Low Hanging Fruit… Is the Southern California Market Ripe for Hotel Development?
Southern California, especially Los Angeles County, is one of the largest Hospitality
markets in the United States. A revitalized Downtown Los Angeles, with one of the
nation’s largest international airports, and a diverse economy of business,
entertainment, international trade, media, fashion, science, technology and education,
has contributed to a strong demand for lodging. Experts look to attract as many as 4,000
additional hotel rooms over the next several years.
Our distinguished panel will share their thoughts regarding recent trends and strategies
for on-going and future hotel development.
Moderator: Tom S. Ito, AIA, LEED AP, Principal: Gensler
Featured Speakers
Bruce Baltin, Senior VP:
KPF
Sonnet Hui, Executive Project Director:
Hazens Real Estate Group
Darrell Long, Design Director, Partner:
HBA
Bob Sonnenblick, Principal: Sonnenblick Development LLC
Donald Wen, Director:
North America Development Starwood Hotels and Resorts
24 million hotel will have 135-room capacity
By Leticia Ordaz
8:36 PM PST Jan 27, 2015
SACRAMENTO, Calif. (KCRA) —The Sacramento County Board of Supervisors voted 5-0 on Tuesday to approve a planned $24 million hotel at the Sacramento International Airport — and it’s expected to bring hundreds of new jobs to the region.
The hotel will be funded by a developer who is planning on building a five-story, 135-room Hyatt Place.
Los Angeles-based Sonnenblick Development is proposing to put a Hyatt hotel in a grassy area next to a parking garage, an open space between the airport’s two terminals.
“(It will be) very easily accessible from Terminal A and Terminal B,” said Robert Sonnenblick, with Sonneblick Development. “You fall out of baggage claim right into our lobby.”
The project will start this spring and generate about 300 construction jobs in the next two years.
Airport travelers are excited already.
“It’s a good thing for Sacramento,” Sydney Dawes said Tuesday. “Growth is great.”
An existing hotel was torn down more than six years ago to make room for the new Terminal B. The recession stopped plans for a new hotel at that time.
The economic revival doesn’t stop with the hotel.
Construction crews got an early start Tuesday morning at Bonney Field, the home of Sacramento Republic FC. The team is spending $1.6 million of its own money to expand the stadium’s seating from holding about 8,000 to now 11,000 fans at the Cal Expo site.
The project will send a strong message to Major League Soccer, a Sac Republic spokeswoman said.
“To show them that we can grow to a threshold of 11,000 — and then maybe as high as 14,000 in the future — (it) really shows that there is a demand and a market here in Sacramento,” Erika Bjork told KCRA 3.
Sacramento is among the cities in the running for MLS’s 24th and final franchise. Officials expect the league to make an announcement on expansion plans by June.
“We’re standing where we’ll probably have about 4,000 to 4,500 additional seating in the bleacher section — our most ardent and passionate supporters — our supporters including Tower Bridge Battalion,” said Bjork while showing KCRA 3 around on Tuesday.
Macy’s will also receive tax incentives to set up a warehouse at the former Campbell’s site. The online distribution center for wedding gifts and other goods will generate as many as 350 jobs.
“The warehousing jobs usually average $15 to $20 an hour, which is competitive for our area,” said Troy Givans, the Sacramento County director of economic development.
The worksite for the newly renamed Capital Commerce Center will become a magnet for new jobs.
Tony Bizjak | The Sacramento Bee | January 28, 2015 3:26pm
Jan. 27–Travelers to and from Sacramento International Airport soon will have a place to stay overnight on airport property, although not as grand as once planned.
Sacramento County supervisors Tuesday morning approved a new five-story airport business hotel, seven years after tearing down a smaller one.
The county will team with developer Sonnenblick Industries LLC to construct a 135-room Hyatt Place within walking distance of both airport terminals. The hotel will include an indoor pool and spa, fitness room, dining area and 3,500 square feet of meeting space.
Sonnenblick, a Southern California developer, has built hotels adjacent to medical facilities, but company principal Bob Sonnenblick said this is the first of what he hopes will be several airport hotels his company will develop in the next few years.
The hotel will sit on a triangle of grass adjacent to the north side of the parking garage between the airport’s two terminals. Sonnenblick and airport officials say the hotel will be a major amenity for travelers from around Northern California who want to stay overnight before an early morning flight. The hotel also likely will serve business people and those visiting the Capitol on business.
Sonnenblick said the location on airport grounds should allow his company to charge a premium room rate. He estimated an average night at the hotel would cost $150.
