Hospitality: Hotel Will Have Southwest Focus
The newly purchased Harbour Lights Resort in the Gaslamp Quarter is being repositioned from a timeshare property to a boutique hotel.
Earlier this month, Orlando, Fla.-based Sunterra Corp. sold the 59-room property to locally based American Property Management Corp. for an estimated $8.65 million.
Harbour Lights is located on Fifth Avenue, between Market Street and Broadway.
The company took over the property on Sept. 4, said Michael Gallegos, the company’s president and CEO.
The transaction was particularly challenging, said Harry Pflueger, a managing director at Insignia/ESG Hotel Partners’ Newport Beach office, which represented Sunterra in the sale.
The property was opened last year as a timeshare, which would have been more complicated to sell, Pflueger said, in a release about the deal.
Sunterra Corp. has been undergoing a fiscal restructuring, he said. Because of the restructuring’s timing, Harbour Lights was sold as a hotel, Pflueger said.
Also, because the property didn’t have a history of financial performance as a hotel, financing its acquisition became more of a challenge for prospective buyers, he said.
According to Gallegos, two local banks were interested in financing his company’s purchase of the hotel.
Joint Venture
However, Gallegos said, the property was paid for in cash. To buy Harbour Lights, American Property took on a joint venture partner, Philadelphia-based Lubert-Adler Partners, he said. American Property is the general partner and will operate the hotel.
American Property owns 26 hotels, most of which they operate. Among them is the 333-room Radisson Hotel Harbor View in San Diego, which the company bought 4 & #733; years ago.
Other American Property hotels include the Wyndham Palm Springs and the Radisson Hotel Visalia.
The company, which was founded 12 years ago, moved its headquarters from Albuquerque to University City last year.
Gallegos began looking into Harbour Lights late last year, he said.
Now that they’ve bought the hotel, American Property plans to invest more than $1 million in the hotel, Gallegos said. He expects the room rates to range from $165-$225 a night.
His plans for the property include adding a 75-person capacity bar and grill, which will be open to the lobby and will have sidewalk seating along Fifth Avenue.
The restaurant’s name and concept has not been finalized, but a menu with a fusion of California, Asian and Latino dishes is already being created, Gallegos said. He’s planning for the restaurant to serve breakfast and dinner. Lunch will be served on special occasions, he said.
Room Changes
Harbour Lights is an all-suite hotel, with an average room size of 550 feet, he said.
The rooms will also see some changes. “We are going to add a lot of fabric and colors and soften the rooms, similar to what you would see in downtown San Francisco,” Gallegos said. New beds with pillowtop mattresses are being brought in.
The property will be marketed for extended stays because of its all-suite makeup, he said.
American Property’s Guy O’Nan, the company’s hotel operations manager, is taking over as general manager of Harbour Lights. Before joining American Property, O’Nan had managed the Sheraton Old Town in Albuquerque, Gallegos said.
As a timeshare, Harbour Lights had 38 employees. According to Gallegos, American Property retained about 30 people. Sunterra took 6-7 employees and one or two members of the maintenance crew were laid off.
Harbour Lights will not take on a hotel brand, Gallegos said. “We think a franchise affiliation would actually hinder or impede the image of the hotel,” he said.
The plans are to promote the hotel as upscale and luxurious. It will be done regionally and nationally, Gallegos said.
The hotel was not been widely marketed because it had been operated as a timeshare, he said. “It has not been exposed to all of the global reservation systems,” he said.
Southwest Sales Focus
Gallegos plans to use major reservation services, airline-owned distributions services, American Express, and advertise in Conde Nast’s travel magazines.
The Southwest region will be a focus for sales efforts, Gallegos said. “We think the property is going to have some very strong appeal to weekenders coming in from Los Angeles and Phoenix, and those are two destinations that we’ll definitely focus on,” he said.
Because of the hotel’s smaller size, Gallegos hopes to make the hotel stand out from larger competitors in the city.
“It’s small, it’s quaint, and we can offer specialized services and pamper guests in a way some of the larger hotels that are very nice in Downtown San Diego cannot,” he said
