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Developers say new lease agreements remain key to the proposed waterfront hotels, while city leaders continue to emphasize the project’s economic importance.
The future of two proposed waterfront hotels at Dana Point Harbor remains uncertain as Orange County officials continue considering ground lease agreements that developers say are essential to moving the projects forward.
At the center of the discussion are plans to replace the aging Marina Inn with two new lodging properties, including a 130-room boutique hotel and what developers have described as California’s first privately owned rate-restricted surf lodge. The hotel projects represent one component of the broader Dana Point Harbor Revitalization, which also includes a rebuilt marina, new waterfront restaurants, retail space and expanded public amenities.
Dana Point Mayor John Gabbard said uncertainty surrounding the hotel component could have long-term consequences for both the city and the harbor.
“The faster this harbor gets done, the better it is for the city of Dana Point,” Gabbard said, noting that new hotels would generate additional visitors, jobs and transient occupancy tax revenue while helping complete the vision for the harbor’s transformation.
City officials have estimated the two new hotels could generate more than $80 million in hotel tax revenue over the next two decades. Gabbard has also expressed concern that continued delays could make it difficult for the hotels to open in time for the 2028 Olympic Games, when Southern California is expected to welcome visitors from around the world.
For boaters, the hotel proposal represents one piece of the county’s ongoing effort to transform Dana Point Harbor into a modern waterfront destination while preserving its role as one of Southern California’s premier recreational boating centers.
Most of the harbor redevelopment is already well underway.
Construction on the new marina continues, with many of the new docks completed and additional slips under construction. Work is also progressing on the harbor’s commercial core, where new restaurants, shops and public gathering spaces are beginning to take shape.
The hotel component, however, remains dependent on approval of revised ground lease agreements.
Bob Olson, president of R.D. Olson Development and a partner in Dana Point Harbor Partners, has said work on the proposed hotels has largely paused while the lease issue remains unresolved. Without approval, he said, the project would likely shift from constructing new hotels to renovating the existing Marina Inn instead.
Olson has maintained that the additional lease term is necessary to secure financing for new hotel construction. The proposed agreements would extend the ground leases by 10 years, providing developers with a 66-year lease.
Several recommendations introduced during the Board of Supervisors’ June meeting prompted additional review of the agreements.
Among the items discussed were a potential labor peace agreement between future hotel operators and organized labor, assistance for current Marina Inn employees if the existing hotel closes, and consideration of future controls on marina slip rate increases.
Supervisor Katrina Foley has emphasized that the recommendations were intended for discussion rather than as mandatory conditions of the lease agreements.
She said her goal remains moving the harbor revitalization project forward while ensuring the county protects both public interests and its long-term investment.
“We’ve done everything we can to be good stewards, be reasonable and strike a good balance between public and private,” Foley said.
Olson, however, has maintained that uncertainty surrounding the proposed additions places the hotel portion of the project at risk. He said negotiations with county staff had already produced lease terms he believed were ready for approval before new recommendations were introduced during the June meeting.
Despite differing views on the lease agreements, county leaders have continued to express support for the overall Dana Point Harbor Revitalization.
The county-owned redevelopment, approved in 2018, represents one of the largest waterfront improvement projects currently underway in Southern California. Once completed, the project is expected to include a rebuilt 2,265-slip marina, upgraded public infrastructure, expanded waterfront dining and shopping, new hotels and enhanced visitor amenities.
While the timeline for the hotel portion remains uncertain, city leaders, developers and county officials continue working toward a path that will allow the final phase of the harbor revitalization to move forward. For Southern California boaters, the eventual decision will help shape one of the last major pieces of Dana Point Harbor’s long-term transformation into a modern waterfront destination.
