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North Bay Business Journal

Monday, January 7, 2013, 7:00 am

Meritage hotel owner buys land for expansion

Another $5 million in room renovations set for late ’13

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    Map of Napa Valley Commons northwest of the junction major valley thoroughfares showing The Meritage Resort & Spa and the new property to the north.

    NAPA — The owner of The Meritage Resort & Spa has purchased land across the street as part of a plan to enhance the experience for the tens of thousands of visitors the recently expanded 323-room facility brings to Napa Valley each year.

    Less than a year after completing a roughly $40 million expansion that about doubled the number of rooms and brought the amount of meeting space to more than 50,000 square feet, an affiliate of Irvine-based Pacific Hospitality Group purchased 9.3 acres of vacant land directly to the north and plans to invest about $5 million late this year renovating the resort’s original rooms, finished nearly seven years ago.

    The land at the northeast corner of Bordeaux Way and Napa Valley Corporate Drive was purchased from a fund managed by Irvine-based LBA Realty on Dec. 28 for an undisclosed amount. LBA Realty acquired the property in 2006 by purchasing Bedford Property Investors, which was the original developer of Napa Valley Corporate Park, recently renamed Napa Valley Commons.

    Pacific Hospitality wanted to preserve the resort feel of The Meritage and adjoining Vina Bello Resort, a 182 luxury condominium development owned by Shell Vacations, and prepare for expansion, according to Kory Kramer, Pacific Hospitality vice president for acquisitions and development.

    “We didn’t want some other group buying the land across the street and building something not related to a hotel,” he said. “We didn’t want industrial buildings across the street.”

    The company brought in Santa Monica-based hospitality design firm Kay Lang & Associates, which also is planning the room remodel this fall, to help come up with concepts for what could go on the newly acquired property. Based on projected needs, the expansion concept includes more conference and meeting space, possibly more guest rooms and additional parking to accommodate cars typically lining Bordeaux Way during large events.

    One idea for the expansion is some sort of food-and-wine education and experience, according to Mr. Kramer. Potentially, that would include a collective tasting room featuring The Meritage’s wine brand, Trinitas Cellars, currently poured for visitors in a tasting venue that’s part of a 22,000-square-foot cave constructed in the hillside behind the hotel, as well as brands by producers based elsewhere in Napa Valley Commons. Other producers in the corporate park are Patz & Hall, Falcor Wine Cellars, Ca’Momi, Fior di Sole, Robert Mondavi, and J. Lohr, some of which have their own tasting venues.

    “Part of the experience of coming to wine country is wine and food,” Mr. Kramer said.

    In addition to the added meeting space, The Meritage has 15 acres of winegrape vines, a spa in the cave, restaurants and cafes. Adding Vina Bello to the mix provides more than 500 rooms, making the property a formidable competitor for group bookings against San Francisco and Half Moon Bay hotels, according to Mr. Kramer.

    The Meritage pays several million dollars a year in transient-occupancy, sales and other taxes and brought 180,000 visitors to Napa Valley in 2012. Eighty percent of those guests were from the Bay Area.

    “I think it’s so great how bullish they are on Napa Valley,” said Clay Gregory, president and chief executive officer of Visit Napa Valley.

    The new acreage for The Meritage would need City Council approval for a Napa County Airport Specific Plan amendment to add a hotel overlay designation to allow for related uses such as guest rooms, meeting space, restaurants and wine tasting, according to senior city planner Kevin Eberle. The current zoning for the property is Industrial Park Area A.

    Pacific Hospitality has been in talks with city planning officials recently about plans for the property. The company plans to submit a project application to the city in March. The expansion may open sometime in 2015, given nearly a year and a half to build the recent expansion, according to Mr. Kramer.

    The renovation of 156 rooms originally in The Meritage when it opened in July 2006 is set to start in November and last two months. Pacific Hospitality aims to renovate its facilities every seven years, Mr. Kramer said.

    As the second expansion for The Meritage is in the works, 246-acre Napa Valley Commons has been getting an overhaul recently to set itself apart as more than its industrial park beginnings, according to Mr. Kramer, also president of the park’s owners association. Since a special district for the park was created a few years ago, the $790.91-an-acre quarterly assessment has gone toward sorely needed paving of roads, installation of piping to use reclaimed water for common-areas irrigation, saving hundreds of thousands of dollars a year, and new monument and street signage.

    A meet-and-greet for the park’s tenants and owners is planned for Jan. 26.

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