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Hotel Owner Gets Deals Done With a Little Help From Friends, Family

When Bob Rauch walked into the Hyatt Regency Aventine Hotel in the winter of 2002 to discuss the county’s tourism industry over coffee, he looked like your typical Southern California hotel developer , tan, impeccably dressed with a set of architectural renderings tucked under his arm and a big smile.

Fast-forward to the present and those drawings have become reality. He and partner Joe Simone own one hotel, the 210-room Homewood Suites by Hilton San Diego-Del Mar in Carmel Valley, and have an 80-room Hilton Garden Inn under construction , or reconstruction , next door.

At a “topping off” party for the Hilton Garden Inn held at the Homewood Suites on May 31, Rauch’s and Simone’s friends and relatives ate, drank and made merry. Many kinfolk, who were investors, had also come to the topping off party just two years earlier for the Homewood Suites.

Some, who’d traveled from out of state, were guests at the Homewood Suites in the wee hours of the morning on June 5 when the adjacent Hilton Garden Inn was devastated by fire.

The cause of the blaze has yet to be determined. No one was injured, but 39 suites in the Homewood Suites were damaged by smoke and water. A few were also damaged on the exterior by fire that skipped over from the Hilton Garden Inn and many of the Homewood Suites’ windows had shattered.

Describing several stages of grief following the incident, Rauch, 53, a New York native who’d risen up the corporate ladder to become a hotel general manager then turned to consulting before buying his first inn in Leucadia, said he was shocked after the fire.

“There were three feelings that I can articulate,” he said. “Shock lasted 48 hours, followed by depression, and when that was over there were a few days of anxiety. After that we became very focused on rebuilding.”

Having sold the 52-room Ocean Inn Hotel in Leucadia in 2000 for $3.1 million, he and his wife, Linda, acquired 13.7 acres in Carmel Valley for $4 million.

They were set to close on a loan to build the first of the two hotels on Sept. 12, 2001, the day after the terrorist attacks. Rauch recalls that he was scheduled to fly to Phoenix to sign loan papers, but all U.S. flights had been canceled. The lenders later pulled out of the deal.

“There was too much uncertainty and many loans were canceled post-9/11,” Rauch said. “Things turned around in 18 months, but from September 2001 to May 2003 we lived on credit card debt.”


Finding A Willing Partner

After placing an ad for a partner willing to invest in the hotel venture, he became partners with Simone, a retired executive from what is now AT & T; Inc.

“He’d placed an ad in the Wall Street Journal looking for equity investors,” Simone said. “We’d met a couple of times before socially. But I didn’t know before that Bob was pursuing developing a piece of property. So we put our heads together and our family members invested and we got it done.”

Simone said that he and Rauch work together well “because I don’t have to second-guess his decisions.”

“I’m very comfortable with his operational skills,” he added. Simone handles the financial side of the business and the investor group.

Immediately after the fire, Simone said the partners decided “we had to rebuild no matter what the cost.”

“You get up, dust off and get going,” he said.

Added Rauch: “Our goal was to have all the damaged suites fully operational by opening day at the Del Mar races. We were told it would be impossible because our furniture is custom made and the renovation would take 14 weeks (from the day of the fire). We made it happen in less than half the time.”

On July 27, the partners announced that the Homewood Suites was once again operational. Work to rebuild the Hilton Garden Inn began July 11 and is expected to be completed in March 2008.

Marisa Vallbona, the partners’ publicist who heads CIM Inc., said Rauch’s tenacity and ability to focus on all aspects of the task at hand, from dealing with insurance investigators to ordering furniture, was a key asset in expediting the reconstruction.

Rauch’s wife, Linda, who works part time as the marketing director for the two properties, also describes him as focused.

“When we work at the hotel we don’t really work together,” she said. “He’s always coming and going to board and committee meetings.”


List Of Memberships

Rauch’s bio lists memberships on the San Diego North Convention & Visitors Bureau; the San Diego Convention Center Corp. and San Diego County Hotel-Motel Association. He also has been a member of the San Diego Convention & Visitors Bureau and has served for nine years on its board and for 17 years on its marketing committee.

“Bob is incredibly focused on whatever task it is he’s working on and puts in incredible hours,” his wife said. “He’s very energetic. He gets up early and works late, not so much because he enjoys working, but because he sees things that need to be done.”

Considering that he also teaches part time at San Diego State University’s School of Hospitality and Tourism Management, some might be inclined to call Rauch a workaholic.

But he said that by virtue of the fact he’s home for dinner with the family most every night, sets aside quality time for his children and is able to “unplug” on vacations by not answering his cell phone or reading his e-mail, he is not a workaholic.

Is he, like many local developers, aiming to expand his company with more hotels?

Perhaps, but only on a small scale, he said. Nothing is on the table at this time and Rauch has no renderings tucked under his arm.

“We may end up with four hotels, but not 40,” he said, explaining that he’s not interested in “doing deals all the time.”

“We like to be able to touch each property.”

– – –


Bob Rauch

Age: 53.

Birthplace: Queens, New York.

Education: Bachelor of Arts in hospitality management, Western International University, Phoenix, 1983; Master of Science, tourism administration, Arizona State University, 1986.

Title: General partner, Homewood Suites by Hilton and Hilton Garden Inn San Diego/Del Mar.

Family: Wife, Linda; daughters, Melissa 16, Meredith, 13.

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