Hotel Online News for the Hospitality Executive The Palm Springs Marquis Hotel Closes, No Buyer at Auction By Adam Eventov, The Press-Enterprise, Riverside, Calif. Knight Ridder/Tribune Business News
Jan. 9, 2002 – PALM SPRINGS, Calif.–A major hotel in downtown Palm Springs has closed and is up for sale.
The Palm Springs Marquis Hotel reverted to bank ownership after an auction Friday failed to produce a buyer for the long-struggling resort. As a result, more than 70 hotel workers must find jobs or wait until a buyer reopens the hotel.
Some of the employees showed up to work on Jan. 2 only to discover that the hotel was closed. They were later escorted out by security guards, according to hotel union officials.
“It was a big shock for everybody,” said Linda Gamberg, secretary-treasurer for the Hotel Employees and Restaurant Employees Union Local 309.
The hotel was offered at auction for $10,270,804 by real estate auction house Fidelity National Agency Sales. When no one entered a bid, trustee LFS Real Estate Service of San Diego began processing the foreclosure.
“Our ultimate goal is to find a suitor and reopen the hotel,” said Jack Brittain, executive vice president of Valley Independent Bank, which held the loan on the 165-room hotel.
After the bank took over the hotel on Friday, the Riverside County Office of the Treasurer posted a security guard and seized the property, according to county Treasurer Paul McDonnell.
The hotel owes the county $715,000 in back taxes, McDonnell said. The treasurer seized the hotel to get assurances from the bank that the county would get paid.
The hotel sits on Indian land. If the bank sells to the Agua Caliente Band of Cahuilla Indians, considered by the government as a sovereign nation, the county wouldn’t be able to collect, McDonnell said.
Bank officials met with McDonnell and agreed that the county would get paid no matter who bought the hotel, the treasurer said.
The hotel sits on 3.5 acres of downtown Palm Springs real estate on the southwest corner of Indian Canyon Drive and Tahquitz Canyon Way. It is near the convention center and the site of the planned $90 million Spa Resort Casino expansion.
Former owner Mark Bragg estimates the hotel is really worth about $20 million because of its 28,000 square feet of meeting space and 400-space underground parking structure — almost as much meeting space as hotels with twice the number of guest rooms.
While the tribe does not plan to buy the hotel, according to Tom Davis, planner for the Agua Calientes, tribal members are considering a bid.
During the auction, tribal member Dana Prieto said his company, Creosote Partners, is considering a bid for the hotel, Gamburg said. Prieto could not be reached for comment.
The former employees planned to meet with the bank on Wednesday to learn the status of the hotel’s sale, she said.
“They know the business and are willing to fight to save their jobs,” Gamberg said.
Even with their experience, this is a tough time for the former Marquis workers to find jobs at other hotels, Gamberg said. Most seasonal positions have already been filled.
Bragg bought the hotel in 1997 and relied on Arizona-based International Conference Resorts to manage the property. That company changed the hotel’s name to Palm Springs Conference Resorts, a move that caused confusion among its clientele, Bragg said.
During that time, the hotel lost roughly $2 million a year. In 2000, Bragg took over its management and changed the name back to the Marquis. Despite efforts by the bank and Bragg to turn the hotel around, the terrorist attacks of Sept. 11, 2001, crippled both the travel industry and the hotel’s comeback. Bragg filed for bankruptcy protection March 15.
—–To see more of The Press-Enterprise, or to subscribe to the newspaper, go to http://www.PE.com
(c) 2003, The Press-Enterprise, Riverside, Calif. Distributed by Knight Ridder/Tribune Business News.