Building a Hotel Won't Be Smooth Sailing for SeaWorld

Economy UNVEILING THE UNSEEN

Building a Hotel Won’t Be Smooth Sailing for SeaWorld

SeaWorld’s plans to get into the San Diego hotel business will have to clear lots of roadblocks.

SeaWorld’s been navigating a two-year wave of “Blackfish” backlash in San Diego and nationwide and its latest attempt to weather the storm could kick up even more tension locally.

The marine park  announced Monday it’ll phase out its trademark killer whale shows in San Diego, and pursue a SeaWorld-themed Mission Bay hotel deal it hopes will draw more cash.

“You’re really just increasing wallet share of people already coming to the park,” CEO Joel Manby told investors during a Monday call.

He also said SeaWorld was putting its $100 million plan to expand its orca enclosures on hold and shifting at least some of that cash toward another attraction he didn’t detail.

Manby said Monday he’d found a San Diego partner he was confident could help the company get the new hotel.

SeaWorld has inked a partnership deal with Evans Hotel Group, the high-powered owner of The Lodge at Torrey Pines and two Mission Bay hotels, to either build or purchase a hotel.

Manby’s banking on Evans’ local development know-how and connections.

“They are used to how to get things approved in San Diego,” Manby said.

But if SeaWorld opts to build a new hotel rather than buy an existing one, it’ll need to follow city rules and clear a handful of regulatory hurdles.

Here’s a quick breakdown.

The Master Plan: SeaWorld rents its Mission Bay Park property from the city and worked with the city on an updated development master plan in 2002. That plan allows SeaWorld to build up to a 300-room hotel along the Perez Cove shoreline. The hotel would be subject to the coastal height limit and thus can’t be more than 30 feet, or roughly three stories tall, per the document.

The Economic Proof: SeaWorld isn’t automatically granted the right to build a hotel. The master plan also requires SeaWorld to conduct an economic feasibility analysis assessing the need for another hotel in Mission Bay Park. A city spokeswoman said Monday the company has not kicked off that process.

The Environmental Review: SeaWorld will likely need to bankroll a complex review of the environmental impacts associated with the project. That process could take months or even years and would invite critics to raise issues with the company’s plans through public comments or even lawsuits.

The Labor Groups: Unions will be watching closely to see whether SeaWorld commits to hiring union workers to build and work at the hotel. SeaWorld’s weathered a fight with labor before. In 2002, SeaWorld threatened to walk away from plans to expand the park after the City Council  mandated that the company hire contractors who’d commit to hiring union workers to staff and build the hotel. The City Council later reneged on that requirement.

The Enviros and Neighbors: Environmental groups and San Diego residents warred with SeaWorld when it sought its new master plan and expansion, raising concerns about everything from blocked coastal views to noise from firework displays. They’ll be closely scrutinizing any new plans along the coastline too.

SeaWorld Opponents: “Blackfish” spawned an aggressive anti-SeaWorld movement. Members of the movement are sure to write letters and emails to city officials, and show up in force whenever the hotel development plans are discussed.

The City Council: The San Diego City Council will need to formally sign off on a new hotel, per the city’s SeaWorld master plan. So far, the City Council has largely stuck by SeaWorld despite an onslaught of negative publicity.

The Coastal Commission: SeaWorld isn’t exactly thrilled with the Coastal Commission these days. In fact, it’s suing the state regulatory body over its decision last month that SeaWorld must stop breeding its orcas if it wants to proceed with a $100 million expansion of its tanks.

That could further complicate things for SeaWorld. A city spokeswoman confirmed Monday that building a new hotel along the coastline will require Coastal Commission approval.

There is one potential path around some of those roadblocks: buying a hotel instead of building one.

For that reason, Evans – which already owns the Catamaran and Bahia Resort hotels on Mission Bay – could be an extremely convenient partner.

Evans didn’t return a message Monday.

Manby told investors the company is weighing both options. He expected either process would take at least a couple years.

“We want to execute as quickly as we can but we’re not going to do something for quickness if it’s a bad buy,” he said.

Andrew Keatts contributed to this story.

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