Grant Hotel Sold to New York Firm : Sale Will Enable Face Lift to Be Completed by December
Christopher Sickels, the San Diego developer who is restoring the historic downtown U.S. Grant Hotel, has sold the block-square property to a New York real estate investment firm in return for financial backing of the $80-million face lift.
Sickels’ firm, CDS-Grant Associates, announced that the old hotel has been acquired by U.S. Grant Hotel Associates, a California limited partnership formed by Sybedon Corp., a New York firm that operates nationwide as a mortgage banker, developer and sponsor of historic landmark projects. Sybedon has participated in the renovation of the Clarion Hotel in New Orleans and is involved in the restoration of the Jefferson Sheraton Hotel in Richmond, Va.
Principals from the Sickels firm and Sybedon Corp. could not be reached for comment Monday.
Although the price tag on restoration of the 1910 vintage hotel has risen from $11 million to $80 million in the last four years, CDS-Grant employees confirmed Monday that the renovation will be completed on schedule by next December.
Sickels plans to transform the aging hotel into a modern luxury hostelry decorated in a turn-of-the-century style, enlarging the main lobby area, restoring the Grant Grill restaurant and converting the top four floors of the hotel into posh executive suites.
Sybedon, through U.S. Grant Hotel Associates, will lease the hotel to Ulysses Management Co., a limited partnership formed by Sickels and Atlas Hotels. Atlas will operate the hotel after its opening in December. A Sickels’ affiliate will be general partner of Ulysses and Sickels, as a general partner of CDS-Grant, will be responsible for the renovation and the future management of the U.S. Grant.
Construction and permanent financing of the $80 million project will be furnished by Home Federal Savings & Loan Assn. and by a loan from a federal historic grant and the city of San Diego.
Because the U.S. Grant has been designated as a historic structure, Sybedon is able to market limited partnership interests in the building to clients interested in gaining investment tax credits and depreciation write-offs.
Sybedon, through its U.S. Grant Hotel Associates, is planning to sell interests in the hotel through privately-negotiated sales early this year. Because of securities sales regulations, details of the transactions cannot be made public until after the sales are completed, the CDS-Grant announcement stated.
Walt Hauschildt, city Property Department economic development project coordinator, said that the change in ownership of the downtown property would not affect the $6 million federal Urban Development Action Grant awarded Sickels for restoration of the historic structure. The $6 million in borrowed money will return a total of $26 million to the city.
Work had slowed during the last few months because Nielsen Construction Co. crews discovered that basement support columns and structural steel beams were disintegrating and required replacement. However, with the infusion of new capital--estimated at a net amount of $22 million for the renovation--the project is expected to be completed on schedule, CDS-Grant employees said.
Restoration of the exterior of the hotel, which is located between Broadway and C Streets and between 3rd and 4th avenues, will include repainting the battleship-gray facade in earth tones and installing decorative sidewalk paving. The hotel’s 282 rooms will be redecorated in period furniture and will have modern plumbing, including sunken bathtubs and Jacuzzis in some of the suites.
