The Colony Beach and Tennis Resort on Florida’s Longboat Key announced this week that the resort will close on Sunday, September 27, 2009. Water and power will be shut off to the 237 condo hotel units, the pool will be closed, housekeeping will cease, tennis courts will be inaccessible, and there will be no front desk service or maintenance services. The only exception will be the resort’s restaurant and a few units owned by members of the Klauber family, which took over the resort from original developers in 1972.
Aerial view of the Colony Beach and Tennis Resort
Each of the units were originally sold as fractional ownership, with owners buying a 1/12 share that allowed them to use the units for 30 days each year. Time not used by owners was placed in a pool and rented to the general public by the resort management company, which was paid a management fee by the condominium association. Over the years, the management company spent millions of dollars to maintain and restore the facilities of the resort. In better times, the firm apparently Read More »
It’s not a good time to open a new luxury hotel, but the 582 room Terranea in Rancho Palos Verdes, just outside Los Angeles, lasted all of 2 months before the ground caved in – the Terranea has gone into default with one of it’s lenders, and missed a chance to get a very essential tax rebate agreement from the City.
Terranea, Rancho Palos Verdes
The oceanfront luxury hotel and accompanying resort facilities – built on the former site of Marineland of the Pacific - opened it’s doors on June 12, 2009, built over a 10 year period by the Lowe Hospitality Group with a massive price tag of $480 million.
Terranea’s primary lender is Chicago based Corus Bankshares, a bank which is itself in serious danger of being taken into recievership by the FDIC. Corus has invested $180m in Terranea, but is now unable to offer any more financial support to the Terranea.
This financial muddle led to Terranea missing a deadline for enrolling into a tax rebate agreement with the City of Rancho Palos Verdes, for which it needed $12.5m. The agreement was apparently a very critical element of Terranea’s ability to remain financially viable, and it’s entire future is now at stake.
With $322 million in loans, struggling to keep it’s doors open due to lack of funds and support from it’s primary lender, the Terranea could quite possibly go into foreclosure, or be taken over by another entity.
The management says they’re talking to their remaining lenders – which includes Cascade Investment Co. which is controlled by Microsoft founder Bill Gates. Cascade has filed a notice of default because Terranea has not been meeting it’s payments.
Photo courtesy Destination Hotels & Resorts.
The auction of the landmark Watergate Hotel in Washington DC is generating a bidding frenzy amongst developers and real estate investors. Bidding starts at $1m on Tuesday at 10.15 am at the Wisconsin Ave offices of Alex Cooper Auctioneers.
Watergate Hotel in Washington D.C.
This historic hotel - located across from the Kennedy Center and half a mile from the Lincoln Memorial – now stands desolate and abondoned to the elements, another victim of the recession which has seen hundreds of hotels going into default and being foreclosed.
Monument Realty, the current owners, have left a $40 million loan hanging around the hotel’s neck, but that’s just one part of the screw-up. The owners shuttered the hotel in 2007, and were in the process of converting the Watergate into a luxury hotel/residency complex. This $100 million makeover plan came to a screeching halt when one of the financiers - Lehman Brothers – went bankrupt last year.
Richard Nixon leaves White House
The only saving grace is the hotel’s history and national landmark status. The Watergate Hotel is famed for being the place where the Watergate burglars snoozed in 1972 before breaking into and pilfering documents in the adjacent Democratic National Committee HQ office – a crime which implicated Richard Nixon and forced him to resign from the Presidency.
This historic status is attracting bidders for the hotel from all over – including local developers and international luxury hotel chains. Monument Realty purchased it for $45 million in 2004, but that figure now seems too high for the auction, which could end up anywhere between $20-30 million.
(Update: July 23, 2009 - The auction attracted 1 winning bid for $25m, and the Watergate is now owned by PG Capital - the lender who foreclosed the hotel in the first place.)
Watergate Hotel photo by tvol (creative commons). Richard Nixon photo by Ollie Atkins (public domain).