Mayor Terry Johnson wrote the development company headed by Douglas Manchester to inform it of the city's decision. A month ago, the City Council said its deal with the San Diego developer for a separate beachfront resort was also dead.

Manchester first signed a deal with the city in May 1998 for exclusive negotiating rights to build a beachfront luxury hotel complex Downtown. At the same time, the developer announced plans for a hotel and golf resort on 318 acres of El Corazon, a former gravel pit at Oceanside Boulevard and El Camino Real.

The California Coastal Commission in June rejected the plan, effectively killing the Manchester beachfront project, although the San Diego developer said he wanted to come back with a revised version. Manchester has said he might wait until after a November vote on a citizens initiative before bringing the project back before the city.