With Opening of Beachfront Resort, Oceanside's Tourism Bonafides are Solidified

Author: 
Kimberly Heaton

The Oceanside Beachfront Resort officially opened in May 2021, putting a stamp on the City's reputation as a tourism destination.  The Project consists of two adjacent hotels, both developed by S.D. Malkin Properties, and operated by Joie de Vivre and Destination Hotels, respectively. After years of planning, construction, and Covid-19 delays, the Project is now open and is the largest newly constructed oceanfront development on the San Diego County coast in fifty years. 

Located at the base of the historic Oceanside Pier, the Project was 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 contains the Mission Pacific Hotel (Joie de Vivre) and includes 160 rooms, a ground level restaurant, coffee house, cafe/market and rooftop pool.  It also features 3,000 SF of street level retail and offers outside event space and a public garden.  The southern block contains the Seabird Resort (Destination Hotels) and includes 226 rooms and suites, an indoor/outdoor lounge, signature restaurant, luxury spa, event space, and a 9,000 SF pool deck.  Both hotels contain multiple restaurants and bars, along with a total of 22,000 SF of interior meeting and function space.

Because of the Project's highly amenitized facilities, the Project incurred extraordinary costs, which required a 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 also subsidized off-site mitigation costs and offered Development Impact Fee credits, for a total public subsidy of $13.69 million. 

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.

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 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