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News for the Hospitality Executive

Wichita Based LogeWorks LP Planning $19 million
 Sierra Suites Hotel in Long Beach, California

By Don Jergler, Press-Telegram, Long Beach, Calif.
Knight Ridder/Tribune Business News

Nov. 9, 2004 - LONG BEACH, Calif. -- Businesses in the Pike at Rainbow Harbor are stoked about the possibility of a hotel opening up in the entertainment and shopping center, where a lag in customer traffic has caused some worry.

A 60-year lease has been signed for the Sierra Suites Hotel at the Pike, setting the stage for construction of a 140-room all-suite, seven-story hotel with a roof-top pool at a cost of up to $19 million.

Work on an environmental impact report is expected to begin later this week, with a traffic impact study to follow. The project must meet city approval, and be approved by the California Costal Commission.

"Our hope is that we could break ground sometime in late 2005," said Chris Gebert, senior vice president of Wichita, Kan.-based LogeWorks LP, which owns and operates dozens of Sierra Suites across the country.

It's estimated the project would take nine months to complete. Gebert declined to disclose the lease costs for the hotel. Room rates are expected to average between $159 and $229.

LogeWorks executives approached Pike owner Developers Diversified Realty more than a year ago, and have been in negotiations on the deal for the past three months, Gebert said.

The hotel site -- it's bordered by Seaside Way, Bay Street and Cedar Avenue -- is a vacant parcel across from the Pike parking structure, according to Gebert.

Proximity to the Long Beach Convention center, low-vacancy rates at downtown hotels, and nearby tourist attractions and shopping and dining opportunities make the spot ripe for a hotel, Gebert said.

He noted that the Pike is near the water, and has several well-known restaurants, as well as entertainment facilities like GameWorks and a theater.

Some Pike tenants have expressed concern about the lack of customer traffic and retailers at the center, but were decidedly upbeat about news of the hotel project.

"I love it," said Jay Tilles, who owns Long Beach Clothing Co.

One of the few retailers in the Pike, the store features about a dozen clothing brands with ties to Southern California, including a line with the city's name and clothing bearing the logo of the World Famous KROQ, where Tilles works as "Lightning," producer of the Kevin & Bean morning radio show.

"All (hotel guests) have to do is look at the window, and they're sold," Tilles said. "And if it goes in, that hotel would be within 75 yards of my front door." GameWorks executives say having a hotel as a neighbor would boost group sales, which so far have been a mainstay for the combination arcade, restaurant and bar.

The GameWorks in the Pike is noticeably busier during conventions, said Clint Manny, senior vice president for sales and marketing for the Glendale-based chain.

Because of group bookings at GameWorks, "we're slightly above expectations," he added.

Few mixed-use malls, referred to in the industry as "lifestyle centers," include hotels as a component, though this may the next evolutionary step in the fledgling lifestyle concept, industry watchers say.

"We're beginning to see the lifestyle center concept evolve to include things like a hotel," said Patrice Duker, a spokeswoman for the International Council of Shopping Centers.

Out of the 120 lifestyle centers in the U.S., few Duker could name include a hotel, but she said such centers have begun including concepts during the last five years, like large department stores and high-end supermarkets.

"We are thrilled to announce the transaction with Sierra Suites," Dan Hurwitz, DDR's executive vice president, said in a statement. "It's another positive step in the direction of the Pike."

The plan for the hotel is to use the nearby 2,200-space structure for parking, where many lots remain open because of slow customer traffic, something that may force the city to fork out a $1.1 million payment toward a bond for the Pike garage due in May under an agreement with the developer.

However, city officials say parking revenues at the Pike have been going up, a possible sign of increased public interest.

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(c) 2004, Press-Telegram, Long Beach, 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

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