Sierra Suites (Pike Area) Hotel NOT Dead

December 11, 2009

LBReport.com has learned that the Sierra Suites (Pike-area) hotel project, which (as we previously reported) received Coastal Commission approval on Dec. 9, is not dead.

In a telephone conversation with LBReport.com this morning (Dec. 11), Lodgeworks Senior VP for Development, Steve Gebert, noted that the project now has Coastal Commission permit entitlements...but now lacks financing...and Lodgeworks also needs to deal with the added cost of a $937,000 "in lieu" fee required by the Coastal Commission on the project.

Mr. Gebert said Lodgeworks hopes to work with Pike lessor DDR to find feasible ways to deal with the nearly $1 million in-lieu financial impact.

Mr. Gebert noted that DDR (Pike lessor) also has an interest in having the hotel go forward since it would bring more traffic to the Pike and the Pike's businesses. [A DDR rep testified at the Coastal Commission in support of the Sierra Suites project].

Pending litigation quashes financing, Mr. Gebert said...and obtaining financing to advance the project means that a currently-pending CEQA lawsuit has to "go away" [his term]. [The legal challenge is being pursued by the Coalition for Good Jobs and a Healthy Community, challenging LB City Hall's use of an EIR certified before the new proposed hotel].

Mr. Gebert noted that current market conditons are also not good, with hotel room rates down considerably...and Lodgeworks is watching for a market turnaround in those conditions.

On Dec. 9, Press-Telegram.com quoted Mr. Gebert in the wake of the Coastal Commission meeting as indicating that the combination of the in-lieu fee plus the pending CEQA litigation had "killed" the project.

LBReport.com followed-up and contacted Lodgeworks HQ the next day to confirm and seek further. We received a return call from Mr. Gebert with added material published here.

[Our conclusion: the hotel deal as it stood is killed, but the proposed hotel is not dead...and could be revived.]