Fairmont, Hyatt spar over San Francisco Airport development

A proposed $250-million hotel at the San Francisco International Airport is the site for a legal scuffle between Fairmont and Hyatt hotels. Hyatt was selected out of 11 bidding hotel chains to manage the property, but Fairmont, which came in second place, is now protesting the bidding process.

The debate has now been put before the board of supervisors for the hotel development, and will revisit the issue Nov. 18.

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Fairmont is arguing Hyatt should have been excluded from the bid because the criteria for the process prohibited companies with hotels within a 10-mile radius of the development, but a city attorney claims the nearby Burlingame Hyatt is a three-star hotel, and the restriction applied only to four-star properties.

The $250-million development includes a $15 million AirTrain station and will cost $466 million with interest on the debt over a 40-year period. The airport will pay Hyatt Corporation to operate the hotel $20 million over a decade, while Hyatt contributes $5 million to construction costs.

The hotel is expected to open in 2019.