Redondo Beach will see three hotels constructed in the future—the Shade Hotel in King Harbor, and a Marriott Residence Inn and Hilton Garden Inn in North Redondo Beach—the city council determined Nov. 6 when it approved an amended lease agreement for one and a financing deal for the others.
Under an amended lease agreement approved last week, the Shade Hotel will now have 54 rooms, instead of the originally planned 45. The rent will be increased from $13,000 to $17,000 per month to cover the cost of using parking spaces on city property.
The lease had to be amended due to issues with constructing an underground parking garage at the site.
The $20 million project must begin demolition in February and be completed by Oct. 1, 2014. Each month past the October deadline will cost developer Mike Zislis $25,000.
Originally, Zislis told local media that he planned to demolish the building—known as the old Red Onion restaurant—on North Harbor Drive in September 2012.
The site's original lease was approved in 2008; the Harbor Commission approved the project in 2011.
The two hotels in North Redondo Beach will be constructed on the vacant lot that formerly held the Malibu Castle on Marine Avenue.
Preliminary plans call for the hotels to be two stories high and have a 200,000-square-foot footprint. Between the two facilities, there will be about 320 rooms, as well as conference facilities.
Once built, the hotels are expected to bring in about $2 million annually in taxes for the city; however, under the terms of the financing agreement, the city probably won't see that revenue for several years. The first $8.5 million will be placed in a separate fund to provide a debt service guarantee.
The project was initially approved in 2010, but ran into financial difficulties with the economic downturn.