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Ownership Turmoil Now History as the Four Seasons Resort at
 Las Colinas Nears Completion of a $60 million Renovation

By Karen Robinson-Jacobs, The Dallas Morning NewsMcClatchy-Tribune Regional News

October 03, 2010 --IRVING -- The newly shorn bentgrass at the 18th hole stood taut and lean, awaiting the next golfer.

Yards away, inside the kitchen at Four Seasons Resort and Club, a pastry chef crafted chocolate and peppermint into a stadium scene complete with a football and Cowboys star. The confection will be perfected in the months leading to Super Bowl XLV, when the Four Seasons will be booked solid for the better part of a week.

The combination of everyday activities and future focus has helped the roughly 700 workers at the expansive resort weather a withering spate of publicity that usually began with the phrase "largest local hotel foreclosure in years."

It's a dubious distinction, indeed, acknowledged general manager Michael Newcombe. But it's so yesterday.

With next year's bookings up and a $60 million renovation nearing completion, the hotel is preparing for a more celebratory season.

"Even in her darkest days ... the resort was profitable and guest service was unaffected," said Newcombe, a "pragmatist" who has run the 400-acre property for four years. "If there's any change I would like to make, it's the perception in the local market that this had a deeper influence on the way we did business than it did. That is a chapter in the resort's history that is now closed."

It's a chapter that began last November, when Los Angeles-based BentleyForbes missed a mortgage payment on the resort known worldwide for hosting the annual HP Byron Nelson Championship professional golf tournament.

At the time, an attorney for BentleyForbes described the missed payment as a tactic designed to "get the attention" of the lender. It did, but not with the desired results.

The property -- once saddled with $214 million in mortgages -- was "sold" to the lender at a foreclosure auction in June for $122 million.

Four Seasons is now owned by 4150 North MacArthur Boulevard Holdings, a limited partnership that is owned by a mortgage-backed security trust. Washington, D.C.-based CWCapital Asset Management calls the shots on behalf of the trust.

Four Seasons' contract to manage the property was extended in 2007 and runs through 2082. That 75-year contract, experts said, means the resort won't be forced to start buying flowers at the nearest day-old mart.

"The Four Seasons is a standard in the hotel industry in terms of how they set up their management contract, regardless of who owns the property," said Steven Carvell, associate dean for administrative affairs at Cornell University's School of Hotel Administration.

"I would be amazed if the average person ... would see any difference at all. If it were a midpriced resort, you might expect to see some of the amenities be pushed away by the new owner. For the Four Seasons, that simply can't happen."

The hotel clearly has appeal beyond the average person. Actor John Travolta is a regular visitor when he travels for pilot simulator training at Dallas/Fort Worth International Airport. Jordan's King Abdullah II stayed there earlier this year when he visited George W. Bush.

One of the first orders of business for the new owner was approval of about $2 million to finish renovating about 40 guest rooms and upgrading meeting space at the Four Seasons, the only AAA-rated Five Diamond resort in the state.

While title to the property was in abeyance, armoires sat in storage. Now, Newcombe said, the work is on track and should be done by mid-December.

The new owner's speedy signoff on the upgrades is a good sign, said Michelle Russo, president of Hotel Asset Value Enhancement. Her Providence, R.I.-based company serves as "asset manager," essentially a liaison between Newcombe's crew and CW Capital.

"These owners are committed to reinvesting in the property and improving the revenue at the hotel ... so that at some time in the future they might evaluate a sale," she said.

Earlier phases of the renovation, funded by BentleyForbes, included the addition of 34 villas with suites just off the No. 1 fairway of the Tournament Players Club golf course, where a smiling bronze of Texas native Byron Nelson keeps watch. The villas, which opened last summer, boosted the resort's room inventory to 431. (It launched in April 1986 with 307 rooms).

The TPC golf course -- one of two courses on the property -- was redesigned by PGA Tour professional D.A. Weibring and noted golf course architect Steve Wolfard.

