Embassy Suites Lake Tahoe sold to Tokyo-based firm
In an ironic sense of timing, the owner of Embassy Suites Lake Tahoe – the cornerstone of the Park Avenue project – missed by 24 hours reaping the rewards of South Lake Tahoe’s prized feature in the city’s major redevelopment plans.
The Hilton Hotel Corporation-managed property – operating under bankruptcy protection since May 1998 – was sold to a Tokyo-based firm Dec. 20, the day before Heavenly unveiled its $20 million, 138-car gondola.
Nonetheless, Ken Corporation, Ltd. – which has co-owned six other non-chain Embassy Suites hotels from Los Angeles to Chicago – has revamping plans of its own for a multi-million-dollar remodel at the Stateline location, company spokesman Max Saito said.
Under the same Embassy Suites name, the remodel will include renovating guest suites, meeting spaces and common areas in the 400-suite hotel, valued for its prime location.
“We thought this hotel had a healthy business, and the timing was good with the redevelopment project. The gondola finally happened,” the president of Ken Corp.’s Los Angeles-based real estate division said.
As most of Ken Corp.’s holdings are concentrated in Japan, Saito of KPI Realty Inc. is enthusiastic about the United States expansion of his company, employing 380 people worldwide before the buyout.
Saito declined to give the terms of the deal, including the amount of the sale and assumed debt.
Indeed, the Lake Tahoe resort will operate “debt free,” an issued statement read, touting the benefits of the 1972-established company’s financial stability.
“This is great day for us as a property, for the South Lake Tahoe redevelopment and for the entire South Shore,” Embassy Suites General Manager Simeon Miranda said in an issued statement.
“Unfortunately, the lender was not prepared to wait as long as we were,” former owner KOAR Tahoe Partners’ Vice President Tom Smith said of the hotel that opened in 1991.
The Pasadena-based division of KOAR, Inc. in Los Angeles, which will dissolve with the transfer of ownership, wanted to extend the financial note yet filed for Chapter 11 at the U.S. Bankruptcy Court in Los Angeles, the court records indicate.
But the lender, Mitsui Trust and Banking – also based in Japan – required more of a return on its $76 million investment, Smith said.
“(The Embassy property would) never be able to pay off the loan,” he said, adding that the value of the property had never increased.
“The problem was, there was too much of a dip in the first few years,” Smith said, referring to debt load.
What has increased is the hotel profitability, according to Embassy Suites Resort Director of Sales and Marketing Bill Cottrill.
“The myth is, oh, they filed for Chapter 11. They must be performing badly, when in fact, over the last (four) years, the property has been doing well,” he said.
The existing staff, consisting of 170 employees, will continue to service its guests.
“The property has an excellent reputation and staff, and we look forward to a long-term and successful relationship,” Ken Corporation President Kensuke Tanake said in an issued statement.
An owner representative from the new owner’s Los Angeles location is expected to check in with the AAA Four-diamond independent, privately owned hotel property.
Among Hilton and Doubletree hotels, the Embassy Suites chain, of which the Stateline location is not a part, is owned by Hilton Hotel Corporation.
The sale does not impact the Embassy Vacation Resorts location on Ski Run Boulevard.
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