Shea Properties and Olson Development have reached an agreement to build three hotels totaling 480 rooms at Legacy Park, a mixed-use development in Tustin, Calif. As part of this, the partners will be in the market for construction financing, looking for loans from relationship lenders and possibly new financing sources.
Olson, a hotel developer active in California, will build a 180-room full service Kimpton boutique hotel on the site. It will also build two other hotels for which Olson has not named an operator. The hotels are part of a 5.7 million-square-foot, 2,100 unit office and residential project that Shea is developing on the site of a former Marine Corps air station. The project is considered in Los Angeles' John Wayne Airport submarket.
Jack Godard, senior v.p. at Shea, said the partners decided to anchor each end of the main street in Legacy Park with hotels instead of more traditional retail anchors. "It brings a business traveler, a whole different consumer to the area," Godard said. "Legacy Park is not going to be a regional mall-type retail street. It's really a dining and entertainment street, and we believe that the hotel customers are a really critical component to energizing that street," Godard said.
Robert Olson, president of R.D. Olson Development, said the firm has undertaken projects in Burbank and Aliso Viejo in which the hotel functions as a community center. The spec project is in the final stages of entitlement. Godard hopes to break ground in 2009. Both Olson and Gogard said it was too early to determine financing requirements.