Five Star Resort in Foreclosure

Another sign of our economic slump has hit close to home for me. The St. Regis Monarch Beach, is only miles away from my office in Beverly Hills. It’s located in a cluster of super-luxury hotels such as the Ritz-Carlton Laguna Niguel and the Montage Laguna Beach. The hotel’s claim to fame is that despite the renown of surrounding resorts, it’s the only one to earn Mobile’s Five-Star rating.

According to the Los Angeles Times, “the companies that own the resort are in default on a $70-million loan from Citigroup Global Market Realty Group.”

If the debt can’t be managed, the hotel will be auctioned off on July 7.

The hotel recently received bad press when it hosted an AIG corporate retreat. The insurance giant paid $443,343 for the event after receiving $85 billion of federal bailout money.

Michael Mustafa, director of sales and marketing of the hotel recalls, “I was public enemy number 2 behind AIG. I had to listen to Joe the Plumber tell me, “Where’s my spa treatment, because I’m a taxpayer paying for AIG.” That was the worst week of my life.”

Business dipped 20% after the event that became a feeding ground for the media looking for a story to highlight the nation’s economic slump.

The St. Regis isn’t the only luxury hotel in trouble. The Times also reported that the keys to the W Hotel in San Diego are being turned over to its lenders. And even closer to home, on Los Angeles’s Palos Verdes Peninsula, there’s the $8.2 million bailout of the Terranea Resort.

The Rancho Palos Verdes city council agreed to rebate $8.2 million of hotel tax revenue for the next 27-months. The hotel said that it needed the money to operate once its doors open, which is scheduled to happen today.

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