Atlas in the news

Orange County Register 07/17/16 5 Worrisome Things in Anaheim’s Hotel Deal By Jonathan Lansner http://www.ocregister.com/articles/hotel-722597-luxury-tax.html The city of Anaheim is betting on luxury hotels. Last week, city leaders approved a deal that will see Walt Disney Co. and developer Wincome Group get roughly a half-billion dollars in tax breaks over two decades to construct three, four-star-rated luxury hotels near Disneyland and the convention center. That comes on top of a previous deal to help build another luxury hotel in the resort area. The timing night seem ideal. Empty hotel rooms are scarce, rates are rising. Disney’s spending big bucks on another Disneyland upgrade, Star Wars Land. But mistakes are often made when bets are placed amid a white-hot market. Depending on your view, the planned rebates of hotel bed taxes on these luxury projects is seen as a corporate giveaway or a public-private partnership to boost the city’s outsized tourism industry. Deal supporters claim a shortage of top-flight lodging options in the city hurts its tourism and convention business. Gee, I didn’t know the coastal resorts were so far away! “A huge win for the city’s hotel and visitor industry,” says Jay Burress, chief executive of the Visit Anaheim visitors…

Orange County Register 07/10/16 Historic Hotels in O.C. Coast Cities Are Thriving by Offering Cozy, Personalized Experiences By Hannah Madans http://www.ocregister.com/articles/beach-722021-hotel-hotels.html   Perched above the sand in Laguna Beach is the Laguna Riviera Beach Resort, a blink-and-you-miss-it hotel known for its whimsical murals and history of celebrity clients. The family-owned hotel opened in 1948. Guests in its heyday included Richard Nixon, author Pearl S. Buck, and Bill Hanna and Joe Barbera, creators of “The Flintstones.” The Riviera is the last of its kind in the area, still owned by its builder’s family, says owner Kort Pearson. The 41-room hotel, which was built by Pearson’s grandfather Harry Willats, has seen additions and improvements over the years, but Pearson says the property has “stayed true to its roots.” Kitchens, installed in 1948 just in case the hotel converted to apartments, remain in many of the rooms. Longtime customers include Phoenix resident Bruce Levitta and his family. They’ve been regulars for more than 50 years. “We go for the tradition,” Levitta says. “I would almost feel guilty staying somewhere else.” Nearly 70 years ago, the Riviera’s room rate was around $10. That’s $99 today when adjusted for inflation. Guests now pay between $149…

The Orange County Register 07/07/16 Anaheim Considers Tax Incentives for Three Luxury Hotels Near Disneyland By Joseph Pimental http://www.ocregister.com/articles/anaheim-721842-city-hotel.html   ANAHEIM – The City Council on Tuesday will consider tax incentives reimbursing developers some $560 million over 20 years for building three luxury hotels in Anaheim’s resort district, including one at Disneyland. City leaders said the hotels would help Anaheim attract higher-end visitors and conventions to stay and play in a city that offers Disneyland, Angel Stadium, Honda Center and the Packing House. Average nightly rates of $300 would mean double the tax revenue collected from lower-end properties, they said, and the new luxury hotels would add 2,000 jobs. But an industry expert echoes the city’s mayor in questioning whether the market is there for luxury accommodations and whether developers need incentives to realize the business opportunity. The three hotel projects would be the first ones to take advantage of a policy the council approved in a 3-2 vote last year to encourage the construction of hotels that meet AAA’s four-diamond rating by offering to reimburse developers for 20 years 70 percent of the transient occupancy tax collected from guests. Guests pay a 15 percent bed tax. After the 20…

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….

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…