A 532-room Marriott hotel on the edge of Fashion Island in Newport Beach will be the first hotel in the city to be partially redeveloped into condominiums under the banner of Ritz-Carlton Residences.
An old hotel tower at the the 10-acre VEA Newport Beach campus at 900 Newport Center Dr. will be torn down and rebuilt as a 22-story Ritz-Carlton Residences, the Orange County Register reported.
VEA Newport Beach, A Marriott Resort and Spa, would be the first in the OC city to employ a rule that allows hotels to turn rooms into permanent homes. The rule was passed last year as a way to help Newport Beach add needed housing while helping a hotel industry hit hard during the pandemic.
The VEA hotel, which lies just outside the upscale shopping center, has been under renovation for six months. The older tower could be razed by the end of the year.
The new 295-foot-tall tower will convert 159 hotel rooms into Ritz-Carlton-branded condominiums. The Marriott hotel will be left with 373 rooms.
Developers must pay $100,000 for each hotel-branded residence, with $65,000 set aside for the purchase and construction of affordable housing in the city. The project will help Newport Beach meet a state-mandated housing goal of nearly 5,000 homes.
A loss of revenue from hotel taxes is expected to be offset by a gain of property tax and need to support more housing in the city, officials said.
“We looked at the hotel industry and how it suffered during Covid,” Newport Beach Community Development Director Seimone Jurjis told the Register. “We decided if a hotel wants to convert 30 percent of its rooms, we’ll allow that.”
In Los Angeles, the Ritz-Carlton Residences at LA Live in Downtown sold all its properties between the 27th and 52nd floors, Ritz-Carlton reported, eliminating the need for a sales office. The rest of the building operates as a J.W. Marriott hotel
The Orange County housing market has soared. Early this year, average rent hit $2,476, an 18.2 percent jump over the first quarter of 2021, Bisnow reported. In March, the median home price in Orange County hit $1 million.
[Orange County Register] – Dana Bartholomew