CH Founder Douglas Hamm had his eye on this prime 15,000 sf corner site for more than 5 years before ultimately beginning negotiations with the owner to purchase it. The property was one of the best sites left in all of Southern California for a large scale hotel development but complications with the existing SRO (single resident occupancy) building ordinance kept most people away given that the site had a 44 room SRO on it that would need to be removed. In an off-market deal, Hamm was able to put the property in escrow and subsequently negotiate a very favorable agreement with the San Diego Housing Commission to remove the SRO requirements and allow for future development. Given the size of the project and massive potential to build a $100 million dollar, 300 plus room hotel on the site, Hamm brought in a local hotel developer to partner on the project. They closed escrow on the property in 2013.
Note: Shortly after this purchase, CH founder Douglas Hamm and a local hotel developer partnered again to purchase the Baltic Inn which was adjacent to the 7th and Island site and the partners assigned the rights of the unused development rights from the Baltic Inn property to the 7th and Island property in a strategic move that had never been done before in Downtown San Diego. (see Baltic Inn project info here)