Dana Point mayor: No-go on harbor hotels could be loss of millions for city

Dana Point city leaders are concerned delays in the approval of new
ground leases for the massive renovation underway at the county-owned
harbor could cost the coastal town tens of millions of dollars in city
bed tax revenue and close the window on having two new hotels open for
the LA 2028 Olympics. 

The OC Board of Supervisors in June pushed the vote on the new 66-year
ground leases until their next meeting, which is Aug. 11; Supervisor
Katrina Foley had suggested additions relating to hotel employees and
rents for the marina slips. 

The developers, who are renovating the marina, overhauling the harbor’s
commercial core and planning the new hotels, said at the time that the
new ground leases, which add 10 additional years, were key to getting
the financing for the hotels and their construction underway in time to
open for the 2028 Olympics. 

“Everyone walked away from the Olympics in that June meeting,” Dana
Point Mayor John Gabbard said. “I just think it’s too much of a delay to
get it done in time.” 

Bob Olson, president of R.D. Olson Development and part of Dana Point
Harbor Partners, which the county tapped in 2018 for the massive
overhaul, has been working on a surf lodge, which would be the first
privately owned rate-restricted hotel in the state, and a 130-room
boutique-style, market-rate hotel, to replace the existing 167-room
Marina Inn. 

But since the supervisors’ June meeting, he said he’s stopped all design
and planning on the new hotels, and it is more likely now that a
renovation of the aging Marina Inn will be pursued. 

The two other components of the harbor renovation, which include the
2,265-slip marina being built by Joe Ueberroth of Bellwether Financial
Group and the 120,000-square-foot commercial core led by  Bryon Ward of
Burnham-Ward Properties, are well into their construction. 

Gabbard said that losing the two new hotels would be significant for the
city, which expected a flow of new bed tax revenue, more job
opportunities and another reason for people to visit Dana Point. 

“Two shiny new hotels are a benefit to the city,” Gabbard said, adding
that without them, the city would not expect to get the more than $80
million anticipated in bed tax over 20 years. “Only having a renovated
hotel isn’t the same.” 

And he said it would also undermine the county and city’s vision for the
harbor becoming a coveted Southern California destination. 

Additionally, and equally important, he said, is the ongoing burden of
construction on harbor business owners, the community, and the public
seeking to use the 142.65-acre county amenity. 

“If (the harbor renovation) gets delayed or somehow altered, we’re the
ones that feel that impact,” Gabbard said. “I tell the harbor partners
as often as I see them that the faster this harbor gets done, the better
it is for the city of Dana Point. The more I can push to make sure this
gets done in a timely manner, the better it is.” 

Olson said in recent days he stands firm in his view that the additional
recommendations Foley requested that her Board of Supervisors colleagues
consider make it impossible to proceed with the hotels. 

Among the additions to the ground lease agreements she raised at the
June meeting is an ask that Olson include a labor peace agreement for
future hotel operators at the harbor. The agreement between a hotel
operator and a labor organization prohibits strikes, picketing and
boycotts. 

She also suggested there be controls written in on future rate increases
for the harbor marina slips. 

Involving a union and changing what rates the marina can expect, which
is also revenue for the county, make the project impossible, Olson said
about the plan for the two holels, but also the marina. 

“You’re asking Orange County taxpayers and us to subsidize the boaters,”
he said. “There’s nothing like that in Southern California. We’re almost
70% done with the docks; you can’t do that.” 

Foley said in recent days she’s been a strong supporter of the harbor
renovations and supported Olson while navigating the California Coastal
Commission and other permitting requirements, and believes Olson is
misunderstanding her “considerations” as requirements. 

“He doesn’t have to agree to that,” she said of the suggestion of a
labor peace agreement. “If he doesn’t want to agree to that, fine. I was
proposing something as a way to prevent a threat against his hotel. It
wasn’t to require him to do anything. If he doesn’t want to agree to
that. That’s on him; he can deal with them directly.” 

“These are terms that I requested for the board’s consideration,” she
said. “We had a motion that I was prepared to support, if we could add a
couple of little things. But, I couldn’t do that because we didn’t have
four votes.” 

During the June meeting, during which the ground lease agreements were
among the last items on an already 100-item packed agenda, Second
District Supervisor Vicente Sarmiento said he was receptive to
considering some of Foley’s recommendations and made the motion to
continue the lease discussion after he and his colleagues had more time
to digest the contents of the lease and the new suggestions. 

But he remained a fan of the two new hotels.

“These two hotels will create a long-term economic benefit, not just for
one district but the entire county,” he said. “This is a county asset.” 

Third District Supervisor Don Wagner said he wanted to move forward that
day with the lease agreements the county’s real estate team had worked
out with the harbor partners, and his motion was supported by First
District Supervisor Janet Nguyen. 

Fourth Supervisor Don Chaffee said he was not supportive of Foley’s
last-minute additions, but he also wanted the time to make sure the
66-year lease was done right. He was not that worried about making the
Olympic timeline, he said. 

Each supervisor supported the overall concept of the renovation.

“The county stands to benefit to the tune of millions from this
proposal,” Wagner said. 

Olson said the lease agreements had been negotiated with the county’s
real estate department, CEO and Foley, and her suggestions raised during
the meeting were “a totally new list of demands.” 

“It just kills the deal,” he said. “I thought we had an agreement.”

And regarding Foley’s request that the current employees of the Marina
Inn get job assistance if the property shuts down is addressed by state
regulations, he added. 

“We will take care of them,” he said. “There’s a dearth of associates
for hotels in South County; they’ll be snapped up for employment in no
time. Everybody needs help.” 

If he does not get the required four votes from the supervisors in
August on the ground leases as negotiated, Olson said his only recourse
is to renovate the Marine Inn. 

Olson said there is a “minimum requirement” that he will meet.

“The rest of the harbor is going along well,” he said. “The county took
this out to private developers to remake this and re-imagine the harbor.
We’re coming to the final stretch of finishing the docks, and they’re
beautiful. We’re knee-deep in the commercial core of putting in Class-A
restaurants, shops on the waterfront with outdoor interactive areas.” 

Making the Olympics, Olson said, was already a difficult task given the
construction timeline, but there was hope the harbor would be ready to
be showcased as a backdrop for some of the broadcast coverage and as a
destination in Southern California. 

“The worldwide visibility of Dana Point just elevates the brand of Dana
Point,” he said. “We’re just going to have to wait it out and remodel
the inn. Maybe another day, we’ll get the support we need.” 

Foley said her goal remains ensuring the project moves forward.

At the end of the day, the county is trying to be reasonable in
partnering with a private operator, with the goal of creating
efficiencies, as they are “taking some of the risk off the county,” she
said. 

“We’ve done everything we can to be good stewards, be reasonable and
strike a good balance between public and private, erring on the side of
efficiency and getting out of their way so they can build this project
for the community,” she said. “We just need Bob to learn what the other
supervisors want, (and) address it if he can.” 

https://www.ocregister.com/2026/07/18/dana-point-mayor-no-go-on-harbor-ho
tels-could-be-loss-of-millions-for-city/