A developer has submitted plans to demolish the Anaheim Plaza Hotel & Suites and build a luxury hotel on the site – the first to take advantage of a citywide subsidy that would help pay for the project.
Good Hope International, an affiliate of the Wincome Group, could start construction next year on a 580-room hotel standing more than 78 feet tall, with 25,600 square feet of retail and 50,000 square feet of meeting space.
While the luxury brand has not been announced, the proposed hotel would be built on 8.8 acres of land near Harbor Boulevard and Disney Way and open sometime in 2018, according to a development plan delivered Tuesday to Anaheim’s Planning Department.
It would cost more than $160 million to build the hotel, financed in large part by a 70 percent return on bed taxes collected there over 20 years under a relatively new economic incentive aimed at encouraging developers to build hotels that meet AAA’s guidelines for four-diamond ratings.
At the end of the agreement, the city would collect 100 percent of the bed taxes generated by the hotel.
“We believe the market is ready for another four-diamond hotel in Anaheim,” said Paul Sanford, asset manager for the Wincome Group, which also owns the Anabella Hotel in Anaheim and the Avenue of the Arts Hotel in Costa Mesa.
“We’re seeing higher-end conventioneers and higher-end leisure tourists with the expansions going on at the Convention Center and at Disneyland,” Sanford said. “We think it will contribute to the higher-spending demographics of people wanting to stay and spend in the area.”
Anaheim’s Planning Commission could consider approving the project as soon as spring; the City Council must give final approval.
It’s unknown what the new luxury hotel would charge for rooms, but hotel taxes are expected to generate $7 million during the first year, rising to $13 million in 2038, city officials said.
Hotel taxes are projected at $133 million through the current fiscal year, accounting for nearly half of Anaheim’s revenue.
The luxury hotel would be built on the site of the 300-room Anaheim Plaza Hotel & Suites, which opened in 1960 as the Charterhouse Hotel. The property went through several names changes and owners until the Wincome Group purchased the property for $47 million in November 2014.
Sanford said that Wincome executives are studying when to close the hotel to make way for the luxury resort. The Anaheim Plaza’s general manager did not return a phone call seeking comment.
While the hotel developer will get 70 percent of the bed taxes over the next 20 years, another 20 percent will help cover massive improvements made to Anaheim’s resort area in 1996, with the remaining 10 percent going to Anaheim’s coffers.
For now, the Disneyland Hotel and Disney’s Grand Californian Hotel & Spa are the only hotels in Anaheim that meet AAA’s four-diamond rating. However, a similar incentive is being used to build a new JW Marriott Hotel just a block away at the GardenWalk mall, under a deal struck in 2013.
Santa Ana, which has no hotels that are four- or five-star rated or AAA four diamonds or above, is considering a 50 percent bed-tax subsidy, lasting up to 15 years for potential developers. The Santa Ana City Council on Tuesday delayed a decision until next month.
Back in Anaheim, city officials are negotiating similar deals with several other developers who have signaled interest in building luxury hotels in Anaheim.
“This is evidence that we’re going to be able to raise the profile of the hospitality industry in the resort area,” said John Woodhead, Anaheim’s community development director.
“This goes a long way toward establishing a viable and robust four-diamond hotel market in Anaheim,” Woodhead said. “We’re thrilled to see this type of development on the horizon.”