Crescent will hold a 30% interest in the management company and a 93% interest in the investment partnership, while the Varma�s will hold the remainder.  The objective of the new companies, which will be based in Northern California, is to acquire, develop and manage a collection of unique and irreplaceable luxury spa resorts and hotels and operate them under the �Sonoma Spa Resorts� brand and concept. In addition, Sonoma Management Company, the new companies� management arm, will provide management services for certain assets in Crescent�s existing portfolio of destination resorts, day spa operations and business-class hotel properties.

Included in Crescent�s existing portfolio to be operated by Sonoma Management Company are two of the most successful destination resort properties in Northern California: 

Sonoma Mission Inn Spa and Country Club, which Gourmet magazine rated the �best resort and spa in the U.S.� for three consecutive years. Established in the heart of the wine country in 1927 and nurtured by California�s richest natural thermal hot springs, it offers a true European spa experience. Since it�s acquisition in December 1996, Crescent has invested $50 million in its acquisition of the Golf Course, the addition of 60 luxurious suites, a 15,000 square feet expansion of the spa, and an upgrade of the entire property.
 

The Ventana Inn Spa in 250 acres of pristine wilderness, 1,200 feet above the Pacific. Selected as �the #1 small hotel in North America� and �the #2 small hotel in the world� by Travel and Leisure magazine, and as �the #1 hideaway/escape�tops for pursuits and pleasures� by Gourmet magazine. The newly renovated luxury resort recently added a full service �Allegria� spa to its amenities.   John C. Goff, President and CEO of Crescent, stated, �We are very excited about our continued relationship with Sanjay and Johanna Varma in this new venture and are confident that together, we will create a highly successful resort investment and hospitality management company. Their past track records along with their backgrounds in the

The Ventana Inn Spa Located on the hillside overlooking the dramatic Big Sur Coast and the Pacific, and situated on 240 acres of undisturbed meadows, Ventana offers 59 rooms and luxury suites, pools, saunas and spa divided among twelve separate buildings, designed by the architect to blend seamlessly into the natural surroundings.

Mr. Varma has now transitioned from his position as Executive Vice President and Chief of Corporate Operations of Crescent. Prior to joining Crescent, he served as Executive Vice President of Walt Disney Company for eight years and before that as Area Vice President of Food Beverage for Marriott International Inc. for eight years. He began his career with Oberoi Hotels in Asia and the Middle East in 1972.

Mrs. Varma has now transitioned from her position as President of the Hospitality Division of Crescent Operating, Inc., (Nasdaq: COPI), where she has been involved in the day-to-day management of all Crescent owned resort and hotel properties since acquisition. Prior to her employment with Crescent Operating she worked for the Walt Disney Company from 1988-94 as Director of Operations and Human Resources for the EuroDisney Resort in Europe. She also worked for over 14 years for Marriott International Inc. in various capacities, including hotel General Manager, corporate Director of Human Resources for Europe and the Middle East, and as Vice President of Operations for Senior Living Services.  In addition to the management of the two premier spa resort properties, the Sonoma Management Company will continue the asset management of the following hotels and resorts owned by Crescent: Four Seasons, Houston, Texas; Hyatt Albuquerque, Albuquerque, New Mexico; Marriott City Center, Denver, Colorado; Omni Austin, Austin, Texas; Renaissance Greenway Plaza, Houston, Texas.
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