REDONDO BEACH MARINE AVE HOTELS
Winner of the CALED Award of Excellence
for Economic Development Partnership
Kosmont Companies and the City of Redondo Beach are the proud recipients of the 2017 CALED Award of Excellence for Economic Development Partnership for the Marine Ave. Hotels Project.

On March 16, 2018 in Monterey, CA, Larry J. Kosmont, President/CEO of Kosmont Companies along with Stephen Proud, Waterfront and Economic Development Director for the City of Redondo Beach (pictured here) accepted this award during the 2018 CALED Annual Conference.

Completed in May 2017, a partnership between the City of Redondo Beach and a hotel developer resulted in successful financing and development of three hotels in the City on a gateway property of 8.5 acres with FWY 405 frontage and limited access, with a significant portion that had been undeveloped for 40 years. With Kosmont Companies as the City's Advisor, the City created a financing backstop using transient occupancy tax (TOT) revenue generated by the hotels to help achieve underwriting for the financing.  
PROJECT OVERVIEW
The City-owned property at 2420 Marine Ave, Redondo Beach, CA that had long been underutilized and/or vacant. The odd lot size and condition of the property deterred private investment. In November 2010, the Redondo Beach City Council approved a long-term ground lease with the Developer, however, due to financing market constraints the project did not move forward.

In 2012, Kosmont developed a lease structure in which the Redondo Beach Community Finance Authority provided a guarantee limited to the TOT and property taxes generated by the hotel to fund a debt service reserve account available to be utilized only if hotel revenues were not sufficient to cover on-going operating costs.

The City/Authority’s financial exposure was limited solely to TOT and property tax revenues that were generated by the Hotel Project. No existing General Fund revenues were pledged to the project or at risk in any way . The Authority’s commitment facilitated the development of 503 hotel rooms valued at over $100 million.

The project is a significant success. Following construction of the Homewood Suites hotel, the ongoing General Fund tax revenue generated by the Marine Ave. hotel property is generating over $3.5 million dollars per year to the general fund.
INNOVATION

Facilitated the development of a hotel that generates substantial TOT and other tax revenues for the City while mitigating the City’s risk in its participation. 
NOTEWORTHY

Created a funding structure that did not exist prior to this transaction. In prior years the City would have used redevelopment tax increment to structure deal.
ACHIEVEMENT

No existing General Fund revenues were pledged to project or put at risk in any way. Only new revenues generated by operation of the Hotels were used.
Contact Us For More Information
Larry J. Kosmont, CRE ®
President & CEO
(213) 507-9000
Wil Soholt
Senior Vice President
(310) 740-5681
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