Dana Point Harbor developer said project for new hotel, surf lodge is 'dead' after approval delay

The developer of two hotels planned at the Dana Point Harbor said
Wednesday the project will not move forward after the O.C. Board of
Supervisors this week pushed the vote on a new 66-year ground lease
until next month at the earliest. 

The county tapped Dana Point Harbor Partners in 2018 for a massive
overhaul of the county-owned harbor, now costing the developers about
$600 million, that promises a new marina, which is 70% complete, a new
commercial area, which is under construction, and hotel space. The two
proposed hotels have been approved by the city of Dana Point and the
California Coastal Commission. 

On Tuesday, the developers went to the county to get new ground leases
approved, which they said are key to getting the financing for the
hotels and their construction underway in time to open for the 2028
Olympics, with the surfing competition planned in nearby Lower Trestles. 

The request also spun off a separate ground lease for the hotels and
added 10 years to both leases. 

Fifth District Supervisor Katrina Foley asked her colleagues at
Tuesday’s meeting to add requirements related to the workers at the
Marina Inn who would be out of work when it is replaced by the new
hotels and controls on future rate increases for the marina slips. Some
of the supervisors were receptive, but said they needed more time to
consider the implications and the decision on the requested ground
leases was put off to the next meeting. 

“As it stands today, the hotels will not get built,” Bob Olson, the
partner who has been designing and planning the luxury hotel and the
surf lodge, said Wednesday. “The demands that were brought to the board
kill any hope of going forward. We have stopped all work: architects,
engineers and designers.” 

The separate ground lease for the hotels would provide the necessary
structure for Olson to secure financing, enabling the hotels to recover
from pandemic- and permitting-related delays,  and advance the county’s
long-planned renovation of the popular South Orange County harbor, O.C.
Chief Real Estate Officer Thomas  Miller said in a supplemental agenda
report that was released late Friday, June 19, explaining what the
supervisors would be considering on Tuesday. 

Key to the requests from Olson and his partners was a plan to have the
renovation project completed in time for the Los Angeles Olympics.
Approval by the board would also allow the partners to “preserve the
agreements” with Pacific Life, their current lender and “move forward
with the hotels,” said Joe Ueberroth, who is spearheading the marina
portion. 

Olson said the delay in the supervisors’ approval is preventing him from
obtaining a loan for the hotels because the current financing for the
harbor project does not include them. 

He said he was surprised by Foley’s requests.

“From my perspective,” Foley said Wednesday, “it’s to make sure the deal
that gets done is in the best interest for the next 66 years for the
community benefit. That is our role.” 

Foley suggested that county staff work with the current hotelier to
support employees affected by the pending closure of the Marina Inn and
develop a transition and education plan. 

Her proposed changes also included a requirement for a labor peace
agreement for future hotel operators at the harbor. The agreement
between a hotel operator and a labor organization protects hotel
operators from labor disruptions by prohibiting strikes, picketing, and
boycotts. It does not require a hotel to be unionized, she said. 

“There is no lender that would touch the hotels with these kinds of
restrictions,” Olson said, adding that he is already facing headwinds to
finance the affordable surf lodge. 

The requirement for the labor peace agreement would be essentially
agreeing to a union-run hotel, he said. And, he said retraining the
current Marina Inn employees is “ridiculous” because there are “so many
hospitality jobs in the area that our people will be hired immediately.” 

But, Foley said, that Olson is being “overly dramatic,” that he has a
“contractual obligation” to build the two hotels. 

She also said that Olson and his team can continue to negotiate with
county staff to get things dialed in before the supervisors meet and
make their decision. 

“He can’t just walk away,” she said.

It was not only her recommendations that fueled the board’s decision to
take longer to study the agreements, her colleagues also had their own
considerations, Foley said. 

“I didn’t ask for anything from the dais that would cause any cost to
the hotel,” she said. “My request was because we didn’t really have a
plan in place for the people who were going to lose their jobs at the
Marina Inn. The request was to direct our staff to work with the
hotelier to ensure we connected people to transition for employment
through our workforce development services. And, to make sure people
weren’t one day showing up to a job with no livelihood.” 

Olson said the developers would be “forced to remodel the Marina Inn so
that we are in compliance with our lease.” 

Foley argued efforts were made to get Olson to close the deal with the
county’s real estate division and put it on the agenda two weeks before
the meeting, knowing how loaded the meeting agendas are. That way, she
said, her colleagues “who aren’t knee-deep on the topic” could take time
to consider such a significant item. 

Instead, she said she got a 600-page lease agreement that was filed on
Friday because “they were haggling on terms.” And more changes came the
night before the supervisors’ meeting, which she and her colleagues on
the dais didn’t have time to review thoroughly ahead of an already
packed agenda. 

“It’s not just me; there were three, even four people who expressed some
concerns,” she said. “It’s not the end of the world. We have time over
the summer. Let’s get together and work it out. Let’s make sure the deal
is to the benefit of the community. They’re getting all the terms they
requested.” 

https://www.ocregister.com/2026/06/25/dana-point-harbor-developer-said-pr
oject-for-new-hotel-surf-lodge-is-dead-after-approval-delay/