A local developer will receive a 25-year tax subsidy from the city of Westminster to build a four-star hotel, banquet hall and mixed-use residential project on a vacant lot on the corner of Bolsa Avenue and Brookhurst Street, the city’s first full-service hotel project.
The Bolsa Row project, by developers Bac Pham and Joann Pham, is designed based on French colonial architecture in Saigon, and would include a festival street for outdoor events, 37,550 square feet in retail space, 15,869 square feet of event space, a 144-room four-star hotel and 201 multi-family residential units.
The project includes a tax subsidy in which the city will return 65 percent of hotel bed taxes for 25 years – estimated to be worth $11.6 million — to the developer. The city also has pledged to spend $4.5 million of its own money on public improvements around the site.
City staff estimated the project will generate a net $21.5 million in hotel bed tax and sales tax revenue, generate 733 temporary construction jobs and 237 permanent jobs.
At a June 27 meeting, councilmembers voted 4-0 – councilwoman Margie Rice was absent – to approve the development and the accompanying subsidy.
“The alternative is dirt – an empty dirt lot,” said Councilman Sergio Contreras. “It’s a dirt lot where people place campaign signs and billboards.”
The subsidy is part of an overall economic incentive policy passed by the City Council last year, which includes plans for business improvement loans and rebates for car buyers. Last year, the City Council approved a taxpayer-funded rebate program that would give $500 in taxpayer funds to Westminster residents that buy a new car from a dealership within city limits.
Officials at the cash-strapped city – which passed a one-cent sales tax increase in 2016 to avoid a bankruptcy – say the new incentives will spur economic activity and generate new revenue for the city.
The Bolsa Row project is located on a 6.2-acre corner lot that has been vacant for several years aside from a steady rotation of campaign signs and advertisements. City leaders have tried for several years to transform Bolsa Avenue – the main thoroughfare running through Little Saigon – from a common shopping destination for the Vietnamese American diaspora to more of a “destination” for outside visitors and tourists.
The four-star rated hotel would have live entertainment, a 24-hour restaurant, and bar and lounge that would serve alcohol from 11 a.m. to 2 a.m. The complex is permitted to host outdoor live entertainment events up to six times a year, and includes two electronic billboards facing the street which would display ads and other messages from 6 a.m. to midnight daily.
“We have people who are visionary to help bring this town where it is now,” said Councilwoman Kimberly Ho. “This is really, we should be very proud.”
A number of residents living in neighborhoods adjacent to or across from the site raised concerns about the project’s density and potential traffic and parking problems.
Anthony Candoll called the intersection of Bolsa and Brookhurst “crash corner,” citing heavy traffic at the intersection.
“We want to put party central on the corner of crash corner,” Candoll said. “It’s not a question of whether you could or not, it’s a question of whether you should.”
Resident Ronald Hamamura, who lives in a nearby neighborhood, said he supports the project in general but does not believe it meets “common sense” parking needs.
“We currently already having people parking on our streets from nearby businesses,” said Hamamura.
The project includes two above-ground parking structures, one with 336 spaces for the 201 residential units, and another structure with 318 spaces for use by the hotel, retail customers and visitors to the banquet hall. Another 44 parking spots will be available along the festival street.
Residential parking is a growing issue in cities across Orange County, especially in neighborhoods near apartments. Some cities, like Anaheim, have instituted permit-only parking programs to limit who parks in residential neighborhoods.
Ken Ryan, a principal with the architecture firm KTGY, said the developer has offered to pay for the $3,000 fee to institute permit-only parking in Hamamura’s neighborhood. When special events such as a proposed Lunar New Year Festival occur at the site, the developer has a plan for off-site parking, Ryan said.
Nearby cities like Anaheim and Garden Grove have both used tax subsidies to encourage new hotel developments. In Garden Grove, where officials have used new hotel developments to attract tourists from Anaheim, the city has spent more than $100 million in public dollars subsidizing the Great Wolf Lodge Waterpark Hotel.
Another hotel by the Shanghai Construction Group will receive an estimated $17.6 million worth of hotel bed tax subsidies from Garden Grove.
Hotel subsidies have been more controversial in the city of Anaheim, where council members are divided over the use of subsidies to benefit hotel developers and large corporations like Disney. In 2016, a previous city council awarded nearly $300 million in hotel bed tax rebates to the Wincome Group to build two four-diamond rated hotels, and another $200 million in tax rebates to Disney for a separate four-diamond hotel.
A coalition of Disney worker unions is currently pushing a ballot measure, which will go before voters in November, that would require any business within the Anaheim Resort district receiving a city subsidy to pay a minimum wage of $18 an hour by 2022.
Although a few Westminster residents raised questions about the subsidy, most who spoke were concerned about traffic, noise and crime impacts on their neighborhoods.
Westminster officials commissioned the firm Rosenow Spevacek Group to conduct an independent financial analysis, which determined “that the operation of the Hotel is not financially feasible without significant public assistance,” according to city report on the subsidy. Voice of OC requested the report last week and city officials have yet to provide it.
The project’s team includes two well-known Orange County politicians – Garden Grove Mayor Steve Jones, who is a real estate consultant, and former State Assemblyman Van Tran, who is a lawyer.
Bac and Joanne Pham, members of the family behind the project, are both campaign donors to city council members.
Most recently, Bac Pham, CEO of a Ramada Inn, gave $1,500 in January to Councilman Tyler Diep’s campaign for state Assembly. Faircrest Real Estate, a company owned by Joann Pham, also gave Diep $1,000.
Contact Thy Vo at email@example.com or follow her on Twitter @thyanhvo.