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Los Angeles

Nickelodeon Hotel & Resort planned for OC

500-room resort could entail $103M in land and tax discounts from Garden Grove

Renderings of Nickelodeon Hotel & Resort at Harbor Boulevard and Twintree Lane in Garden Grove (City of Garden Grove, Getty)
Renderings of Nickelodeon Hotel & Resort at Harbor Boulevard and Twintree Lane in Garden Grove (City of Garden Grove, Getty)

Local developers aim to build a $277 million Nickelodeon Hotel & Resort in Garden Grove, with the city agreeing to pay more than a third in subsidies.

Newage Garden Grove II and Kam Sang Co., both based in Arcadia, have filed plans to build the 500-room hotel at Harbor Boulevard and Twintree Lane, the Orange County Register reported.

The Garden Grove City Council this week unanimously approved the sale of 3.7 acres of city land for the hotel project.

Plans call for a 23-story hotel, a 9,500 square-foot ballroom, a 22,300 square feet of restaurants, a 7,000-square-foot arcade, a spa and fitness center and 528 parking spaces.

The resort will include water slides, splash zones, a pool, and a lazy river where guests “have an animatronics experience,” according to developers, in addition to a Nick Studio, Studio Hall and a Kid’s Lounge.

It would be built in the city’s Grove District, which aims to draw tourists visiting nearby Disneyland.

City officials touted project benefits as “significant” – expected to generate millions in local taxes and hundreds of hotel and construction jobs, with a preference for hiring local residents and union construction workers for its construction.

The deal to bring SpongeBob to Orange County includes millions in local tax breaks.

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Garden Grove agreed to give Newage Garden Grove II and the Kam Sang Company a break on the land sale and reimbursement of hotel tax revenue, expected to equal $103 million in public assistance over a 30-year period.

Garden Grove agreed to sell its 3.72-acre land parcel to the developers for $920,000, after paying $9.7 million for the land over the past two decades. The estimated value of the land is $10.6 million, according to appraisals obtained by the city.

The agreement also calls for giving the developer up to 60 percent of the city’s hotel tax revenue for three decades, up to $93 million.

The Nickelodeon Hotel project will generate $236 million in taxes and generate more business for Garden Grove’s hotel corridor, pumping more than $1.75 billion into the city’s economy and another $2 billion to the region over a 30-year period, according to a city analysis.

The Nickelodeon resort in Garden Grove may be unique in the U.S. The cable television channel known for its shows for children and teens is affiliated with two hotels and resorts in the world: one in the Dominican Republic’s Punta Cana and the other in Mexico’s Riviera Maya, according to the Nickelodeon Hotels & Resorts website.

Nickelodeon also has theme parks across the world, including a Nickelodeon Universe inside the Mall of America in Minnesota.

In March, an affiliate of New York-based Blackstone Group sued KS Development, a subsidiary of Kam Sang Co., over the termination of a $265-million deal to buy nine hotels across California.

— Dana Bartholomew

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Commercial Real EstateOrange County