Atlas in the news

Southern California Public Radio (SCPR) / 89.3 KPCC 06/06/16 In This Sizzling Hot Real Estate Market, Should a Downtown Developer Get Tax Breaks? By Ben Bergman http://www.scpr.org/news/2016/06/06/61382/in-this-sizzling-hot-real-estate-market-should-a-d/   Despite a sizzling hot real estate market in downtown Los Angeles, the L.A. City Council has voted to give almost $200 million worth of loans and tax subsidies to a developer building a four-star hotel complex on the long-stalled Grand Avenue project. The beneficiary of the city’s largess is Related California, which as part of the deal will get to keep half of the sales tax revenue generated by the project over the next 25 years – tens of millions of dollars that would normally flow into the city’s general fund to pay for police, street maintenance and other services. The council unanimously approved the package on Friday. This sort of aid isn’t unusual, but that doesn’t mean it always works out for cities, according to Alan Reay, president of Irvine-based Atlas Hospitality Group. “Typically it’s a great deal for the developer – I’m not sure it’s a great deal for the city,” says Reay. “I’ve seen areas where it’s worked really well and I’ve seen areas where it’s worked terribly.” The…

Orange County Register 06/24/16 As Britain Votes to Leave EU, Will There Be Ripples, or More, from Across the Pond? By Rachel Uranga http://www.ocregister.com/articles/california-720540-see-dollar.html   Britain’s exit from the European Union shocked markets, reshuffled alliances and created a new political reality that experts say will be felt in Southern California…   …Another industry likely to take a hit is tourism. Last year, an estimated 700,000 tourists came to California from the U.K., according to Alan X. Reay, president of Atlas Hospitality group in Irvine. “I think we’ll see a dramatic decrease in visitors if the pound doesn’t recover,” Reay said. “From a business traveler standpoint, we’ll see changes in travel fairly immediately. On the vacation side, people book three to four months out. So we’ll start to see it showing up in tourism numbers next year.” Cheung at World Trade Center LA concurred. “If the dollar is too strong, think about the negative impact this will have on the Harry Potter ride at Universal Studios or the ‘Star Wars’ park at Disneyland,” he said.

Los Angeles Business Journal 06/24/16 AEG Drops Planned LA Live Hotel Expansion By Daina Beth Solomon http://labusinessjournal.com/news/2016/jun/24/aeg-drops-planned-la-live-hotel-expansion/   Anschutz Entertainment Group is abandoning plans to build a 755-room hotel next to its Ritz-Carlton and J.W. Marriott tower at downtown’s L.A. Live. The move comes as AEG claims that a planned 1,000-room hotel to be developed by the city across the street infringes on its property rights. In a June 14 letter to City Attorney Mike Feuer, AEG Vice Chairman Ted Fikre said that by moving forward with its own hotel project, the city is disregarding a 1997 agreement that called for AEG to build the Staples Center, LA Live, and a flagship Convention Center hotel. “The development of a second headquarters hotel was not a part of the deal when the city insisted that AEG build a convention headquarters hotel,” Fikre wrote. AEG spokesman Yusef Robb, a former press officer for Mayor Eric Garcetti, said the company is concerned that a city-built hotel, under consideration for a site next to the Convention Center, could block AEG’s access to walkways, driveways, parking, and other facilities. “Certain proposals under consideration would violate AEG’s agreements with the City,” Robb said in a statement….

Orange County Business Journal 06/13/16 Surge of Hotel Development More Than 7,000 Rooms Proposed in Four Cities By Mark Mueller http://www.ocbj.com/news/2016/jun/13/surge-hotel-development/   The four Orange County cities with the heaviest volume of hotel construction are seeing a divergence in the type of properties being built there and the sorts of guests the hotels will target. Hotel projects made up the largest source of activity taken up by Orange County’s top commercial real estate developers on this week’s Business Journal list. Eight of the 20 ranked companies completed hotels in the past year… The developments include a number of limited-service hotels targeting business travelers and budget-conscious tourists, as well as family-friendly resorts and, most recently, high-end offerings. Among the latter is Paséa Hotel & Spa, which opened last month in Huntington Beach. The 250-room property on Pacific Coast Highway has room rates at more than $400 and was developed by Irvine-based Pacific Hospitality Group and R.D. Olson Development in Newport Beach. The project, along with developments in Anaheim, Garden Grove and Irvine, combined for more than 90% of the hotel rooms represented on the list that opened in OC in the past year. The four cities also have a hotel development…

