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Hoteliers skeptical of resort proposal
April 10, 1997

A spokesman for a proposed $160 million Goleta coastal resort painted a rosy vision of the project's future Wednesday by announcing a groundbreaking in 30 days, and a grand opening in three years.

At those words from John Tynan, his Goleta Valley Chamber of Commerce luncheon audience breathed a pleased gasp and applauded. It's been more than 10 years since Tynan began seeking permits for the proposal formerly known as the Hyatt project, and now named the Santa Barbara Club Resort and Spa.

But some local hotel executives shook skeptical heads at the planned 400-room destination resort at Haskell's Beach in west Goleta. It doesn't appear to fulfill the tried-and-true economic formula that adds up to survival in the South Coast "hospitality" business, said Art Flores, general manager of Pacifica Suites in Goleta.

Tynan said the resort will be "the must luxurious destination hotel in the world."

He said the facility, with 28 buildings on 73 acres, can make it here by charging more than $400 per room.

The target clientele, he said, will be mainly groups and corporations willing to pay top dollar for a five-star exclusive destination for events, "Like IBM for a national sales conference."

The key to drawing those groups, he said, is a 26,000-square-foot conference center, able to serve dinner for up to 1,000 people. "It will be the largest on the California coast and will be very marketable," Tynan said.

Nonetheless, Flores and David McCarthy, director of sales for the Radisson in Santa Barbara, said after the presentation that they don't see how the resort can be financially viable in a market where the top hotels, including the Biltmore in Montecito, have trouble filling their $300 per-night rooms.

Discounting the doubters, Tynan said the resort will be "aggressively marketed" worldwide.

The May groundbreaking, he said, will launch work on the mile-long entrance drive from Hollister Avenue, and a building and parking lot to serve as headquarters for the construction of the resort itself.

County planner Jennifer Scholl said that the requisite permits for those projects can be issued by Tynan's promised date, barring complications.

The groundbreaking for the resort proper, Tyrian said, will occur in November or December, with work for about 400 people continuing for two years. Tynan said he's planning for a grand opening "in the first quarter of 2000."

Construction financing for the entire project has not been cemented, Tynan said. But, the owner of the 73-acre site, Alvin Dworman, of Great Universal Capital Corp. of New York, has amassed $50 million in equity, and negotiations are under way in New York to secure the remaining funding.

Dworman has not selected a hotel operator, Tynan said. It could be the Ritz-Carlton or the Rosewood hotels - rather than Hyatt - in order to achieve the right cachet he said.

The proposed resort was known for years as the "Hyatt project," for a minority partner. The project underwent reviews by the county and state Coastal Commission for most of a decade. It also was tangled in legal battles that climaxed in a landmark California Supreme Court decision. In a related settlement, the developer pledged $5 million to local environmental protection groups to buy empty coastal parcels in Goleta for preservation.

Another lawsuit was filed earlier this week that seeks to stop the project. The suit challenges a decision by the California Coastal Commission to allow the developer a time extension through this year to start building. Three local members of the Surfriders Foundation contend more environmental study is needed to protect wildlife and plants along Tecolote Creek, which crosses the resort site.

Tynan's reply is, "Been there, done that."