In the resort's expanded lobby, mirror-smooth granite floors in shades of sandstone sweep past the signature center floral display of orchids, artichokes and calla lilies. In the adjacent lounge, teal velvet banquettes host impromptu gatherings, and brocade drapes frame oversized windows with views of the pool.

"For us, the majority of the resort is almost brand-new," Newcombe said. "Every drape is new, every chair is new, and the hotel sparkles."

Next year "is the first full year with everything renovated and it's Super Bowl year," he said. "We think we have a great opportunity to have a record-breaking year."

Group business, which represents nearly two-thirds of all rooms sold, is already up 20 percent over last year, Newcombe said. "So we're really excited."

Russo, meanwhile, is strategizing. Her task is to swell top-line revenue for the resort -- the largest North American property for the Toronto-based Four Seasons brand.

Revenue this year for the Las Colinas property is expected to be $65 million from all sources, including 35 percent from food, drink and catering; 33 percent from guest rooms; and 22 percent from memberships at its fitness, tennis and golf clubs.

This year's take is essentially flat to 2009's but down 17 percent from the $78 million tally in 2008, when the room count was lower for part of the year.

Part of that dip clearly is the wrath of the recession, which tore into the luxury market with a particular vengeance.

For Four Seasons and other local luxury properties, occupancy rates saw back-to-back drops, slipping 8.8 percent in 2008 and 10 percent last year, according to Smith Travel Research.

Last year, the average daily room rate for the luxury group lost 13 percent to $183 a night, the research firm said. A standard room with no group discounts cost $275 a night this weekend at Four Seasons.

Of the 40 Four Seasons locations in the Americas, BentleyForbes was the only one of 24 owners to go into foreclosure, said Craig Reid, Four Seasons' senior vice president of operations and former general manager of the Las Colinas location. A Four Seasons in the Caribbean that had closed after a storm last year also went into foreclosure, he said.

BentleyForbes executives were not available for comment for this article.

Other Four Seasons properties "have had either a default on loan payments and looked for the opportunity to refinance ...or been late on their payment," he said, citing examples in Maui and San Francisco.

Russo thinks something else also affected sales.

"This whole foreclosure thing just clouded how much capital improvement had been put into this property by the former owner," she said, citing the market's understated reaction to the golf course renovations. "It doesn't seem like it got the pop it should have, even given the economic downturn."

As word flowed out about the past owner's financial woes, a second stream gathered force, this one offering enough gossip and innuendo to fill an episode of Dallas.

"There were rumors in the market that the hotel was going to close," Russo said. "Competitors have definitely leveraged the typical person's perception that the service levels are cut to the bone. That's another challenge that hopefully [will pass] with the stability of the new ownership [and] with the foreclosure behind the hotel."

The hotel had one wedding cancel "due to the bride's parents being nervous," said spokeswoman Angela Enright, adding that "our weddings business was likely impacted due to nervous brides."

The resort expects to do 60-plus weddings this year and 75 next year. Weddings bring in about 1,200 room nights a year, she said. That's small compared to the 100,000 room nights the resort expects next year -- a record.

In contrast, Reid noted that the 1,700 members in the three sports clubs "are there on a weekly basis. They have an expectation of excellence," he said. "They're the best gauge as to ... whether our commitment to excellence continues, and we're getting a resounding 'yes' from them."

"The ongoing operating experience: mowing the grass, the quality of the flowers in the lobby, the quality of the coffee. We control all of those things," Reid said, "and we manage them to a luxury level."

9.5 feet Height of golf legend Byron Nelson's bronze statue

56 People who work full time maintaining the landscape and courses

380 Acres devoted to golf courses and grounds

34,000 Square feet of meeting and ballroom space

1.1 million Estimated cups of coffee served a year

$10 million Cost to redesign its Tournament Players Club golf course.

SOURCE: Four Seasons Resort and Club


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