Orange County Business Journal 06/13/16 Indies Rock Hotel Owners Trade Big Brands for Local Focus By Paul Hughes http://www.ocbj.com/news/2016/jun/13/indies-rock/   A range of Orange County hotels are declaring independence, testing the potential and limits of a hot hotel market and foregoing the regular business a brand can bring…   …The brand-to-indie trend comes in cycles, with ebb and flow (see box, this page). It’s flowing toward indie in today’s market. Room rates have risen for two years—rates at Christensen’s property are up about 15% from last fall alone—and the Orange County Visitors Association in Irvine forecasts further revenue growth this year and in 2017. A savvy consumer using technology to research and book stays adds to the growth market where hotels want to run free, said Alan Reay, president of Irvine-based broker and consultant Atlas Hotel Group. “You don’t have to depend on the brand’s reputation anymore,” Reay said. Hotel managers agreed. “Why should we pay somebody money when they don’t have influence?” said Buena Park’s Christensen. Reay said brands bring recognition, loyalty programs, buying power, and easier financing, but owners will weigh that against a loss of control and annual fees that run 8% to 11% of room revenue….

Voice of OC 06/09/16 Disneyland Asking for Largest Hotel Tax Subsidy in Anaheim History By Adam Elmahrek http://voiceofoc.org/2016/06/disneylands-recent-hotel-tax-subsidy-request-is-largest-in-anaheim-history/#   When Disneyland officials unveiled plans this week for a massive new luxury hotel in Anaheim, they also applied for a room-tax subsidy worth well over $200 million, which would be the largest hotel tax subsidy in the city’s history. The proposal calls for a 700-room, 900,000 sq. ft. hotel to be built on a parking lot adjacent to the resort. It would include upscale rooftop dining, two swimming pools with food and beverage service, multiple spas, 24-hr. bell and valet services and a fitness center, among other amenities. The mega resort’s subsidy request was made under the city’s hotel development incentive program, which allows developers to collect 70 percent of the room taxes generated over 20 years by luxury hotels. To qualify, the hotel must be built to standards that would earn a four-diamond rating from AAA…   …City leaders contend such deals are needed because Anaheim is lacking in luxury hotel rooms needed to attract upscale clientele for events at the convention center. But Alan Reay, president of Irvine-based Atlas Hospitality Group, says such arguments are dubious. Wealthy convention goers…

Silicon Valley Business Journal 06/10/16 San Jose in Deal to Sell Hayes Mansion for $47 Million By Nathan Donato-Weinstein http://www.bizjournals.com/sanjose/news/2016/06/10/san-jose-in-deal-to-sell-hayes-mansion-for-47.html   With its handsome 1905 Mediterranean Revival main building, San Jose’s historic Hayes Mansion hotel and conference center looks like a million bucks. Unfortunately, it sucks much more than that every year out of the city’s general fund just to pay the debt service. Now the city is close to an all-cash deal to sell the historic property to a hotel investor for $47 million, enough to pay off the debt and then some. “It’s a beautiful property and a great asset, but it’s a financial albatross to a city when saddled with $37 million in bonded indebtedness,” said San Jose Mayor Sam Liccardo in an interview on Thursday. The potential deal — which must still be finalized — comes after multiple false starts over the years. Success this time around would underline rising values for hospitality assets in Silicon Valley after several years of strong growth in business travel. Previous attempts to sell the property didn’t produce a potential sale price big enough to completely pay off the debt. This time around, the $47 million sale will be used…

Los Angeles Times 06/01/16 Once a Den of Prostitution and Drugs, the Cecil Hotel in Downtown L.A. Is Set to Undergo a $100-Million Renovation By Andrew Khouri http://www.latimes.com/business/la-fi-cecil-hotel-20160601-snap-story.html   The Cecil Hotel in downtown Los Angeles is set to undergo a $100-million renovation by a New York City developer, which aims to transform the former den of prostitution and drugs into a hip boutique hotel and micro rental units. The plan for the hotel is yet another example of the development boom sweeping downtown, where old buildings are being revamped and new hotel and condo towers erected. “We are gutting the entire building,” said Matthew M. Baron, president of Simon Baron Development, which this month signed a 99-year ground lease with the building’s owner, 248 Haynes Hotel Associates. “We are going to redevelop it from the doorway to the roof and everything in between.” But the transformation of the hotel – which served as an inspiration for a season of “American Horror Story” – could prove controversial…   …Alan Reay, president of Atlas Hospitality Group, described downtown Los Angeles as “probably the hottest hotel market in the United States.” If the area’s revival continues unabated, the market should absorb the…

