The $300 million project would include a 600-room hotel. It would break ground in 2012 and be the first of its kind in California.
The City Council of Garden Grove, Calif. has voted unanimously to approve the implementation of $51 million in bonds to help to fund the construction of a $300 million water park resort project that would include a 600-room hotel, the Orange County Register reports. The project, which would be the first of its kind in California, would break ground in 2012.
Kingsley Okereke, Garden Grove City Finance Director, said the council vote was the first step in authorizing exploration of the bond measure and doing due diligence on its viability. Council members would then be asked to approve actual sale of the bonds.
“Revenue from the project will be used to pay back the bond,” Okereke added. “The city and redevelopment agency are not obligated to pay beyond what is derived from the project.”
The 10.3-acre site for the resort would be about a mile from Disneyland. Wisconsin-based Great Wolf Lodge, which has 11 resorts in the United States and one in Canada, was named operator of the water park. Users of the park would be required to be registered as hotel guests.
The bonds will go into effect only when the hotel is built and ready to open, Okereke clarified. The city will issue $42 million to construct the hotel and $5 million for a parking structure. The cost of issuing the bonds will add up to $4 million, bringing the total to $51 million.
City officials said the resort project has the potential to generate $8.5 million in revenues from bed, sales and property taxes, based on a 66 percent occupancy rate.
City Councilman Steve Jones said he had no doubts the bond would be good for the city. “The worst-case scenario is that we will have a hotel completely built and ready to go,” he said. But Jones added that he cannot envision the project failing. “Great Wolf is a sophisticated operator,” he said. “They run very high occupancy rates, about 96 percent even when the economy is down. This is going to be an economic development engine for our city.”