Aug. 12, 2003 - Ian Schrager recently snagged a new loan for half the $31.7 million he spent to buy the Miramar Hotel five years ago. He still lacks financing, though, to renovate the Montecito landmark that has been closed since being partly demolished in 2000.

Earlier this year, the New-York based hotelier and his Miramar Holdings LLC partners defaulted on a $16 million loan from Santa Barbara Bank & Trust, which was used to cover most of the purchase price. The bank had threatened, unless it was paid in full, to foreclose on the property. Mr. Schrager avoided that prospect by arranging for the loan to be bought out on Aug. 1 by Canyon Capital Realty Advisors of Beverly Hills.

In a statement issued that day, he reiterated a "commitment to develop the Miramar into a world-class resort." Neither he nor his representatives are predicting when that reconstruction might begin, however.

Having successfully refinanced the loan, his company "can now devote its time and energy to development of the property," Mr. Schrager stated. "We are very excited about its potential."

Portions of the blue-roofed hotel, which dates back nearly a century, were demolished in fall 2000 after Mr. Schrager got county approval for ambitious renovation plans. But work was then quickly halted because construction financing for the project fell through.

Mr. Schrager has attributed the ongoing financing problems to a severe decline in the hotel industry since the 9/11 terrorist attacks.

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(c) 2003, Santa Barbara News-Press, Calif. Distributed by Knight Ridder/Tribune Business News.