San Diego port commissioners are being asked to extend Sunroad Enterprises’ option agreement for a long-planned Harbor Island hotel. Sunroad says it cannot meet the end-of-2026 deadline to break ground on the $200 million project and is seeking two more years to secure financing and start construction on the 450-room complex.
Sunroad said starting construction by the end of 2026 is no longer possible, according to the San Diego Union-Tribune. The current version of the project, which traces back to 2016, calls for a 198-room extended-stay hotel paired with a 252-room limited-service property that port officials refer to as a micro hotel, per the same account. The micro hotel is planned to rise 12 to 15 stories, and the overall plan includes a walk-up restaurant and bar area, a swimming pool, a jacuzzi spa, a fitness center, retail and conference space, and a 15-foot-wide public promenade.
A Decade of Setbacks on the Waterfront
Sunroad entered an option agreement with the Port of San Diego in July 2021 to redevelop the 7.5-acre parcel at 851 Harbor Island Drive. The agreement has been amended twice and provides for the parties to eventually execute a 66-year ground lease after the option period. Under the latest terms, Sunroad was required to begin construction by the end of 2026.
Sunroad has asked the Port for two more years to meet its groundbreaking obligation. The San Diego Unified Port District Board of Port Commissioners will consider an amendment extending the option agreement through December 31, 2028, and port agency staff recommended approval, according to the San Diego Union-Tribune. The staff report, as described by the newspaper, cited substantial increases in hotel construction costs and financing interest rates. Sunroad requested more time to secure financing and satisfy option conditions before entering the lease and starting construction…