“The advantage we have is that the costumer does not have to get into a minivan and drive 10 to 15 minutes each way to stay at a hotel,” he said. “Our hotel, you literally walk out of baggage claim and into our front door.”
The hotel represents a success for airport officials, who are trying to add amenities and promote their facility as a premier Northern California airport. It is a comedown, though, from what airport officials planned a few years ago. Originally, the new hotel was to be a high-rise built directly on top of the new Terminal B, allowing hotel guests to go from room to plane without stepping outside. The hotel’s lobby would have opened directly onto the terminal ticketing area.
But that plan proved too costly, and was shelved during airport construction. Sonnenblick later explored the possibility of building two hotels elsewhere on airport grounds, one upscale with extensive meeting and ballroom space, the other more modest. Marketing studies, however, determined the upscale hotel would not pencil out, he said.
The proposed hotel will, however, be larger and better appointed than the former Host Airport Hotel, he said. “We are going to build this beautifully.”
The project has been delayed by a flood-related federal moratorium on most new construction in the Natomas basin. But those restrictions are expected to be removed in May or June, and Sonnenblick said his company will be ready immediately to submit project plans to the county for approval.
Sonnenblick expects to spend about $24 million building the hotel, which is expected to open in late 2017.
The developer will pay the airport a one-time fee of $2.46 million for use of 164 ground-floor spaces in the parking garage for guest parking. Sonnenblick will also pay the airport a minimum of $900,000 in total rent across the first four years: $150,000 annually in the first two years and $300,000 annually in the next two years. Thereafter, rent payments will be based on a percentage of hotel gross revenue, estimated at $475,000 in the fifth year.
Sonnenblick has told the county it intends to enter into a “labor harmony agreement” with UNITE HERE Hotel & Restaurant Employee Union Local 49 when hiring workers to operate the hotel, according to a staff report.
Call The Bee’s Tony Bizjak, (916) 321-1059. Bee editor Kevin Yamamura contributed to this report.
5-Story Hotel Approved For Sacramento International Airport
A rendering of the proposed hotel. (Credit: Sonnenblick Development LLC)
5-Story Hotel Approved For Sacramento International Airport
January 27, 2015 1:13 PM
SACRAMENTO (CBS13) – Work will go forward on a hotel at the Sacramento International Airport after Sacramento County supervisors approved the project today.
Sonnenblick Development LLC and the Sacramento County Dept. of Airports will build a 5-story, 135 room Hyatt Place hotel next the parking garage at the airport, county officials announced on Friday.
“Our customers have requested the convenience of an onsite hotel for many years and we are now at a point where we are ready to move forward,” said Director of Airports John Wheat said in a statement.
Officials have been looking to build a hotel at the airport since the previous airport was demolished in 2008 to make room Terminal B.
Construction could begin as early as June 2015, and the hotel would open in 2017, airport officials say.
Sonnenblick is reportedly investing $23 million to build the hotel.
Sacramento County approves Hyatt Place hotel at airport
BEE METRO STAFF
01/27/2015 12:00 PM 01/27/2015 1:35 PM
Sacramento County supervisors Tuesday morning approved a new five-story business hotel at Sacramento International Airport, seven years after tearing down the old facility.
Supervisors voted 5-0 to work with developer Sonnenblick Industries LLC to construct a 135-room Hyatt Place within walking distance of both airport terminals. The hotel will include an indoor pool and spa, fitness room, dining area and 3,500 square feet of meeting space.
Sonnenblick has told the county it intends to enter into a “labor harmony agreement” with UNITE HERE Hotel & Restaurant Employee Union Local 49 when hiring workers to operate the hotel, according to a staff report.
The developer will pay the airport a one-time fee of $2.46 million for use of 164 ground-floor spaces in the parking garage for guest parking. Sonnenblick will also pay the airport a minimum of $900,000 in total rent across the first four years: $150,000 annually in the first two years and $300,000 annually in the next two years. Thereafter, rent payments will be based on a percentage of hotel gross revenue, estimated at $475,000 in the fifth year.
Though they support building a new airport hotel, some supervisors were not impressed Tuesday with the first drawing of the Hyatt Place hotel, telling staff that they want to review the structure’s design in the future.
“It appears it’s a concrete block facade,” said Supervisor Roberta MacGlashan. “It needs to blend in better.”
Hotel construction is expected to take two to three years. Sonnenblick is projected to spend about $24 million building the hotel.
Bee staff writer Brad Branan contributed to this report.
