Diamond Bar Planning Commission to Recommend Hotel Zone for Honda Site to City Council

The Diamond Bar Planning Commission voted 2-0 Thursday night to recommend  the city's application to establish a hotel overlay zone on the vacant Honda site at the 60 Freeway and Grand Avenue to the City Council.

Commissioner Jack Shah abstained. Commissioner Jimmy Lin was absent.

Shah's abstention came after he shared with staff and fellow commissioners that he didn't see why the city was in a rush to zone for a hotel. He called for staff to wait and make sure there were no other better uses for the site and cautioned that plans to revamp the 57/60 freeway interchange might affect any project at the property.

"There is no compelling reason right now to decide for one use or the other," Shah said, "but there is a compelling reason to investigate any other use that is beneficial to the city."

Community Development Direct Greg Gubman said the city's market study and the zone overlay push is part of an effort to protect one of the few commercial properties the city has left to develop.

The City Council has set goals for development of the site, Gubman said. The overlay designation would ensure that any development plan for the area submitted include a hotel as the primary use, he said.

"They are seeking the best interest of the community, not just the highest revenue for the property owner," he said.

As for the freeway plan, phase one involves the construction of 60 westbound on ramps. That project will slide off .7 acres of the Honda site on the southern edge, Gubman said.

The subsequent phase involves construction of a Grand Avenue off ramp and the creation of two right turn lanes, which will cut into the Diamond Bar Golf Course, he said, adding that the full golf course will remain but be reconfigured.

Other changes to the freeway are planned down the line, but the city aware of what is going to happen with the Honda site, he said.

Gubman outlined options looked at in the market study done on the property and how they relate to the neighboring land owned by the City of Industry.

Industry officials are hoping to know one way or the other by February or March whether a proposed NFL stadium will go forward and the site next to the Honda property, he said.  If the stadium is not a go, developer Majestic Realty has said it would build a business center.

AECOM Technical Services, the firm Diamond Bar hired to do the marketing study looked at the potential for office, hotel, and retail uses for the site.

"Retail is not a very strong option for this site," Gubman said.

One reason is because of the amount of existing retail space in town, he added.

A hotel on the site could have up to 190 rooms with nothing developed next to it, up to 295 with a stadium, and up to 405 if the Industry Business Center is built, according to the study.

"The highest revenue generating potential for the site would be through the transient occupancy tax," he said of the source of revenue cities get from hotels. "A hotel-based development on the site would be the highest and best municipal use."

The Honda dealership building has been empty since mid 2008.

The dealership was by far the city's highest tax revenue generator," he said.

The owners, needing to modernize and enlarge its facility, moved to the City of Industry.

"Since that time, the city has been very concerned about the fate of that project," he said.  "In the years since the dealership closed, there has been no viable tenant to occupy the site."

CarMax was interested at one time but the smaller business concept they proposed for the site fell by the wayside, he said.

The Burger King on the property closed in February.

In March the Diamond Bar City Council voted to approve a $49,000 agreement with AECOM to do the market analysis.

Commissioner Ashok Dhingra said the city has limited commercial land available and should go ahead with the zoning change to protect this asset. If another developer wants a plan on the site that does not include a hotel, that future applicant could apply for a zone change, he said.

"If by changing it to an overlay zone that gives us better marketing, I feel that that is the right step," he said. "I feel that the homework has been done and we cannot really afford to wait for either Caltrans to make up their mind about how they are going to realign the freeway...or the city of LA to make up its mind whether they are going to build a stadium or not."