Coast to See a Wave of Resort-Building

Breakers toss salt into the breeze as a beachcomber eyes a tide pool. A skim-boarder shoots skyward, then plunges into the foam. On this warm fall day, in a Laguna Beach cove with surf-sculpted rock arches and bougainvillea-draped bluffs, just two sunbathers share the sand with the darting seabirds.

In the past, the few visitors here mostly scrambled down from Treasure Island, a bluff-top trailer park looking out to Santa Catalina Island. But in the future, far more visitors will stroll down from the trailer park’s replacement: A 275-room resort hotel, 18 estate homes and 19 condos for the wealthy, with beach trails, scenic overlooks and 70 parking slots for everyone else.

At choice coastal sites from San Diego County to Santa Barbara, four- and five-star resorts will proliferate in the coming decades, along with upgrades of older hotels. At least 14 such projects are in various stages of development in Southern California, motivated by a web of economic, demographic and political factors.

Old classics such as the Hotel del Coronado and the Four Seasons Biltmore in Montecito have been joined by more than a dozen major resorts in recent years, notably a cluster of four-diamond properties in San Diego.

A 1980s boom produced resorts like the Loews Santa Monica Beach Hotel and the Ritz-Carlton Laguna Niguel, before ending in recession and a glut of rooms. But occupancy is again high, especially at expensive hotels.

“The California coast has really been underserved” with high-end resorts, says Los Angeles hotel consultant Bruce Baltin. “There aren’t that many around, and the ones that are have done very well.”

Local governments embrace the resorts for several reasons, not least the taxes they pour into municipal coffers. The projects typically create public parks and beach trails that otherwise would be too expensive to build along the coast.

Even the Coastal Commission, often the bane of development, can become a powerful ally. The agency is an advocate for land uses that allow inlanders to enjoy coastal recreation. Resorts satisfy that requirement so long as developers provide some free or lower-cost beach access to offset the upscale lodgings.

Underlying these factors are the powerful demographics of an aging population and prosperous times. Analysts say millions of baby boomers in their peak earning years are demanding high-end recreation, often several short getaways a year instead of the long summer vacations of their childhoods.

As always, standing between developers and the coastline are powerful and vocal environmental interests such as the Sierra Club, which has been adept at delaying big coastal projects for years.

Indeed, many of these resorts will be constructed over the objections of environmentalists and current beach denizens.

“An awful lot of people who move to these areas to live don’t want to share their beaches,” says Gary Timm, district manager for the Coastal Commission’s Ventura office.

Timm’s district includes Malibu, where wrangling over a proposed upscale hotel on Pacific Coast Highway has gone on since 1985. The developers, who wanted 250 rooms, are mulling over a city counteroffer to allow 100 rooms now and 46 later if the hotel meets civic expectations.

“People always would rather see nothing more developed. And that might be nice,” says Timm. “But there is such a thing as property rights out there, so some development will take place. It becomes a balancing act.”

Sierra Club Stands Against Development

Environmentalists contend that tourism is likely to suffer as continued development destroys the beauty of the coast. The California Coastal Act encourages easy, affordable beach access, not hotels for the super-rich, they say.

“It’s worth much more preserved as open space, beach access or agricultural use,” says Mark Massara, head of coastal programs for the Sierra Club. “If what people want is a Radisson, they can go to Anywhere USA.”

Not surprisingly, most tourism experts strongly disagree.

“Upper-end hotels are the ones that are full. It’s the middle and lower end that are hurting to fill the rooms,” said John Poimiroo, director of the state Division of Tourism. “People want to indulge themselves on vacations, and they’re willing to pay for special experiences.”

Households headed by 45- to 54-year-olds spend far more on recreation than other age groups, notes Mark Zandi of the economic consulting firm Regional Financial Associates. “That’s where the population is now and through the next decade,” he says. “So age favors increased spending on entertainment and tourism.”

New ranks of affluent tourists have been created by Wall Street winnings and rising home prices, further fueling the demand for luxury lodging.

Completing these resorts, however, will not be easy. For now, worries over foreign troubles and a slowing domestic economy have made hotel funding hard to come by, though most experts say that will eventually change.

“Not all of this is going to get built in the next 36 months, and some may not happen in our lifetime,” says Newport Beach hotel broker Donald W. Wise, first vice president of CB Richard Ellis. “But over the next 10 or 15 years, certainly” most of the resorts will be built.

Despite today’s economic troubles in Asia, Russia and elsewhere, foreign travel is expected to increase as well.

“The world is going to have a larger middle class,” says Zandi. “Many of those folks will come to the United States, and many of them will come to the West Coast.”

Many of the new resorts actually are revivals of high-flying 1980s proposals that crashed in the early 1990s, when recession compounded overbuilding from the last big hotelboom. Some already have opened, like the Four Seasons Aviara in Carlsbad. For years, the hotel sat unfinished beside a championship golf course, a skeleton-like symbol of the hotel bust. It finally was completed last August.

Another revived plan, on a Palos Verdes Peninsula bluff where Marineland of the Pacific closed in 1987, shows how pressures combine to encourage luxury resorts.

Jim York, head of the partnership that now owns the site, said he would have been happy to just build houses. But that idea was rejected by Rancho Palos Verdes officials and the California Coastal Commission.

So York hopes to breathe new life into a former developer’s plan that the city and commission approved in 1991. In addition to a 400-room resort hotel and 50 condominium-style suites, the approved complex includes a spa, conference facility, a network of public trails to the rocky beach, and a nine-hole golf course.

But York has a problem, one resulting from the demand for top-flight recreation. A study by PKF Consulting concluded that the project could never find financing with such a small golf course.

“Because this is a somewhat remote location and does not have a white sand beach, we were told it needs to be a golf-oriented conference resort,” York said. “And serious golfers don’t go to a resort to play a nine-hole golf course.”

This week, he plans to make public a bigger, new plan that includes an 18-hole course, asking the city to provide him extra land for it.

Such concessions are commonly made by cities, because of the many benefits a resort brings. Besides producing less traffic and visual pollution than, say, a shopping center, the hotels pay bed taxes that go entirely to the city.

Another example of the changing use of beachfront land is the Treasure Island project in Laguna Beach.

For nearly 20 years, Treasure Island owners got nowhere with plans for all-residential projects. But with a resort as the linchpin, the City Council struck a deal.

Officials estimate the new resort will add $2.2 million to $2.6 million a year to the city’s 1997 bed tax revenue of $2.2 million.

Says Wayne Baglin, a real estate broker and former City Council member in Laguna Beach: “When you go with a nice hotel, dollar signs just light up everyplace.”

Times researchers Sheila Kern and Lois Hooker contributed to this story.