Developers at the Anaheim GardenWalk say they need more time to build two additional hotels on the property, which were promised to the city in a previous agreement.
The hotels were agreed to as part of a development agreement for the outdoor shopping and entertainment venue in Anaheim’s resort district – a development agreement gives developers certainty that their project won’t be subject to the whims of planning changes in exchange for benefits to the city.
Part of the agreement includes the construction of three hotels on the site for a total of more than 1,200 rooms. One hotel is already built and open, and the other two were supposed to have started construction by now.
The developer for the second hotel told the City Council in a letter that they propose to start construction by November 2025 and have it open by May 2028. It was supposed to have started construction last November and be opened by 2026.
The pandemic delayed construction and now financing costs for the second hotel “have more than doubled beyond our original underwriting,” further delaying their plans, the developer’s letter says.
The third hotel is a planned timeshare that Westgate Resorts must build. Westgate Resorts is requesting that construction start by April 2025, with completion expected two years later. The company says there has been challenges since the pandemic of meeting hotel brands’ standards and getting buy in for “new and innovative buildings types.”
The developer previously obtained a building permit from the city, but construction never began. That timeshare was required to be opened by December.
The 399-unit timeshare is set to be located above the mall’s parking garage. The second hotel is planned at the corner of West Disney Way and South Clementine Street, where an empty lot is now.
The first hotel, the JW Marriott, Anaheim Resort opened in 2020 with 466 rooms.
The Anaheim GardenWalk has faced several challenges in the 15 years it’s been open. The outdoor mall, which features shopping, dining, a movie theater, bowling alley and the House of Blues, opened during the Great Recession. It has changed ownership multiple times, most recently STC Management took over in 2018, but the development agreement is with the hotel developers.
The development agreement was first signed in 1999 and has been amended several times since.
City staffers are recommending the City Council approve the extensions at its meeting tonight, March 26.
Should the council not want to give an extension, city spokesperson Mike Lyster said the main remedy for the city would be to find the developers in default of the agreement and seek to cancel it.
The development agreement stipulates that the city would be entitled to damages.
Source: Orange County Register
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