Original Content Sources, San Diego Union Tribune
Two years after selling off much of its 12-acre site downtown, Manchester Financial Group will soon submit plans for a 1,150-room hotel near Broadway and Pacific Highway
Developer Doug Manchester, who is responsible for building San Diego’s single biggest hotel, is close to submitting plans for a new 36-story, 1,150-room hotel tower that would be located just a block from the downtown waterfront.
While a large convention hotel was always destined for what is a Navy-owned site going back more than 30 years ago, it was only in the last few years that the Manchester Financial Group began working on — and designing — the current $550 million project.
t big hotel development undertaken by the 80-year-old Manchester, says Ted Eldredge, president of the financial group. Manchester developed the 1,628-room Manchester Grand Hyatt near the city’s Bayfront convention center, as well as the Fairmont Grand Del Mar in Carmel Valley. He no longer owns either one.
What remains a big unknown is whether Manchester Financial will be able to secure financing and an equity partner in the current economic environment of rapidly escalating interest rates and construction costs.
“The question is what kind of terms can I get?” Eldredge said. “Right now the financial markets aren’t favorable, and when interest rates go up a quarter of a point on a project of this size, that’s a lot of money. Material costs are also up, so it will be a challenge. If I can’t get the financing I want, I’ll have to wait a little bit.
“We will probably need an equity partner as well as a lender but I think it’s worth it. There’s a lot of pent-up money out there.”
The near-term plan, Eldredge said, is to submit plans to the city of San Diego some time in November for the purpose of eventually obtaining building permits. If Manchester Financial Group is successful in securing financing next year, the hotel could potentially be under construction by the very end of 2023 or early 2024, Eldredge estimates.
He expects that construction would take about 30 months. Manchester Financial is currently in talks with a luxury hotel chain to operate the property, he added.
The nearly two-acre hotel parcel represents the last remaining property that Manchester controls out of the original 12-acre site that his company entitled years ago as a mega mixed-use development, formerly known as the Navy Broadway Complex located south of Broadway between Pacific Highway and Harbor Drive. Two years ago, IQHQ real estate investment group purchased the bulk of Manchester’s leasehold as part of its plan to build a $1.6 billion life science city on the bay that it’s calling the San Diego Research and Development District. It also is building a long-planned 1.5-acre public park adjoining the hotel site.
Given the location of the hotel — near the water with bay views — and San Diego’s strong rebound from the pandemic, Eldredge believes there will be no shortage of demand for more than a thousand new hotel rooms. While the long-planned expansion of the convention center remains a big question mark, Eldredge said the business plan for the new hotel relies more on in-house meetings business, which generates significant food and beverage revenue. The design of the hotel calls for 100,000 square feet of meeting and event space.