Oceanside- Master Planned Beachfront Resort Breaks Ground

Kimberly Heaton

The future Oceanside Beachfront Resort (Project) broke ground in February 2019.  The Project will consist of two hotels, developed by S.D. Malkin Properties, and operated by Joie de Vivre and Destination Hotels. After years of planning efforts, the Project will be the largest newly constructed development on the San Diego County coast in over two decades. 

Located at the base of the historic Oceanside Pier, the Project will be built on a two-block, 2.75-acre site.  The site is a short distance from the Oceanside Amtrak station, offering direct and easy access for visitors.  The northern block will contain the Joie de Vivre Hotel and will include 160 rooms, a ground level restaurant, coffee house, cafe/market and rooftop pool.  It will also feature 3,000 SF of street level retail and offer outside event space and a public garden.  The southern block will contain the Destination Hotels Resort and will include 226 rooms and suites, an indoor/outdoor lounge, signature restaurant, luxury spa, event space, and a 9,000 SF pool deck.  Both hotels are planned to contain multiple restaurants and bars, along with a total of 22,000 SF of interior meeting and function space.

It is anticipated that the Project will incur extraordinary costs as a result of the construction of its highly amenitized facilities.  These extraordinary costs require public subsidy to ensure the financial feasibility of the Project.  To fund these costs, the Developer requested financial assistance from the City in the form of a land write-down and Transient Occupancy Tax (TOT) revenues generated by the Project.  As a result, the Developer and City's Successor Agency entered into a TOT Sharing Agreement.  Under its terms, the Developer will receive 100% of the Project's TOT revenues during the first three years of operation for each hotel, with varying levels of sharing for the remainder of the Agreement term.  The City will also subsidize off-site mitigation costs and offer Development Impact Fee credits, for a total public subsidy of $13.69 million. 

This Project is anticipated to solidify what has been referred to as the renaissance of Downtown Oceanside as it continues to experience significant growth and redevelopment.  The Beachfront Resort, expected to open in 2020, will help the City generate additional revenues while meeting economic development goals and objectives, including:

  • Increasing tourism market share and marketing Oceanside as a tourist destination,
  • Creating new quality jobs through business retention and attracting new prospective businesses,
  • Assisting new prospective retail stores and restaurants,
  • Enhancing the aesthetics of the Downtown district,
  • Providing pedestrian connectivity with the surrounding streets,
  • Implementing a development that is consistent with the City's Nine Block Pier Area Master Plan and Local Coastal Program

KMA assisted the City through the course of predevelopment planning, developer selections, and negotiations for the Project.  KMA roles included financial evaluation of developer responses to the original Request for Proposals; financial feasibility analyses of successive development proposals from the selected developer, assistance in negotiating business terms, and documentation of the public subsidy through a Health and Safety Code Section 33433 Summary Report, and Government Code Section 53083 Economic Development Subsidy Report.