Santa Ana real estate tycoon Mike Harrah is proposing to replace a city-owned downtown parking garage with a mixed development consisting of a boutique hotel, apartments and commercial space.
City leaders have for some time discussed turning the Artists Village parking garage at the corner of Third and Broadway into a hotel. The proposal comes after another developer, San Diego-based OliverMcMillan, had suggested building residential units at the site, but said the area wasn’t yet ready for a hotel.
Harrah said his plans are to build a 100-room hotel and a 150-unit apartment complex at the site, with some units for rent and others for sale. He said the buildings would be eight or nine stories tall, and the first floor of the hotel would include arts themed restaurants, bistros and stores.
Altogether, the development would be about 180,000 sq. ft., Harrah said.
“We believe a hotel is a must in order to have sustainability in the Artists Village community,” Harrah told a reporter after a meeting of the council committee last month.
City leaders have said a parking garage is a bad use for such a prime piece of real estate. But they’ve struggled to find a developers, other than Harrah, to construct a hotel, which is what they would really like to see at the location.
Harrah suggested other developers might be hesitant to build a hotel in the downtown because hotel operators generally don’t like to be the first to open their doors. But he said his company, Caribou Industries, “has been a leader and a pioneer since the beginning.”
There might also be another reason why Harrah is confident about his ability to construct a hotel.
Earlier this year, the city council passed a tax subsidy program that allows developers of four or five-star hotels to obtain rebates on the city’s 11 percent hotel visitors’ tax worth up to 50 percent of the hotel tax revenue generated by the business.
When asked whether he would take advantage of the subsidy, Harrah said “it sounds good. Yeah, we would like to do that.”
But whether Harrah’s hotel plans meet the criteria for a subsidy remain to be seen. He wouldn’t say whether he would be building a hotel that would be rated at least four stars, saying only he would like to build a “boutique hotel” with a nice lobby and a small restaurant or bar two levels above the street.
While Harrah is certainly one of the city’s most well known landowners, he doesn’t have a great track record for developing major properties from scratch in Orange County. For years he’s been trying to build One Broadway Plaza, which if built according to his plans would be the tallest building in Orange County.
But his lack of progress on the project has become somewhat of a running joke for the last half decade, with longtime observers snickering every time they hear him claim to have tenants lined up and that a groundbreaking is imminent.
During the interview for this article, Harrah said once again that he’s months away from breaking ground at One Broadway Plaza. And once again he claimed he has two tenants for the building, though he wouldn’t disclose their identities.
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