Mayor Callahan refuses to pay Hotel Del Coronado bill

They drive some very hard bargains in Coronado. Last year Coronado city officials and the management of the landmark Hotel de Coronado hit on a way to make money together. The hotel has wanted to add an 880-space parking garage, topped, perhaps, by tennis courts. The ten-million-dollar project was to be financed much more cheaply than normal, however, when the city council agreed to form a nonprofit corporation to issue tax-free bonds. The hotel in turn worked up a deal that would pour ten percent of the revenues from the new hotel parking lot (some $70,000 annually) into the city treasury.

The hotel paid out $5000 for preliminary studies, and was eager last month to hire a bond consultant to finish the paperwork. That $15,000 expense would be split with the city, reasoned hotel executives. But Coronado Mayor Pat Callahan and his colleagues balked. They argued that the city treasury is already stretched taunt, and urged the hotel to pay the full tab for a bond consultant. “We figured if they [the hotel] want the bond, they ought to pay the whole thing,” says Callahan. After all, the mayor reasoned, there’s a chance the deal might never be consummated, and Callahan knows Coronado can’t even afford $4000 to rewire broken lights on the municipal tennis courts, or the $34,000 needed to trim overgrown pine trees along Margarita Avenue near the golf course.

But no sympathy issued from the hotel’s executives suite, where President Scott Anderson ruled out any compromise on the fifty-fifty financing. “It’s a joint venture,” Anderson explained last week. “If they can’t come up with the money, well that’s life in the big city,” Anderson says the two sides “parted friends” on the disagreement, and he figures negotiations could be reopened later, But he also hinted that the hotel will secure its own — perhaps more expensive — bank financing by year’s end, without the city’s help.