Glut of Rooms Feared From Construction Boom : Hilton Scaling Down Plans for L.B. Hotel Tower

LONG BEACH —  A potential glut of hotel rooms here has prompted owners of the Queensway Bay Hilton Hotel to alter expansion plans that had called for construction of the city’s tallest building.

Under a revised plan still being refined, the height of a proposed 37-story, 385-foot triangular tower at the Hilton would be cut sharply, and a 355-room expansion would be completed in stages, hotel co-owner J. Jay Feinberg said.

The new plan calls for construction of at least one five-story, 50-room cluster, much like four at the existing 200-room Hilton, Feinberg said.

“We plan to come in with one or two or three of those (clusters) and then build the tower,” Feinberg said. “That mix of clusters and tower gives us a lot more flexibility in being responsive to the marketplace. . . . With one building you have to do it all at one time or nothing.”

The total number of rooms in the expansion would be 355, with the height of the tower dependent upon how many of the 50-room clusters are built first, Feinberg said.

Other elements of the expansion project would eventually be completed as proposed, he said. The project will include an 11-room, 49,000-square-foot convention center, 42,000 square feet of offices, three restaurants and two parking garages for 1,344 cars.

Option on Seven-Acre Site

Feinberg said he still intends to break ground on the first stage of the $50-million project in January, as required by the city to retain his option to develop the seven-acre parcel northwest of the Queen Mary and next to the existing Hilton. He said financing is not a problem.

“I think all (the city) is concerned about is that we meet the minimum of 200 new rooms,” said Feinberg. “I think their main concern is just to get the property developed.”

Feinberg has leased the parcel since he built the original Hilton in 1975, and has submitted and withdrawn several construction proposals, he said.

Byron Buck, project coordinator for the Long Beach Harbor Department, within whose boundaries the property is located, said it appears to be “put up or shut up” time for the Hilton expansion.

“This one’s been in the works for over seven years in one form or another . . . ,” said Buck, “and the feeling of the (Harbor Commission) has been, ‘Let’s get this project going.’ They didn’t want any more delays.”

10 Major Hotel Projects

Feinberg said he has been forced to rework his expansion plan because of a construction boom that promises to produce 10 new downtown hotels or major hotel additions this decade. If all of the planned rooms were built, their number here would more than double from 2,650 by 1990.

With completion of the 380-room Ramada Renaissance Hotel next summer, the downtown will have its third new hotel since 1980. A 235-room Holiday Inn opened in 1980 and the 521-room Hyatt Regency was completed on the oceanfront in mid-1983. Ground breaking for a fourth hotel, a 500-room Sheraton across from the Convention Center, has been set for next March, although a pending lawsuit might cause a delay.

Local hotels in general, fed by a booming tourist and convention business, have had above-average occupancy rates.

But it won’t be long before the limited capacity of this city’s modest-sized Convention Center will be reached, said Feinberg. And, even though the city is now studying an expansion plan for that center, Feinberg said he is concerned Long Beach could end up like Seattle and New Orleans. Both cities have seen their hotels’ high occupancy rates of a few years ago drop sharply after a building boom, he said.

“I don’t think Long Beach has any magic that makes it immune to overbuilding,” said Feinberg.

“The market here has changed radically several times in the last 10 years,” he said. “It’s gone from a dead town where everybody thought we were crazy to build . . . to a hot market. And now everybody thinks it’s an overbuilt market.”