Sensing an opportunity in San Diego's burgeoning downtown scene, developers yesterday unveiled plans to open a posh urban resort called The Ivy Hotel this fall.
A rendering of The Ivy Hotel project, due to open this fall. The 159-room hotel is on the corner of 6th Avenue and F Street.
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Promising a hotel more upscale than the Solamar or the W, Kelly Capital, a local private investment firm, is spending $75 million on the 159-room property at Sixth Avenue and F Street.
The building, formerly known as the Maryland Hotel, will boast a 225-seat restaurant, a four-story nightclub and a rooftop pool and bar area. Room rates are expected to be about $400 a night, with suites ranging from $700 to $2,000.
Kelly Capital, which was co-founded by brothers Michael and Richard Kelly, has a diverse portfolio of investments, from parking garages to National Linen and Uniform Service to the well-known Bitter End bar, which it has operated in the Gaslamp Quarter for 10 years. The firm also acquired and redeveloped a beachfront resort on Kauai in 1997.
Michael Kelly, chairman and chief executive of Kelly Capital, said the project's price tag is high because he wants to transform the hotel into an iconic San Diego destination. If the project succeeds, Kelly Capital plans to open similar high-end hotels in such markets as New York City, San Francisco and Miami's South Beach.
“Return on investment has really taken a back seat” to building a top-notch hotel, Kelly said.
The project will target affluent travelers who are used to the type of service and style that is available from such luxury properties as the Delano Hotel in Miami Beach.
To help create a hip, upscale look, Kelly Capital hired Dayna Lee and Ted Berner of Powerstrip Studio, who have helped design W hotels in Los Angeles and New Orleans, among other high-profile properties.
Kelly said his goal is to bring a vibe to San Diego typically associated with such hotel markets as Las Vegas, New York and Los Angeles. With the transformation of the Gaslamp, more sophisticated travelers are beginning to consider visiting here.
“San Diego has been overlooked and underappreciated,” he said. “It has always been considered a military town or too laid back.”
The Ivy will be more than just a boost for the region's tourism industry, said Sal Giametta, vice president of public affairs for the San Diego Convention & Visitors Bureau.
“It will also be of interest to the local community, especially to the exploding downtown community looking for a place to go,” he said.
While downtown has been a hotbed of hotel development in recent years, the Ivy should be able to distinguish itself by catering to the high-end, Generation X consumer, said Jerry Morrison, a local hotel industry consultant and analyst.
“It should do really well,” he said. “It's a great location, and the concept should work well.”
But Kelly doesn't want to rely completely on leisure travelers. He said the Ivy could get as much as 40 percent of its business from people attending events at the Convention Center.
MTM Luxury Lodging, a Washington state company that runs such properties as Woodmark Hotel and Spa in Kirkland, Wash., will help manage the hotel.
Jennifer Davies: (619) 293-1373; jennifer.davies@uniontrib.com
