Thursday June 15, 2000 - San Diego
A battle that was simmering just beneath the surface between Manchester Resorts and San Diego Padres owner John
Moores over control of a San Diego bayfront hotel site has reached the boiling point, but the stew is still uncooked.
Any doubt that Moores wants to wrest control of the Campbell Shipyard site away from Manchester evaporated this
week with the filing of a complaint by Moores' JMI Realty against the Port of San Diego.
That complaint was filed with the Port and may be a precursor to a lawsuit. It alleged that the Port breached a
contract agreement when it awarded the 1,200-room hotel project to Manchester. The complaint said the Port was
supposed begin negotiations with JMI in June of last year at about the same time it was giving control of the property
to Manchester.
"JMI Realty tried to get this a year ago," said Larry Lucchino, Padres president. "We just want
to be sure that hotel happens."
Lucchino then said the decision by the Port to go with Manchester was "a highly dubious one."
Port attorney David Chapman declined to go into details, except to argue that the Port acted entirely appropriately
when it awarded the contract to Manchester.
The filing of the complaint is just the latest event in a multichaptered saga that includes Manchester, the Port,
Moores and the downtown ballpark.
Earlier this month, Manchester said it didn't have the financing in place for the $273 million, 750-room Hyatt
Hotel expansion. Manchester officials blamed higher interest rates, the higher cost of financing and the lender
requiring too much equity in that project.
Some hotel analysts have said Wall Street is afraid to bankroll projects right now.
Kip Howard, formerly of Manchester, was the first to attempt to get a hotel built on the Campbell Shipyard property.
Howard announced that Westin would operate the hotel and that Tishman West would be bankrolling the project. At
what seemed like the last minute, the financing fell through and Manchester stepped in to do the project.
The Hyatt expansion, meanwhile, is very much in limbo. The Port announced an offer of $14 million to help Manchester
get that project going, but the developer said it wasn't enough. Both Manchester and the Port have pledged they
will build the Hyatt and the Campbell hotels.
The uncertainty surrounding the Campbell Shipyard hotel and Hyatt expansion also has clouded the future of the
downtown ballpark.
The transient occupancy tax from the two hotels was supposed to help fund the new ballpark. Now the Padres, realizing
that with ongoing litigation and hotel problems the $299 million in ballpark bonds can't be sold, are asking for
about $22 million in bridge financing to get construction started. Councilwoman Christine Kehoe, for one, isn't
prepared to give it to them.
"I think we're in an indefinite holding pattern on the ballpark, " Kehoe said. "There is no talk
about interim financing ... This whole thing is sinking like a stone."