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Tarsadia Boosting Upscale Hotel Holdings with
Sutton Place Hotel in Newport Beach Buy
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Hotel is changing hands for the second time in its 20-year history

By Sandi Cain,  August, 2004

Tarsadia Hotels, also of Newport Beach, is in escrow to buy the 435-room Sutton Place near John Wayne Airport from Stanley Ho of Hong Kong for an undisclosed price, sources said.

Ho is best known as the gambling czar of Macau Island off the coast of China. The changeover tentatively is slated for mid-October.
 

The pending deal would represent another move by Tarsadia Hotels into the more upscale sector of the hotel market. The company also owns the Anaheim Marriott, the Hyatt Regency Orange County in Garden Grove and the Hilton Checkers in downtown Los Angeles.

“It’s a good market and a well-located hotel for the right buyer,” said Bruce Baltin, senior vice president of PKF Consulting in Los Angeles, which tracks the hotel market. “Tarsadia knows how to reposition hotels.”

The sale reportedly was shared with 


The Sutton Place Hotel
4500 MacArthur Blvd.
Newport Beach, CA 92660
startled employees last week by Charles Woo, president of Sutton Place Grande Hotels and a Newport Coast resident. It also surprised a few other hotel investors, who said Ho had unsuccessfully been approached several times about a sale.

The hotel sits on leased land on MacArthur Boulevard at Koll Center Newport.

MacArthur 4500 LLC, an investment group that includes Lee Sammis Associates in Costa Mesa, owns the parcel.

All parties close to the sale declined to comment or did not return calls.

Some hotel brokers believe the Sutton Place would go for at least as much as the 403-room Hyatt Newporter, a similarly sized hotel also on leased land. The Hyatt Newporter was sold in 2002 for $35 million to San Clemente-based Sunstone Hotel Investors.

Last year the Radisson Newport—across MacArthur Boulevard from the Sutton Place, but with fewer rooms and amenities, was sold for $18 million.

Earlier this year, Arlington, Va.-based MeriStar Hospitality Corp. bought the 484-room Irvine Marriott for $92.5 million from a partnership that includes Philadelphia-based Cigna Corp. The Irvine Marriott has some 30,000 square feet of meeting space, versus about 20,000 square feet at the Sutton Place.

The average sale price for the 28 hotels sold in Orange County last year was $5.3 million.

Hotel occupancy and rates in OC have improved this year. Occupancy is 71.7% through June, up from 66.2% a year earlier, with the average room rate rising 3.3% to $114.46, according to PKF.

Sutton Place debuted in 1985 as part of the London-based LeMeridien hotel group, now owned by White Plains, N.Y.-based Starwood Hotels & Resorts Worldwide Inc. The hotel was sold in 1994 to Ho’s Sutton Place Grande Hotels, a group of five independent properties in the U.S. and Canada, including the Newport Beach location.

Tarsadia Hotels, which owns 14 hotels in Orange and San Diego counties, San Mateo and Las Vegas, reportedly presented its ideas for a thorough remodel during a meeting at Sutton Place last week.

Though details of the plan weren’t available, Tarsadia typically revamps its hotels after acquiring them. In some cases, it’s changed the hotel’s name.

Though Tarsadia owns several hotels under the Marriott flag, there already is a Newport Beach Marriott at Fashion Island and Newport Beach Marriott Suites on the Back Bay, so that flag might not be an option for Sutton Place.

Popular With GOP, Pilots

The Sutton Place Hotel once was the traditional gathering place for OC Republican Party election night galas and is known for its entertainment, summer lobster cookouts, Accents Restaurant and wine cellar dining room. Air France pilots made it their home away from home in the early- to mid-1990s and Michigan University fans in particular visited in droves when the school took part in the Rose Bowl.

The hotel also has hosted numerous local business conferences. Sutton Place generally is regarded as a high-caliber hotel, though it doesn’t have a full-service spa that has become almost mandatory for top ratings with Mobil Guide or the American Automobile Association.

It was one of the first hotels in Orange County to install wireless Internet connections in its public areas.

New hotels repeatedly have raised the bar on amenities now deemed mandatory for four- and five-star or diamond ratings. Some hotels decline to participate in those ratings if required upgrades would be costly.

Sutton Place holds a three-diamond rating from AAA but is not Mobil-rated. Hilton Checkers is Tarsadia’s highest-rated property, with a four-diamond and a three-star rating.

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Sandi Cain is a freelance writer and contributor to the Orange County Business Journal and meetings industry publications. She specializes in hospitality, tourism and travel. Cain holds bachelor’s and master’s degrees in education from Kent State University in Ohio, where she majored in social studies. A former high school teacher, she has written for niche-market sports publications in the U.S., England and Australia and formerly worked in both the printing and high-tech industries. A Cleveland, Ohio native, Cain hasbeen a resident of Laguna Beach since the late ’70s. She enjoys travel, gardening, reading and spoiling her three cats.
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Contact:
Sandi Cain
Laguna Beach CA
949-497-2680
scainado@earthlink.net

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