NAPA – The young, Southern California-based hospitality company that finalized the purchase of the Napa Valley Marriott late last month has already begun preparations for about $6 million in updates, including reconfiguration of the site’s entry, lobby and other areas.
The Lighthouse Lodging Group of Pacific Palisades announced the purchase of the 274-room Wine Country hotel May 28, closing the sale for $36 million in cash with partner Privet Investments of New York. Previous holder Sunstone Hotel Investors purchased the property in 1998 for $21 million and will use the sale’s proceeds for a recently completed debt buyback.
Lighthouse Senior Vice President of Sales and Marketing Mark Goeman said the hotel is the company’s largest purchase so far and was chosen for its potential for future growth. “In terms of answering why purchase now, the simplest answer is that it was listed for sale,” he said.
“We know the markets are depressed right now, but we liked where it is positioned in the marketplace and we see a healthy long-term growth. … We also saw the opportunity to buy at a really good price.”
Mr. Goeman said the company launched in 2007 has a general strategy of acquiring “undervalued products” and adding value either through construction-based operational or added-service improvements. Currently Privet is the majority stakeholder in the property and will continue as an equity partner for 10 to 20 years.
As part of the deal with Sunstone, Lighthouse will need to make updates to meet current Marriott standards, which officials estimate will come in between $5 million and $6 million, which will also be paid without a loan. Mr. Goeman said the company is days away from inking a deal with Apollo Hospitality for the design of the renovations slated to break ground in two phases beginning this winter.
Guestrooms and corridors on the west side of the hotel will be the first to change with new furniture, bed and window dressings, as well upgraded lighting and carpeting. The halls will be heightened, and the fitness and pre-function areas will be modernized. The south wing of the building was updated in 2006 and will not change.
The second, more drastic phase will begin sometime in 2010 and include a complete redesign of the hotel’s entry, lobby, courtyards, pool and on-site restaurants to meet the chain’s “great room” concept. The space will be less divided, but areas for work, socializing and receiving services will still be clearly defined.
“The idea is to create more flow from one space to another and encourage places to congregate and other places to do work,” Mr. Goeman said. He said the North Bay design will also reflect the character of the region, infusing natural elements with contemporary styling.
The Napa Marriott is Lighthouse’s 11th hotel acquisition and first North Bay location. The property includes two restaurants, a 20,000-square-foot meeting space and a full-service spa.