|By Kimberly Pierceall, The Press-Enterprise, Riverside, Calif.
Knight Ridder/Tribune Business News
Nov. 8, 2005 - The Embassy Suites Hotel in La Quinta is teetering on the brink of bankruptcy with $15.1 million owed and $3.4 million needed to open.
The hotel is almost finished, but since the Santa Rosa Plaza LLC development company first filed city applications in October 2000, the project has become a money pit.
The cost has reached $71 million to build 142 condos and the 146-room hotel, said Santa Rosa Plaza's Daniel Brown, the hotel's developer.
"We're still hopeful once funding is achieved we could be open in 30 to 35 days," he said.
The hotel and condo project sits on 15 acres at the corner of Desert Club Drive and Calle Tampico, across from Old Town La Quinta. The land has two separate deeds, both in foreclosure.
A foreclosure sale originally slated for Wednesday and postponed until Dec. 2 would have affected 2.4 acres nearby that accounts for $1.35 million of the debt, said Lantson E. Eldred, an Indian Wells lawyer whose company, Equivest, originally invested in the loan to Santa Rosa Plaza.
The planned six-story structure was scaled back to four stories after city residents complained. The hotel is a year behind schedule.
"We had always hoped they would file bankruptcy, and the bank would take it over," said La Quinta Mayor Don Adolph.
Earlier this year, Brown asked the city for $5.9 million in redevelopment funds to finish the project but, according to Adolph, the city needed a better guarantee on its investment.
If Wednesday's foreclosure sale on the courthouse steps hadn't been postponed, bankruptcy would have been the likely next step, Brown said.
"If people can't sit down and accomplish their goals separately, bankruptcy seems to bring people together," he said.
Since January, more than 60 liens have been filed against Santa Rosa Plaza LLC, including a federal-tax lien from the IRS for $29,167.56 in unpaid employment taxes.
The hotel project also is being sued for breach of contract and money due. Santa Rosa Plaza LLC owes $240,000 to Figueroa Enterprises, which supplied drywall and plaster for the project, according to a July lawsuit.
The Otis Elevator Co. also filed a suit in August for $180,893 in unpaid materials, and United Rentals Northwest from Oregon is seeking $106,653.04.
"Our goal is to finish and open this hotel," Brown said. "Would we like some help from the city? We would love some."
Developers behind the 146-room Embassy Suites Hotel in La Quinta are struggling to finish.
--Current debt: $15.1 million
--Cost of the hotel: $36 million
--Cost of the total project: $71 million
Source: Santa Rosa Plaza LLC and Riverside County records
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