City gets deadline for Dunes purchase

June Casagrande

NEWPORT BEACH -- Newport Dunes Waterfront Resort owners have given the

city less than three weeks to make an offer on the property -- a time

frame unrealistic enough that some officials are wondering if the company

really wants to sell the property to the city.

In a study session Tuesday, representatives of Evans Hotels of San

Diego gave the city until Oct. 15 to bid on the resort’s lease. City

officials have been considering whether to buy the lease on the 100-acre

site, in part to prevent a hotel from being built there.

At their Tuesday meeting, council members planned to discuss putting

together a committee to study the possibility of taking over the lease.

But the deadline stopped them in their tracks. The council instead

decided to wait until after Oct. 15 to revisit the issue.

“I’m disappointed about the Oct. 15 deadline,” City Manager Homer

Bludau said. “We would certainly need a lot more time to put together an

offer.”

Both Bludau and Councilman Steven Bromberg speculated that the

developer might have another offer on the property.

“I’m not convinced this was ever a real deal,” Bromberg said. “We

couldn’t even buy a vacant lot in that time.”

A representative of Evans Hotels said the deadline had nothing to do

with any other offers the company may have received.

Steve McKenzie of the real estate investment firm Eastdil, which is

representing Evans in the transaction, said the bid period was more than

reasonable. He said bids often are accepted for about four to six weeks.

By Oct. 15, bidders will have had about eight weeks to make offers on the

Dunes.

“The city was welcome from the beginning of the process to

participate, and continues to be welcome,” McKenzie said. “The city may

not be able to move at the same pace as private investors.”

McKenzie did not disclose details about bidders or a possible selling

price for the lease.

City officials are quick to acknowledge that, as a private company,

Evans has the right to stop accepting offers at any time. If the company

is still taking bids after Oct. 15, the city likely will ask for six

months to crunch the numbers and make an offer.

Preliminary estimates by the city showed the cost of the lease between

$25 million and $50 million -- a price tag so high that the city couldn’t

pay it off with revenues from the marina, RV park and restaurant now on

the property. Officials announced last week they would begin studying the

issue, including whether to issue a bond to make up the difference.

In July, Evans representatives said they wanted to sell their lease on

the property.

Quinn, whose father-in-law, William Evans, entered a lease for the

state-owned land with Orange County in 1972, said the main reason for

selling the lease was to focus on the company’s San Diego businesses.

The announcement did come after the passage of the city’s slow-growth

Greenlight initiative, which appeared to spell doom for a 470-room

resort planned for the site.

Greenlight requires voter approval for developments large enough to

require an amendment to the city’s general plan.

The site is already approved for a 275-room family-style hotel under

terms of the original deal with the county.

Evans Hotels had been seeking approval for the 581,000-square-foot,

470-room resort and conference center. The plan met with significant

opposition from community members concerned with the traffic and other

problems the large resort would create.

Anyone who buys the lease, which is good through 2039, would be able

to build the smaller hotel. The only way the city could stop that

development is by taking over the property.

-- June Casagrande covers Newport Beach. She may be reached at (949)

574-4232 or by e-mail at o7 [email protected] .