DATE: May 9, 2023
SUBJECT:
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ADOPT AN ORDINANCE GRANTING AMENDMENT NO. 1 TO AN OPTION TO LEASE AGREEMENT WITH SUNROAD HIE HOTEL PARTNERS, L.P. FOR A 66-YEAR LEASE TO DEVELOP AN UP TO 450-ROOM HOTEL ON HARBOR ISLAND TO EXTEND THE TERM OF THE OPTION
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EXECUTIVE SUMMARY:
Sunroad HIE Hotel Partners, L.P. (Sunroad) is proposing the development of the Sunroad Harbor Island East Hotel, which would involve demolition of the existing improvements within the project site, site preparation, and construction, including: grading, development, operation and maintenance of an up to 450-room hotel structure and associated amenities including a walk-up restaurant and bar area, swimming pool, jacuzzi spa, retail space, conference space, parking lot(s), waterfront promenade and landscaping (Project). The Project is located at the northeast corner of Harbor Island Drive and East Harbor Island Drive, consisting of two parcels totaling approximately 7.55 acres (Project Site).
On July 21, 2021, Sunroad entered into an Option to Lease Agreement (Option) with the San Diego Unified Port District (District) for the redevelopment of approximately 7.55 acres in East Harbor Island commonly referred to as the "Elbow Parcel" (Attachment A - Location Map). The Option, which includes and attaches a 66-year ground lease, (Lease), to be executed and effective after (1) Sunroad's satisfaction of all conditions precedent specified in the Option and (2) Sunroad's exercise of the Option. The Option had a term of two years which currently expires on May 31, 2023 and the conditions precedent are intended to ensure that upon exercise of the Option, Sunroad will be ready to commence construction. Sunroad has been diligently working on its deliverables under the option agreement.
At the November 9, 2021 Board meeting, the Board adopted a resolution (BPC Resolution No. 2021-144) authorizing the issuance of an appealable Coastal Development Permit (CDP) for the Project, and the CDP (CDP-2021...
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