By Matthew A. Peterson, Esq. 

 Hotel development activity in San Diego is at an all time high. The overwhelming interest covers the full gamut including five-star and convention-oriented hotels, executive suite/extended stay, economy hotels and motels. With occupancy rates at an all time high, the race is on to fill the void with low, mid, and high-priced accommodations. 

  The activity in Downtown San Diego is overwhelming. Our law firm is involved with Manchester Resorts and its proposed expansion of the Hyatt Hotel (750-850 keys), and Pacific Gateway, Ltd.'s proposed expansion of the Marriott Hotel (550-650 keys). Both projects are adjacent to the Convention Center. There is also a hotel proposal for the Campbell Ship Yard site at the foot of Eighth Ave. (approximately 1,000 keys). The planned downtown ballpark's approval has spurred the proposal for another hotel in the ballpark's vicinity. In addition, Centre City Development Corporation ("CCDC") and the City of San Diego have recently approved the "Bridge works" project which involves a 253-room mid-rise Hilton Garden Hotel at the foot of Fifth Ave. across the street from the Convention Center. A Ritz Carlton Hotel is also in the planning stages near the San Diego International Airport. In addition to these multi-million dollar projects, there is a tremendous amount of activity both in rehabilitating existing hotels and with the construction of "executive suite" and "extended stay" hotels in Downtown San Diego and in the outlying areas. Most of the executive suite proposals appear to be focused on freeway corridors and adjacent to industrial and high-tech campuses in the northerly portion of the City. 

  Most, if not all of these projects, require the processing of various discretionary approvals through the City of San Diego, the Port District, and other governmental agencies such as the County of San Diego and the California Coastal Commission. For example, if a hotel development were proposed for the Downtown area, the project would be processed through the CCDC and ultimately receive the approval of a Centre City Planned District Ordinance ("PDO") Permit. The PDO contains a variety of developmental standards including limitations on size, design, parking, and signage. There are also height limits because portions of the Downtown area are within the Airport Approach Overlay Zones. If a particular hotel project was located within the Coastal Zone, then in addition to other permits that may be required, a Coastal Development Permit would also be required. Coastal issues usually involve height and massing (i.e., is the project going to be compatible with the surrounding neighborhood), and coastal, pedestrian, vehicular, and visual access issues.

  Throughout the City of San Diego, there are a variety of overlay zones which add another layer of regulation. The Hillside Review Overlay Zone is intended to protect, limit and restrict development within hillside areas. The Resource Protection Overlay Zone is intended to protect environmental resources. The Airport Approach Overlay Zone is intended to limit development within the approach and flight zones of airports and also requires mitigation for noise impacts associated with airplane and airport operations. The Community Plan Implementation Overlay Zones contain special design standards to meet the goals and objectives of the particular community that the project is located. The Sensitive Coastal Resource Zone affects properties immediately adjacent to the ocean and is intended to protect the sensitive coastal areas.

  Finally, as with any project which requires discretionary approvals, some level of environmental review is required to: 1) identify the potential for significant impacts on the environment; and 2) identify either project modifications or mitigation measures to reduce or lessen these anticipated impacts. Environmental review can involve an environmental exemption, a negative declaration, a mitigated negative declaration, or a full-blown environmental impact report. In general, the environmental review process establishes the critical time line in processing discretionary permits and approvals.

  Our firm has been involved with both simple projects and with hotel development projects that require complex processing, including General Plan, Community Plan, Specific Plan, and Master Plan approval and/or amendments, rezonings, and map processing, with all associated discretionary permits and approvals. In general, permits and approvals can take anywhere between four and six months to process. The more complex projects can take up to a year or longer. While the processing of various permits and approvals in San Diego has improved over the years, most projects still require a highly specialized and experienced development team in order to get the job done in a timely manner.

Mr. Peterson, is a Partner with the law firm of Peterson & Price, APC headquartered in Downtown San Diego. Mr. Peterson's practice specializes in land use, real property, redevelopment, environmental, coastal and port development permitting law and litigation. He has served as an Expert Witness in complex litigation involving land use and real estate matters. His practice emphasizes Municipal and Governmental advocacy including permitting and processing of discretionary and administrative permits, subdivisions, approvals and property development entitlements.