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The 204 room Hilton Monterey Reportedly Sold for More
 than $20 million; MeriStar Hospitality
 Selling to Ocean Park Hotels


By Victoria Manley, The Monterey County Herald, Calif.
Knight Ridder/Tribune Business News 

May 25, 2005 -- Hilton Monterey is being sold to a Southern California company whose top executive comes from Carmel. 

The 204-room hotel off Highway 1 on Aguajito Road is a leading property for the Monterey Peninsula's tourism industry. 

Terms of the sale to Valencia-based Ocean Park Hotels Inc. Ñ expected to close Thursday were not disclosed, but those close to the industry say it was reportedly for more than $20 million. 

Aside from a $5 million renovation plan set to begin in October, no major changes are planned after the sale, said James Flagg, Ocean Park Hotels president. "This is a chance to renew old acquaintances and return to the place that I consider home." 

Flagg, of Arroyo Grande, was raised in Carmel and is a 1974 graduate of Robert Louis Stevenson School in Pebble Beach. He said he's been interested in obtaining a Peninsula hotel since he started his business in 1999. 

The Hilton name will remain as part of the deal. Ocean Park Hotels also will keep the property's 100 or so unionized employees, he said, but is expected to replace management with its own. 

Among those who stand to lose their jobs is John Lloyd, Hilton Monterey's general manager for more than a decade. Rob Gauthier, Ocean Park Hotels' executive vice president in charge of hotel operations, will serve as manager until a replacement is hired. 

Flagg will visit the property today to meet employees, as will Leonard O'Neill, an officer of Local 483 of the Hotel Employees and Restaurant Employees union. 

O'Neill said the union "looks forward to working with the new owner." 

"Our relationship is already off to a good start," he said, because Flagg has agreed to recognize the union's existing contract with the hotel. 

Flagg, a member of Stevenson School's Board of Trustees, said he visits the Peninsula monthly. His family founded the Lou and Lori Flagg Awards of Excellence in Teaching, administered by the Community Foundation for Monterey County, which were named after Flagg's younger sisters, who were killed in a 1975 car accident. 

Ocean Park Hotels is relatively small compared to seller MeriStar Hospitality, a hotel real estate investment trust that owns 73 hotels nationwide. It owns 10 hotels in California and Arizona, and operates another two properties. It also has three hotels under construction Ñ two in Thousand Oaks and another in Valencia Ñ as well as five more planned for development throughout California. 

The hotel has changed ownership at least four times since it was built in the 1970s, including a one-time ownership to a Virginia limited partnership that went bankrupt in the mid-1980s. 

Hilton Monterey is a strong competitor with other large Peninsula hotels for guests employed by the U.S. government who are visiting nearby military installations, such as the Naval Postgraduate School. It also works cooperatively with the Monterey Convention Authority on marketing efforts to groups, said Carl Anderson, the city's public facilities director. 

"They have been a good partner in the past," he said. 

Anderson said Hilton "is an important property in Monterey," and that its name will remain "is encouraging." 

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To see more of the Monterey County Herald, or to subscribe to the newspaper, go to http://www.montereyherald.com.

Copyright (c) 2005, The Monterey County Herald, Calif.

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com. HLT, 


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