Will Plaza Banderas Hotel Be Built?

The city is still in negotiations with the owner of the future Plaza Banderas Hotel over an expensive pipeline that could jeopardize the downtown project from ever breaking ground.

Last week, the City Council moved to restructure and re-bid a $2.18 million water line relocation project, which will bring more water across the I-5 to one of the oldest sections of town.

The pipeline is to be built in conjunction with the Ortega Highway interchange upgrade, set to begin construction in February.

According to a development agreement with property owner  the developer needs to pay for the majority of the costs to build the alternate water pipeline. Caltrans, too, will pitch in.

In January 2011 the developers of the 124-room hotel told the city council that the city should be partially repsonsible for the water line relocation, because the water relocation would also be needed for any future develoment in the downtown area. Later that year, officials agreed the city's share would be about $378,000.

The intial plan was to have the city's redevelopment agency help pay the city's portion.

But about the same time, just as the hotel was scheduled for final approval, Gov. Jerry Brown announced his plan for “realignment” of the state’s budget which included shutting down redevelopment agencies across the state. 

The city and Stroscher Thomson have been negotiating ever since but have been unable to reach a final agreement. 

"Staff has had discussions with the owner of the Plaza Banderas Hotel but thus far has not received any commitment from the owner to construct the pipeline," according to a staff report.

Also at the meeting, the council rejected a bid to build the pipeline from Rados Inc. for $2,335,599, and directed staff to revise the construction plans and request new bids for the project. 

The “restructuring” in the pipeline project's funding aims to reduce the cost of the project by providing longer periods of construction and an extension of the bid response time, according to the supplemental agenda report. 

In Other City Council News: 

• Councilmembers approved the services agreement that will hire NBS Government Finance Group to review city fees and which projects they fund. Councilmembers told NBS the neccessary priority the downtown master- historic- and general-plans have, looking to include these projects in the updated fee study. “We’d really like to kick start all that planning for the downtown plan,” Councilman John Taylor said.
• The council approved the Parks and Recreation Master Plan of Trails. The updated plan includes two trails and two trail connections that will join the existing trails in the Northwest Open Space. The 2C Ranch Trail connections and trail additions are named Foster Trail, 2C Ranch Trail, Trabuco Creek West Bank and Trabuco Creek Trail.