Gay group GOProud will be the first LGBT organization to hold an event at the Manchester Grand Hyatt in San Diego, site of a two-year-old boycott by a coalition of gay rights groups and union leaders.

The gay Republican group will hold its Don't Tread On Us political fundraiser at the hotel on July 31. Fox News personality Tammy Bruce, who is openly lesbian, is scheduled to MC the event.

Fred Karger, whose group Californians Against Hate first launched the boycott against Doug Manchester's two San Diego hotels, the Manchester Grand Hyatt and the Grand Del Mar, in July 2008 after the hotelier donated $125,000 to the campaign to ban gay marriage in California, Proposition 8, called the news “disappointing.”

“We were very disappointed to hear that this brand new LGBT Republican group decided to not honor the 2-year-old boycott of the Manchester Grand Hyatt in San Diego,” Karger said in an email to On Top Magazine.

Jimmy LaSalvia, executive director of GOProud, said he was accepting Doug Manchester's olive branch to the gay community.

“We understand that Mr. Manchester has apologized for his support of Prop 8 and has made a substantial monetary commitment to the LGBT community,” LaSalvia told On Top Magazine. “We believe strongly that the gay community should be in the business of winning new friends, not making enemies.”

But Karger, who is considering a run for president as a Republican, said he sees the issue as unresolved.

“For the last 2 years, [Doug Manchester] has steadfastly refused to meet with the boycott organizers to try to find common ground,” he said.

“Manchester has been trying to break the boycott unsuccessfully for the last year when he attempted to divide the LGBT community by offering $100,000 in hotel credits and $25,000 in cash to anyone who would cross our picket line and hold an event there. His offer was announced at the International Gay and Lesbian Travel Association's annual convention in Toronto, Canada in May of 2009. The offer was greeted by boos and hisses from the 400 attendees.”

“Every other LGBT organization has turned down his money, even during these very difficult times,” he added. “We are very sorry that GOProud has not.”

Earlier in the year, several large professional associations announced they were moving all or part of their convention business away from the Manchester Grand Hyatt.

The State Bar of California has decided against holding its 2011 annual convention at the San Diego property and the American Psychological Association (APA) announced in March it would reduce its use of the hotel when it descends on San Diego to hold its annual convention in August.

While the APA said the boycott influenced its actions and is supportive of the effort, a spokesperson for the State Bar said that moving its 2011 annual meeting had nothing to do with the controversy.

By most accounts the boycott has been successful. A conservative estimate, Karger said, would be $18 million in lost revenues for the Manchester Grand Hyatt alone.