Garden Grove's Resort Plays Second Fiddle to Anaheim: Study
During last week's OC GOP central committee meeting, Garden Grove redevelopment was invoked by Anaheim councilwoman and mayoral candidate Lucille Kring. The perpetual 'say to play' politician whined that, "Anaheim does not give everything away that Garden Grove does," in defending her vote on the now infamous $158 million subsidy for the GardenWalk hotel project.
But is the tourism district along Harbor Boulevard in Garden Grove really competitive enough to justify massive developer welfare in Anaheim? Or is Kring and the rest of Dark Lord Curt Pringle's camp hyping a mythical juggernaut?
Before signing off on a subsidized three-hotel resort development last April, the Garden Grove city council was presented a study by Horwarth HTL, a San Rafael-based economic consultant. A copy obtained by the Weekly shows that its findings were used to justify incentives beyond acres of free land. Aside from that, the report spelled out the competitive disadvantages Garden Grove hotels faced when squared off with their Anaheim counterparts.
Looking at a set of seven highest performing lodges, Howarth noted that only two-- the Hyatt Regency and Embassy Suites--were in Garden Grove. It went on to say that even with hyper-development along Harbor, Anaheim Convention Center expansion and a possibly third gate for Disneyland, "most of the Garden Grove properties do not have enough facilities or amenities to be considered 'destinations' in this market." The report only briefly introduced Garden Grove's Great Wolfe Lodge and Anaheim's GardenWalk hotel project as future competitive players, but nothing else beyond that.
The study mentioned that, for now, 90 percent of hotel rooms for Disneyland visitors are claimed by Anaheim. It could only speculate that Garden Grove would capitalize in the future when older independent hotels in Anaheim are potentially razed but unable to be financed for reconstruction due to height restrictions and small land plots.
Other than that, without a House of the Mouse destination in Garden Grove, things don't look too good. The Grove District Resort Hotel development's "upper upscale" 300 room project slated to be constructed off Harbor and Twintree Lane is located at the "farthest distance from the Disneyland resort," and is "more vulnerable to rate discounting and/or additions to supply." It flat out can't compete against Disney hotels. It's only anticipated to have a premium over others in the area on account of its spiffy accommodations, but even favorable projections are capped because Garden Grove is, well...Garden Grove!
After the study, the city responded by giving the developer free land, 50-60 percent bed tax subsidies on all three hotels over 10-20 years, 50 percent sales tax revenue generated from them and by surrounding entertainment venues.
That Anaheim crony capitalist lovers like Kring would posit their neighbor's desperate giveaways in hopes of being known as something other than the birthplace of Steve Martin as reason enough to subsidize the hell out of their well-connected developer friends is as laughable as the OC GOP's factionalism parading around as genuine philosophical rifts over developer welfare!
Follow Gabriel San Román on Twitter @dpalabraz
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