{"id":3392,"date":"2026-06-21T06:32:07","date_gmt":"2026-06-21T13:32:07","guid":{"rendered":"https:\/\/losangelesmovinginsider.com\/index.php\/2026\/06\/21\/deal-allowing-developer-to-keep-13-7-million-in-tax-revenue-ends-next-year-after-that-the-money-goes-to-oceanside\/"},"modified":"2026-06-21T06:32:07","modified_gmt":"2026-06-21T13:32:07","slug":"deal-allowing-developer-to-keep-13-7-million-in-tax-revenue-ends-next-year-after-that-the-money-goes-to-oceanside","status":"publish","type":"post","link":"https:\/\/losangelesmovinginsider.com\/index.php\/2026\/06\/21\/deal-allowing-developer-to-keep-13-7-million-in-tax-revenue-ends-next-year-after-that-the-money-goes-to-oceanside\/","title":{"rendered":"Deal allowing developer to keep $13.7 million in tax revenue ends next year. After that, the money goes to Oceanside."},"content":{"rendered":"
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Oceanside will receive millions of dollars annually in new revenue starting as soon as next year after fulfilling an agreement the city struck in 2014 with S.D. Malkin Properties Inc., the developer of two downtown boutique hotels.<\/p>\n

Read more San Diego County finances teetering toward structural deficit, watchdog study finds<\/a><\/p>\n

The Seabird Resort and the Mission Pacific Beach Resort both opened overlooking the Oceanside Municipal Pier in May 2021 with a total of 387 rooms, along with restaurants and retail shops. Since then, in five years, the two hotels have generated $12.7 million from the hotel room surcharge known as transiency occupancy tax, or TOT, according to a report presented Wednesday to city officials.<\/p>\n

TOT money is important to many tourism-oriented cities, such as Oceanside, where it is the third-largest source of revenue. Paid only by hotel guests, it is expected to provide the city with $17.5 million in fiscal 2026-27. The money goes into the general fund for things such as public safety, street maintenance and parks and recreation.<\/p>\n

Under the deal Malkin signed in 2014 with the city, the developer receives the first $13.7 million in TOT revenue collected from its two resorts. The money is an incentive granted by the city after working more than 20 years to attract a builder with a project appropriate for the property, which was cleared decades earlier for redevelopment.<\/p>\n

\u201cThat obligation will be completed next year,\u201d said Oceanside\u2019s Economic Development Director Michelle Geller, in a report to the Oceanside City Council at its meeting Wednesday. \u201cAfter that the city will get 100% of the TOT.\u201d<\/p>\n

Along with the anticipated tax revenue, the hotels have brought other benefits, including jobs on property where for decades there was only paved parking.<\/p>\n

\u201cThe project has exceeded original job projections, generating a total of 445 jobs compared to the initial estimate of 280 jobs,\u201d states Geller\u2019s written report to the council.<\/p>\n

Most of the jobs, 334, are full-time, which is 109 above the pre-construction projection in that category. There also are 59 part-time jobs, four above the projection, and 52 temporary jobs, the report states.<\/p>\n

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The six- and seven-story hotels also have more more tourists and overnight visitors to the city, and they support other restaurants and retail businesses downtown.<\/p>\n

Most Oceanside residents supported the hotels and the business they would bring to town, and the City Council unanimously approved the development deal.<\/p>\n

But not everyone agreed that the city needed to sacrifice millions of dollars in tax revenue to hook a developer. Some people were happy with nothing but parking on the property.<\/p>\n

\u201cAlthough the expiration of these fiscal subsidies is drawing near, it can\u2019t give us our parking, our views, millions in taxes and our Oceanside vibe back,\u201d said Nadine Scott, a longtime resident and community activist.<\/p>\n

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\u201cOceanside has always gone begging for investments when other cities seem to have zero issues getting developers to invest in their beach towns,\u201d Scott said Thursday.<\/p>\n

Read more Inside the revolving door: At San Diego County, staff turn to lobbying for private clients amid lax rules and limited bans<\/a><\/p>\n

\u201cThere is no shortage of developers who see what a gem Oceanside is \u2014 the perfect weather, the beaches and all the other wonderful amenities Oceanside offers,\u201d Scott said. \u201cAll you have to do is look to the concentration of development of unaffordable residences created downtown with no land giveaways to see how valuable the land was and still is.\u201d<\/p>\n

Oceanside chose Malkin from a field of three finalists with proposals for the site in 2005. It was Oceanside\u2019s fourth try in 25 years to land a luxury hotel for the site.<\/p>\n

One of the previous proposals was a 12-story project proposed by San Diego hotel magnate and onetime San Diego Union-Tribune owner Doug Manchester. Manchester\u2019s plan included closing parts of three streets, including Pacific, to vehicular traffic. That and the overall huge scale of the proposal created controversy and opposition.<\/p>\n

In 2003, the City Council voted to pay Manchester $2.2 million to settle a $15 million lawsuit he filed against the city after the California Coastal Commission failed to approve his plan.<\/p>\n

Adding to the lure and lore of the location is the presence of the Graves house, a blue cottage built in 1887 at the corner of Pacific and Seagaze. The small building is known as the Top Gun house for its role in the 1986 hit movie starring Tom Cruise and Kelly McGillis.<\/p>\n

A condition of the developer\u2019s agreement required the preservation of the Top Gun house. It was boarded up and moved off-site during construction, then returned as a nostalgic centerpiece at the Mission Pacific. It opened in 2022 as the High Pie pastry shop. That closed in January, and the venue is expected to reopen this summer as a gelato shop.<\/p>\n

Each of the two hotels covers a single block in a nine-block master plan approved for redevelopment with tourism-oriented businesses by the Oceanside City Council in April 2000. The area in the master plan extends from Pacific Street east across the railroad tracks to Cleveland Street, and from Civic Center Drive south to Seagaze Drive.<\/p>\n

The Club Wyndham Resort, a multi-story time-share and hotel, was the first project completed in the city\u2019s downtown master-planned area. The Wyndham covers the block facing Pacific Street and the ocean, between Civic Center Drive and Mission Avenue.<\/p>\n

Other developments completed in the master-planned area are the SALT condominiums and public parking garage, a Springhill Suites hotel, and the Pierside South and Pierside North residential buildings with ground-floor commercial activities.<\/p>\n

In January, the City Council approved eight- and seven-story mixed-use buildings proposed for the final two undeveloped blocks in the master-planned area. Together the two buildings will have 370 studio, one-bedroom and two-bedroom apartments and six live-work units, with 10% of the apartments reserved as affordable housing for qualified tenants.<\/p>\n

The two parcels, known as Blocks 5 and 20, each cover about 1 acre on opposite sides of Pier View Way north of Mission Avenue.<\/p>\n

Blocks 5 and 20 line the western side of the railroad tracks used daily by Coaster, Amtrak, Metrolink and freight trains. Old buildings and a railroad yard that once were on the property were removed in the early 1980s.<\/p>\n

Read more Michael Smolens: Top San Diego GOP goals drift farther away as vote count continues<\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

City expects to begin collecting TOT money in about a year after developer’s incentive is fulfilled<\/p>\n","protected":false},"author":1,"featured_media":3391,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-3392","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\nDeal allowing developer to keep $13.7 million in tax revenue ends next year. 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