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SAN DIEGO-A local developer cleared an initial hurdle this week as the Board of Port Commissioners gave a subsidiary of Sunroad Enterprises the greenlight to begin environmental processing on a 600-room hotel project on Harbor Island.As defined in the initial plans, the project would count $160 million at build-out and could begin construction as early as 2007 with a 2008 completion date for the first phase. A second phase would complete in 2010.Sunroad would develop the project in two phases. The first phase would call for a 26-story tower and 400 hotel rooms. The second phase calls for a 12-story, 200-room development.The project would go up on the site of the Reuben E. Lee restaurant, which is considering a relocation. For Sunroad, the new project would be its third on Harbor Island. It already owns the Sunroad Resort Marina and the Island Prime Restaurant in the area.Many details on the project need to be sorted out. For instance, one idea calls for the Island Prime Restaurant to become part of the new project. Another scenario has Sunroad looking at some of the units as timeshares, however that part of the project has not been approved. The project does include three new restaurants and nearly 1,400 parking spaces.One problem for any new development are the escalating construction costs, according to Don Wise, president and CEO of Napa-based Resorts, Marinas and Vineyards Inc. Wise tells Globest.com that construction costs were already a problem before Hurricane Katrina, but now with materials being needed to rebuild the Southeast, costs are getting out of control.”There is so much capital available right now and probably 35 to 40 projects being talked about, but many projects will be pushed back because of construction costs,” Wise says.Scarcity of material is already a problem in many areas, he adds. “All of the concrete factories in the US are running at 100% capacity,” Wise says. “And we’re seeing in DC, concrete is so tight, that it’s almost like a lottery to gain concrete for development.”

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