GOLETA, Calif. -

You can spell Goleta with a "g" and "o" in bold letters.  The city is on the go, when it comes to capital projects including new hotels.

In the annual State of the City luncheon, Mayor Roger Aceves welcomed  375 guests to the Bacara Resort.  The turnout was the largest ever for the annual city update and exceeded the capacity of the Elks Lodge where it was previously held.

City Manager Dan Singer said the hotel bed tax is climbing significantly and is expected to exceed the money the city gets from property taxes in the next two years.

Aceves says Bacara and the new Marriott are doing well and, "we have two more hotels in the planning stages. The Marriott Residence Inn across from the airport and then another hotel for Storke and Hollister."

Goleta is also taking on the state in a lawsuit over funding for the San Jose Creek project along Highway 217.    Sacramento leaders have gone after the funding, as part of the break up of redevelopment agencies statewide.  Goleta says it started the project before the state decision and should be able to use the funding for dire flood projection near Old Town businesses and homes.

The city is also going to meet with the county to try and rework its financial deal, that was made during incorporation. Aceves says he hopes, because of the impacts from losing redevelopment funds, the city can work out a different agreement on funds.

Aceves also says talks with the Target department store chain are moving smoothly, but it will still take months of work to get a plan through the review process for the proposed site on Hollister Ave.

Nearby, the Deckers Outdoor Corp. is well on its way to finish a corporate headquarters campus on the corner of Los Carneros and Hollister Ave.