Orange County Register 05/25/15 Rooms with a Surf City View: Paséa Hotel & Spa Debuts Thursday By Hannah Madans http://www.ocregister.com/articles/rooms-717182-hotel-pasea.html   Just in time for Memorial Day weekend, the Paséa Hotel & Spa will have a soft opening Thursday, ahead of its grand opening June 10. The property, which sits across PCH from the iconic Huntington Beach Pier, boasts 250 guestrooms, ocean views, a Bali-inspired spa, 11 meeting rooms, 34,000 square feet of ocean front event space, Tanner’s restaurant and a rooftop bar. Rooms were available for the holiday weekend, according to a search at Hotels.com, which posted rates from $339 per night up to $4,900 nightly for a penthouse suite. Pacific Hospitality Group and R.D. Olson Development are the developers for the project. PHG will serve as the management company for the property and R.D Olson Construction is the general contractor for the project. Scott Blakeslee, general manager of the hotel, said his goal when joining the project last summer was to offer guests a unique experience. “It’s a departure from the traditional coastal properties you see,” Blakeslee previously told the Register. “It has a clean, contemporary look but carries warmth and artistry.” “We took something raw and fun…

Los Angeles Business Journal 05/23/16 Co-Living Firm Squeezes ’Em In HOSPITALITY: PodShare hopes tight space stacks up as business. By Daina Beth Solomon http://www.labusinessjournal.com/news/2016/may/23/co-living-firm-squeezes-em/   Thrifty travelers to Los Angeles now have more options than bunk beds in grim Hollywood hostels or spartan rooms rented through Airbnb. They can sleep in a pod. At Elvina Beck’s PodShare in downtown Los Angeles, guests grab a bed for $40 a night – as long as they’re cool with sacrificing privacy in a unisex communal space with about 20 other people. Just as Uber Technologies Inc. has proved that passengers will jump in cars with strangers and WeWork Companies Inc. has gotten companies to share desks, 4-year-old PodShare is setting out to establish “co-living” as an affordable way to travel or settle into a new city. “It’s incredibly innovative,” said Alan Reay, president of Atlas Hospitality Group in Irvine. “It’s probably the furthest thing away from a typical hotel room you can get.” While some might cringe at sharing space with strangers in their pajamas, Beck believes plenty of travelers, especially 20- and 30-somethings, will love the chance to make new connections. “If I ask what’s your favorite hostel in America, you don’t…

Los Angeles Business Journal 05/16/16 Making Room SBE’s Sam Nazarian welcomes Morgans’ boutique hotel trio to hospitality empire By Daina Beth Solomon http://www.labusinessjournal.com/news/2016/may/16/making-room/   Hotel mogul Sam Nazarian is buying a boutique hotel group in a deal that could bolster his reputation as king of chic nightlife. Nazarian’s SBE Entertainment Group, based in Mid-Wilshire, has agreed to pick up New York-based Morgans Hotel Group for $82 million, plus the assumption of about $700 million in debt and preferred securities. Nazarian, 40, said he saw the acquisition as a chance to take on celebrated hotel brands, including Mondrian and Delano, and inject expertise from SBE’s dining and drinking destinations. “It is not often you find a platform that fits yours so well, especially a platform that fits the same ethos and DNA,” Nazarian said. “The opportunity we see is not necessarily fixing anything, but telling the story as we move forward.” The deal had been in the works for more than a year, stalled by disagreements among Morgans’ investors. The terms priced the stock at $2.25 a share. Nazarian, who began selling off hotel properties last year, said the acquisition supports his long-term goal of managing, rather than owning, the bulk…

Napa Valley Register 05/08/16 Yountville Hotels, V Marketplace Sell for Record $148 Million By Jennifer Huffman http://napavalleyregister.com/business/yountville-hotels-v-marketplace-sell-for-record-million/article_d75c669e-c26d-5119-ba80-18f090c193c1.html In what could be the largest private sale of a Napa County lodging and shopping property, the Vintage Estate of Yountville has sold for $148 million. On April 26, Brookfield Hotel Properties of Maryland bought the 22-acre Napa Valley property from the Egan, Ghilotti and Sandbach families. “We are thrilled to acquire this iconic property and are excited to be part of this community,” said Shai Zelering, managing director, operations and asset management for Brookfield Hotel Properties. The company declined to comment on the sale price, which was calculated by the Napa County Assessor’s office from deed records. The mixed-use estate includes the Vintage Inn and the Villagio Inn & Spa, two restaurants, a spa, meeting space, a three-acre vineyard and more than 43,000 square feet of retail and office space in the V Marketplace. Brookfield is still in the early stages of plans for the property, “but we are committed to maintaining the Vintage Estate’s reputation as a favorite place of both residents and visitors to Napa,” Zelering said. The property’s name will remain the Vintage Estate, and it will remain open…