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Cove project a deal that ‘almost was’

Judging from the current status of the long-dormant Red Roost and Red Rest beach cottages--nothing happening, nothing planned--it could be assumed there’s been little or no activity to redevelop the historic dwellings overlooking the Cove.

But that would be a wrong assumption, as a proposed deal that would have reconfigured the 112-year-old, California bungalow-style cottages at 1179 and 1187 Coast Blvd., along with a large chunk of La Jolla’s downtown Village including La Valencia Hotel, fell through recently due to the world economic downturn.

Attorney Richard Annen clued the community in on all the behind-the-scenes details of that failed deal last week at the La Jolla Community Planning Association’s (LJCPA’s) May 7 meeting.

‘Almost was’

“They have done anything but sit on their hands in an effort to try and do this,” said Annen about his clients’ efforts to renew the beach cottage site. La Jolla Cove Properties, Inc., a wholly owned subsidiary of La Jolla Cove Motel and Hotel Apartments owns La Jolla Cove Suites at 1155 Coast Blvd. and the cottages.
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“A concerted effort was made over the last several years to try and bring in joint-venture partners, who, as part of the redevelopment of La Jolla Cove Suites, would also commit to preservation of the Red Roost and Red Rest.”

Annen revealed the huge redevelopment deal “that almost was,” involved Cove Properties, La Valencia Hotel and Emar Development of Dubai.

“We entered into a development agreement with them (Emar) in May 2008 that called for building a new hotel on the La Jolla Cove Suite site, and putting in high-end residential condos that would be tied in with the hotel with an entrance off Prospect with new retail,” said Annen.

Add La Valencia

The talks were in the same timeframe in which the La Valencia came on the market at that same time, and subsequently was included in the deal.
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“The goal was to have the La Valencia Hotel rehabilitated to potentially build a new wing on the hotel and redo retail,” he said.

Under the proposed deal, he added, La Jolla Cove Suites would have become condominium homes tied in with amenities associated with La Valencia, which then would have been turned into a five-star hotel.

Annen said the Red Rest and Red Roost were then to have been preserved by shifting them slightly down on the property so the backside of the lot could be developed with additional units or timeshares.

Overall redevelopment

“Something to give some economic value to that property,” he said, adding a restaurant or something like it could have been added to the project, and the Red Roost/Red Rest could have been used as rental residences.

“It was really an overall redevelopment of this whole part of the downtown,” said Annen. “Unfortunately, that came to a crashing halt at the end of last year as the world economy went down.”

Further complicating the situation was unexpected involvement by the city of San Diego which, on Oct. 14, 2008, charged Cove Properties Inc. and the corporation’s director, Krista Heron Baroudi, with several code enforcement misdemeanor violations for their failure to properly maintain the property and to maintain the historical bungalows located on the property in a manner that preserves their historical integrity.

Back to court

These violations are punishable by three years probation or 180 days custody and/or a $1,000 fine. The defendants pled not guilty on Dec. 4, 2008; the next court hearing is July 19.

“As it stands today, we’re working with the City Attorney’s office to keep the status quo on the Red Roost and Red Rest,” said Annen. “But there’s no money available to rehabilitate them, and development partners have evaporated. Nobody can get construction finance for that kind of project right now. The credit markets are too tight.”

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