A new 22-story tower with Ritz-Carlton branded private residences will soon become part of the Fashion Island landscape, with city officials and community members calling the project ” a win-win” for Newport Beach and the developers.

The new 295-foot-tall tower replaces an older building at the nearly 10-acre VEA Newport Beach, A Marriott Resort and Spa property. The project, which will convert 159 hotels rooms into homes, is set to move forward after recently receiving unanimous support from the Newport Beach Planning Commission.

Residents will be able to enjoy the amenities of the hotel for a complete resort-living experience, officials said. The hotel will be left with 373 hotel rooms.

The project is the first in the city to take advantage of a City Council decision last year to allow hotels to convert rooms to private residences as a way to help the city create needed housing and help the hotel industry hit hard during the pandemic.

Developers must pay $100,000 for each hotel-branded residence, with $65,000 earmarked for the future acquisition and construction of affordable housing in the city.

“It’s a triple win,” Planning Commissioner Erik Weigand said in describing the recently approved project. “A partnership already exists between VEA and the Ritz-Carlton, and this helps the already damaged hotel industry. It will also bring in more Transient Occupancy Tax (TOT), and hotel rates will increase because there are new rooms, a new bar, a new lobby and a new pool.

“It is in an area that should have a luxurious feel,” he said, “across from Fashion Island in Newport.”

The project will also add to the city’s housing stock, helping it reach a state-mandated goal of planning for nearly 5,000 more homes to meet California’s future population needs, he said.

Weigand said the project also got the nod from SPON (Still Protecting Our Newport), the city’s oldest advocacy group focused on preserving the town’s character and environment. The project’s managers held 25 public outreach meetings with nearby homeowners associations, environmental groups and city, community and business leaders.

“That’s why I call it a triple win for the city,” Weigand said. “What I loved about this project was that these guys just sat down with all the players and explained the benefits, which made the job of the commissioners easy.”

Nancy Scarbrough, a member of SPON, said Friday her group favors the project because “it doesn’t really have anything that is out of compliance.”

“We are enthusiastic about this project because the developer was open the to the idea of ensuring that the in-lieu fees for affordable housing that the city will require for this project will be directly applied to an affordable housing project,” Scarbrough said, adding that she sees a need among the local workforce and seniors.

She said the fees being set aside can be leveraged by applying for county, state and federal grants and accepting private donations to do even more to meet affordable housing needs and the goals for housing laid out by the state.

“This kind of partnership hasn’t occurred in the history of Newport Beach,” she said. “This is a first.”

The hotel portion has been undergoing renovation for about six months and is nearly done with its first phase.

Among the new amenities will be a resort-style pool and spa with lounge seating, a gym, spa treatment rooms and a library. Outdoors there will be a private garden and walking paths.

A second phase, expected to start soon, will be redoing its conference center.

Demolition of the older, adjacent building that will be the site of the new tower could happen by the end of the year, said Seimone Jurjis, the city’s community development director.

Housing needs

To reduce barriers to creating more housing, city leaders looked at including mixed-density options and allowing hotels to convert rooms to residences.

The loss of revenue from the tax tacked onto a night’s hotel stay was balanced against the gain of property tax and need to support more housing in the city.

“We looked at the hotel industry and how it suffered during COVID,” said Jurjis. “We decided if a hotel wants to convert 30% of its rooms, we’ll allow that.”

The Marriott’s management saw an opportunity, Jurjis said, realizing the hotel property didn’t need all of its 532 rooms to meet visitor needs.

In a letter of support to the Planning Commission, longtime general manager Debbie Snavely said the Ritz Carlton residences will benefit VEA and attract even more “high-spending” visitors to town.

“The new campus will make Newport Beach even more competitive in the luxury market and will allow us to further stand out from other luxury locations in Southern California,” she wrote.

Jurjis said the Marriott may be just the first to come aboard with conversion plans. City officials have spoken with properties looking at mixing in residences.

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