The hotel portion of the $700 million-plus Dana Point Harbor Revitalization Project remains uncertain following another unsuccessful lease vote, but work on the marina and commercial core continues.
DANA POINT — Plans to replace the Marina Inn with two new hotels remain alive, but another unsuccessful vote by the Orange County Board of Supervisors has added uncertainty to one of the final major components of the Dana Point Harbor Revitalization Project.
On Aug. 25, supervisors considered updated 66-year ground leases that would separate the hotel development from other portions of the harbor project, a move intended to allow the hotel developer to pursue financing independently.
The proposal failed to advance following a 2-2 vote, with Supervisor Janet Nguyen abstaining, according to the Dana Point Times. Supervisors Katrina Foley and Vicente Sarmiento supported the proposal, while Don Wagner and Doug Chaffee opposed it.
For Dana Point residents, boaters and businesses watching the waterfront transform, however, one distinction is important: the broader harbor revitalization has not stopped.
Construction on the marina and commercial core continues despite the unresolved hotel leases. The more than $700 million revitalization includes separate marina, commercial, hotel and drystack components, with work already well underway on several portions of the harbor.
The uncertainty centers on plans to replace the existing Marina Inn with two properties developed by R.D. Olson Development: The Doheny, a 130-room boutique hotel, and The Salt Haus, a 169-room surf lodge.
The proposed lease restructuring would separate the hotel component from the marina and commercial portions, allowing financing for the hotels to be pursued independently. Rising construction costs, permitting delays and financing requirements have contributed to the push for updated lease structures.
Foley has emphasized that the disagreement over the hotel leases does not mean the rest of the harbor project is on hold.
“There’s this belief in some circles that the whole project is stopped. Well, that has to be clarified. No, the project continues,” Foley told the Dana Point Times following the Aug. 25 meeting. “The commercial core is funded, the marina is funded. We’re nearly done with the marina. The commercial core is well underway.”
That distinction matters for residents because construction activity and changes to the harbor will continue regardless of what happens immediately with the hotels.
Work on the marina began in 2022 and has included replacement slips, boater service buildings and infrastructure improvements. Meanwhile, redevelopment of the commercial core is bringing new restaurants, retail spaces, public gathering areas and other waterfront improvements to the harbor.
The hotel portion, however, is becoming increasingly time-sensitive.
Developer Bob Olson told the Dana Point Times that the project remains within its original schedule, but the window for completing the necessary financing process is narrowing.
“We’re still on the original schedule, but we’re running out of time,” Olson told the publication. “We don’t even have the leases to take to the lenders.”
Approval of the leases would not mean hotel construction could begin immediately. Developers would still need to complete plans, seek loan proposals and secure financing.
The dispute also involves the future of employees at the Marina Inn. Several supervisors have called for worker protections to be addressed before approving new leases. Chaffee has identified protections for existing Marina Inn employees as a condition of his support, while Wagner also has said the issue needs to be resolved.
Despite the disagreement, those involved have continued to express support for completing the hotel portion of the project.
For residents, the unresolved leases could ultimately affect more than when two new hotels open. A prolonged delay could influence how long the Marina Inn remains in place, when the surrounding hotel property is redeveloped and the timing of parking, boater services and other improvements associated with that portion of the harbor.
The hotel project also represents part of the larger effort to transform Dana Point Harbor from an aging waterfront into a modernized recreational, commercial and visitor destination. For years, residents and harbor users have watched plans move through approvals before finally seeing major construction begin.
Now, much of that transformation is visible.
New docks have been installed, the marina redevelopment has progressed and construction in the commercial core is changing the landside harbor. Those improvements will continue while county officials and developers work to resolve the hotel leases.
The current disagreement therefore represents a delay to one portion of the project rather than a shutdown of the revitalization as a whole.
Wagner also expressed confidence that an agreement eventually could be reached.
“It’s not over,” Wagner told the Dana Point Times. “We can get to a good deal for the county, a good deal for the developers and a very good deal for Dana Point.”
For Dana Point residents, that means the harbor they see today will continue changing even while an important piece of its final form remains unresolved. The marina and commercial redevelopment are moving ahead, but what eventually replaces the Marina Inn, and when that transformation begins, will depend on whether county officials and developers can reach an agreement before the hotel project’s timeline becomes increasingly difficult to meet.
