Hotel Online Special Report
---
Patriot American Hospitality, Inc. Restructures Lease Relationship with NorthCoast Hotels
 
DALLAS - Dec. 3, 1998 - As part of its ongoing strategy to divest of certain owned assets that are not eligible for conversion to one of its core proprietary brands, Patriot American Hospitality, Inc., whose shares (NYSE:PAH) are paired and trade with those of its operating company, Wyndham International, Inc., today announced it has completed the restructuring of its relationship with one of its independent lessees, NorthCoast Hotels, LLC, such that NorthCoast will no longer be a lessee of any of Patriot American's hotels.

As part of the restructuring, NorthCoast purchased the 145-room WestCoast Gateway Hotel and the 151-room WestCoast Roosevelt Hotel in Seattle, as well as the 147-room WestCoast Wenatchee Hotel in Wenatchee, Wash. In addition, Altamont Properties, an affiliate of one of NorthCoast's principals, closed the 195-room WestCoast Long Beach Hotel in Long Beach, Calif., into escrow pending receipt of certain approvals from the City of Long Beach, which are expected next month. Finally, Patriot American acquired NorthCoast's leasehold interest at six hotels: the Hyatt Newporter in Newport Beach, Calif.; the Pickwick Hotel in San Francisco; the Plaza Park Suites in Seattle; the Hyatt Lexington in Lexington, Ky.; the Valley River Inn in Eugene, Ore.; and, the Park Shore Hotel in Honolulu, Hawaii. Patriot American will realize net proceeds of $33.5 million after funding the purchase of NorthCoast's leases, of which $8 million will be in the form of secured notes. Proceeds from these transactions will be used for general working capital purposes, which includes the strategic conversion of certain of Patriot American's owned assets to its proprietary brands.

The purchase of the leaseholds from NorthCoast serves a number of different purposes, according to Paul A. Nussbaum, chairman and chief executive officer of Patriot American. At the Pickwick Hotel and Plaza Park Suites, the lease repurchase also includes the buy-out of management contracts with NorthCoast's affiliate, WestCoast Hotels. As a result, the Pickwick Hotel will become a Wyndham Grand Heritage Hotel, while the Plaza Park Suites will be converted to Wyndham's Summerfield Suites brand. At the Park Shore Hotel, which will continue to be operated by WestCoast Hotels, Patriot American and NorthCoast will each contribute $2 million for renovations to enhance the property's competitive position in Honolulu. Finally, the lease purchase also will pave the way for the sale of the Valley River Inn and the Hyatt Newporter as part of the Company's previously announced sale of non-core assets to Paine Webber Real Estate Securities, Inc. The Hyatt Lexington will continue to be owned by Patriot American and managed by Hyatt.

According to Karim Alibhai, president of Wyndham International, Inc., the divestiture of the assets being sold underscores the Company's commitment to focus on broadening the distribution of its core brands. "The properties we have sold to NorthCoast are mature, quality assets that we were proud to have had in our portfolio.

However, due to long-term management agreements and other constraints already in place, the majority of these assets were not eligible for conversion to our proprietary brands and, as such, we decided it was in our best interests to divest of the assets, generating proceeds that can be directly applied to the growth of our core brands through improvements to, and conversions of, many of our other existing owned assets," he said.

About Patriot American Hospitality, Inc. and Wyndham International, Inc.

Based in Dallas, Patriot American Hospitality, Inc. (NYSE:PAH) is currently the nation's second-largest hotel real estate investment trust (REIT) with a portfolio comprised of 487 owned, managed, leased or franchised hotels and resorts with more than 105,000 rooms. Its paired operating company, Wyndham International, Inc., comprised of the Grand Bay Hotels Resorts Division, the Wyndham Hotel Group, the All-Suites Division and PAH Management Services, leases, manages and franchises primarily upscale and luxury hotel and resort properties represented by its proprietary brands and provides management services for third-party owned hotels and resorts.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company's actual results could differ materially from those set forth in the forward-looking statements. Certain factors that might cause such a difference include competition for guests from other hotels, dependence upon business and commercial travelers and tourism, the seasonality of the hotel industry, and availability of equity or debt financing at terms and conditions favorable to the Companies and other factors detailed in the Companies Quarterly Report on Form 10-Q dated June 30. 1998, Current Report on Form 8-K dated November 9, 1998, Registration Statement on Form S-3 (File No. 333-58705) and Registration Statement on Form S-3 (File No. 333-65339).

###
 
Contact:
Patriot American Hospitality, Inc., Dallas
Media Inquiries:
Suzanne Cottraux, 
V.P. of Corp. Comm. and Public Affairs
214/863-1258
or
Analyst Inquiries:
Paul Keung,  V.P. of Finance, Investor Relations
214/863-1265
 --
 
Also See: Patriot American Hospitality Unveils a New Hotel Division: Grand Bay Hotels and Resorts / June 1998 
Patriot American Hospitality and Wyndham International to Acquire Summerfield Hotel Corporation / March 1998 
Patriot American Hospitality, Inc. To Acquire WHG Resorts Casinos Inc./ Sept 1997
Patriot American Hospitality, Inc. Completes Acquisition Of Arcadian International PLC / April 1998
Patriot American Hospitality, Inc. Divests of Hotels Not Candidates for Conversion to Wyndham Brand / Divestiture Transactions Totals $206.5 Million / Nov 1998 

To search Hotel Online data base of News and Trends Go to Hotel.Online Search
Back to Hotel.Online Press Releases
Home | Welcome! | Hospitality News | Classifieds | Catalogs & Pricing | Viewpoint Forum | Ideas/Trends
Please contact Hotel.Online with your comments and suggestions.