricultural use," says Mark Massara, head of coastal programs for the Sierra Club. "If what people want is a Radisson, they can go to Anywhere USA."

Not surprisingly, most tourism experts strongly disagree.

"Upper-end hotels are the ones that are full. It's the middle and lower end that are hurting to fill the rooms," said John Poimiroo, director of the state Division of Tourism. "People want to indulge themselves on vacations, and they're willing to pay for special experiences."

Households headed by 45- to 54-year-olds spend far more on recreation than other age groups, notes Mark Zandi of the economic consulting firm Regional Financial Associates. "That's where the population is now and through the next decade," he says. "So age favors increased spending on entertainment and tourism."

New ranks of affluent tourists have been created by Wall Street winnings and rising home prices, further fueling the demand for luxury lodging.

Completing these resorts, however, will not be easy. For now, worries over foreign troubles and a slowing domestic economy have made hotel funding hard to come by, though most experts say that will eventually change.

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