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San Diego's U.S. Grant Hotel to Close During $26 million
 Renovation; Expects to Re-open in Six Months as
 Member of Starwood's Luxury Hotel Collection
By Michael Kinsman, The San Diego Union-Tribune
Knight Ridder/Tribune Business News

Dec. 21, 2004 - With the scope of its renovation more sweeping than first anticipated, the U.S. Grant Hotel said yesterday it will cease operations for about five months starting Jan. 31 and lay off up to 212 workers.

The Sycuan Band of Kumeyaay Indians, which purchased the downtown San Diego landmark in December 2003 for $45 million, said the hotel's renovation now is expected to cost $26 million, far more than the $10 million it forecast in April.

"We'll be stripping everything back to its bare bones," said Adam Day, Sycuan's director of public affairs. "We're doing that to bring the hotel back to its original glory."

For several months, Sycuan has been working on the U.S. Grant renovation with Starwood Hotels & Resorts Worldwide with an eye toward adding the hotel to Starwood's Luxury Hotel Collection.

Sycuan did not originally intend to close the hotel but decided it was in the best interest of safety and security.

"No one wanted to close down the hotel, but ownership and management had many concerns about the safety of our guests and hotel workers," said Michael Gallegos, president of American Property Management Corp., the hotel's operator. "Not only would there be worker safety issues from the construction, but there might be airborne contaminants that would affect our guests. We decided it was best to close the hotel down for a short period."

While there are no plans to change the hotel structure, renovations are planned for all 273 guest rooms, the lobby, restaurant and meeting rooms, Day said. Among the renovations will be new wall coverings, paint, carpets, linens, furniture and fixtures.

The hotel is aiming to reopen by July 4.

Day said Starwood signed off on the renovation plan yesterday.

"Starwood has an exclusive list of hotels in its luxury collection," said Robert Rauch, director of San Diego State University's Center for Hospitality & Tourism Research. "I think the hotel operators probably underestimated what they needed to do to join that collection."

Starwood's Luxury Hotel Collection includes 65 hotels in North America, Latin America, Europe, Asia, the Pacific, Africa and the Middle East. Starwood also operates hotels under the Sheraton, W and Westin brands.

Joe Terzi, Starwood's highest-ranking executive in San Diego, was unable to be reached for comment late yesterday.

Most of the hotel's 230 workers will be laid off, although some may find work at other businesses operated by Sycuan or AMPC, Gallegos said.

"We are very concerned about helping those employees any way we can," he said. "We will assist them in a number of ways in trying to find new jobs and when the hotel reopens, they will be first in line for jobs. However, we undoubtedly will lose some very fine workers to other hotels in San Diego."

The hotel's maintenance and engineering workers and sales staff will be retained during the closure, Gallegos said.

Gallegos began notifying workers last night of the shutdown plan and said the hotel would continue to pay for health and life insurance benefits until they find new jobs.

Originally opened in 1910 by the son of President Ulysses S. Grant, the San Diego hotel has played a prominent role in downtown San Diego.

Through the years, it hosted presidents such as Warren G. Harding and John F. Kennedy and assorted VIPs such as columnist Walter Winchell and actor Clark Gable.

Yet, the once stately hotel fell into disrepair in the 1960s and was nearly demolished in the 1970s. Former San Diego developer Christopher Sickels invested nearly $90 million to restore the hotel in the 1980s, but burdened by financial pressures from that renovation, he sold the hotel to Japanese investors in 1989.

The hotel has been through several owners since, the latest when Sycuan purchased the property last December.

The tribe said it had a special connection to the hotel because it was President Grant who signed an 1875 executive order that set aside land for the Kuymeyaay, including the Sycuan reservation in East County.

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