Production of an indoor water park in Garden Grove has started on what is currently bare land just north of Garden Grove Boulevard on the west side of Harbor Boulevard.
For those who know where the Restaurante Flor Blanca is located, the Great Wolf Lodge project is right next door, south of that restaurant.
Waterparks are touted as, "The equivalent of the Grand Canyon… and more."
Production of an indoor water park in Garden Grove has started on what is currently bare land just north of Garden Grove Boulevard on the west side of Harbor Boulevard.
For those who know where the Restaurante Flor Blanca is located, the Great Wolf Lodge project is right next door, south of that restaurant.
Waterparks are touted as, "The equivalent of the Grand Canyon… and more."
Senior Project Manager Greg Blodgett said, "There will be an official announcement on the project and groundbreaking from the city and the developer within the next week or so. The city has given the OK to begin construction, and the groundbreaking is being planned for May, but no specific date has been set yet."
Garden Grove City Manager Matthew Fertal said that there were several challenges in bringing the waterpark hotel to Garden Grove.
"The primary objective of developing this particular property was to bring an attraction that was unique to Garden Grove and to anchor the southern end of the Garden Grove Resort District," said Fertal. "Until now, the hotels in Garden Grove have responded to the demand generated by Disneyland, and to a lesser degree, the Anaheim Convention Center. Both of these destinations are in the city of Anaheim."
Fertal said although the hotels in Garden Grove have been "hugely successful," their demand is generated by attractions not in Garden Grove. "Therefore, there was a strong desire to create an attraction in Garden Grove that would bring visitors to Garden Grove and something that the city could take pride of ownership."
Fertal said that through an RFP process, the City/Redevelopment Agency chose the McWhinney Company to develop the attraction for Garden Grove and that McWhinney teamed with Great Wolf Lodge Resorts to build a water park hotel.
"This concept of a hotel with its own indoor water park, as well as Great Wolf Resort, was new to Garden Grove and to the region," he said, explaining that city staff spent considerable time visiting and understanding the concept of a hotel with an indoor waterpark.
"After on-site visits to various waterpark hotels, the city became convinced that the Great Wolf Lodge Resort was exactly what the Garden Grove Resort District needed to bring a unique attraction that Garden Grove could claim as its own."
And so it was, in May 2010, the city and its Redevelopment Agency approved a Development Agreement with McWhinney to construct a 600-proom Great Wolf waterpark hotel, according to Fertal.
Fertal said the immediate challenge for the city's Redevelopment Agency was completing the acquisition of property that would eventually make up the 12-acre site for the hotel.
"One 5-acre parcel of the site contained an RV park, housing, at the time, 38 low-income families residing in dilapidated trailers and campers," Fertal said. "There was extra sensitivity to the relocation of the residents, with much care and consideration, the agency staff and its consultants, successfully relocated the residents and also the Humdinger Bar and a low budget motel were some of the other blighting uses located on the site."
Fertal said the property was cleared in 2012, but even though the development agreement was approved in May 2010, Southern California was still feeling the economic effects of the recession.
"In particular, was fallout from the banking crisis, traditional bank financing for new construction was very difficult to come by," he said. "Especially for a 600-room, full service hotel and adding to the challenge was that the Great Wolf Resort was no ordinary hotel, with the majority of the rooms being suites, that are almost twice the size of a typical hotel room."
Then, there was the 100,000 square feet of indoor water park and the many other amenities, which pushed construction costs well beyond a typical hotel.
"In short, the high construction costs for this hotel, combined with the very limited bank financing put tremendous pressure on the developer to seek other funding sources and thus because of those extraordinary construction costs, the city's Redevelopment Agency agreed to provide the developer financial assistance in the amount of $42 million upon the opening of the hotel," said Fertal. "The proposed method of providing this financing was that the Redevelopment Agency would issue Redevelopment Tax Allocation Bonds, with the Tax Allocation Bonds, which used to be a very common method of financing Redevelopment Projects.
"Even with the developer's challenges to secure construction financing, the project was proceeding on schedule until June 27, 2011, when Gov. Jerry Brown signed AB26X into law, which eliminated Redevelopment Agencies in California," Fertal added. "This single act put all redevelopment projects in limbo and there was instant uncertainty as to whether the Garden Grove Redevelopment Agency could honor its obligations under the previously approved development agreement. Specifically, could the Redevelopment Agency convey the property to the developer, and could the Redevelopment Agency still issue the $42 million in bonds upon the opening of the hotel," he said.
"This uncertainty was a huge blow to the project. The developer could not proceed without certainty of conveying the property and certainty of receiving the $42 million upon opening of the hotel."
Fertal said that from June 27, 2011 until November 8, 2013, when the city received a "Final and Conclusive" determination from the State of California Department of Finance, which provided all of the approvals from the State that the waterpark hotel project and Redevelopment Agency could convey the property to the developer and the agency could issue the $42 million, there was an 18-month period of uncertainty that was difficult and stressful for all parties concerned.
Garden Grove Mayor Bruce Broadwater gives credit to Fertal, "For making it happen."
"It definitely placed this important project in jeopardy," Fetal noted, giving credit to McWhinney, the developer; Great Wolf, the operator; and the city/redevelopment staff, along with the city finance director and various attorneys,.
"All parties engaged during this 18-month period to secure the final approvals from the DOF — and the process to secure DOF approval took several trips to Sacramento, and letters of support from our state and local legislators," Fertal said.
Fertal noted that when all of the approvals were finally in place, the parties began the process to close the project-financing and convey the property.
"Escrow closed on March 21, 2014 and that's when tractors and equipment were moved on site and activity began. Construction should take about 18 months."
According to Fertal, the expected opening is in the fall of 2015.
He also said that in a couple of weeks, McWhinney and Great Wolf will hold a formal groundbreaking ceremony.
"Needless to say, this project will have tremendous benefit to the Garden Grove community and to the Resort District. I believe this is a great achievement by many people and all of the parties who worked so hard and did not give up, despite the many challenges."
