Westgroup Goes in for Face Lifts : At Biltmore, Guests Get Rude Awakening

For guests at the Biltmore Hotel, it can be a rude awakening these days.

The downtown landmark doesn’t need many early morning PBX operators to make wake-up calls. Jackhammers begin to sound at 6:45 a.m. as construction crews go to work on a massive renovation of the venerable structure.

“The sound reverberates throughout,” explains Bob Williamson, president of Westgroup Hotels. “All our guests are up and ready to go for their early appointments.”

Grappling with such inconveniences is all part of the decision by Westgroup to continue operating the hotel while it undergoes a $135-million face lift. Included are a new office tower, a 375-space parking facility and new restaurants, bars and other amenities.

Los Angeles-based Westgroup, which specializes in renovating vintage hotels and office buildings, purchased the Biltmore for $75 million last December. It will soon begin a similar but less costly $12-million renovation of the Newporter Resort in Newport Beach, which it recently bought for $25 million.

$500 Million Worth of Properties

The privately owned firm has remodeled and renovated more than $500 million worth of properties amounting to 5.5 million square feet in Seattle, Dallas and Southern California, according to President Patrick R. Colee.

Of that total, 2.4 million square feet is located in downtown Los Angeles. In addition to the Biltmore, Westgroup’s other properties include the Pacific Mutual office building next to the Biltmore, One Bunker Hill at 601 W. 5th St. and the Hope Street building at 617 W. 7th St.

Westgroup typically forms a partnership with a major financial institution, such as a bank or insurance company, to obtain the financing to renovate the properties. In the Biltmore’s case, the partner is First Boston, a giant investment banking firm. With the Pacific Mutual building and Adolphus Hotel in Dallas, Westgroup’s partner is New England Mutual Life Insurance. New York’s Citibank has invested in the Hope Street building here and the Exchange building in Seattle, and Los Angeles-based Columbia Savings & Loan Assn. is the partner in the Newporter project.

Colee, a Los Angeles-area native, first undertook a commercial renovation project in Seattle in 1976 with a face lift of the Seaboard building, which houses the headquarters of the Nordstrom retailing chain. Later, he renovated another five buildings in the Seattle area, then moved back to Los Angeles in 1979 and formed Westgroup.

“At that point in time, no one wanted these old buildings,” he says.

“I really love old buildings,” explains Colee, who, with his wife Diane, has renovated a number of old homes. “I liked old homes before I got into it commercially.”

He says Westgroup has found a niche in the commercial real estate field. “There is a certain percentage of people who are interested in the tradition and charm of the older buildings.”

Westgroup makes an effort to restore a building or hotel to the architect’s original plan--”as if he were alive today,” Colee says.

Modernization comes in the updating of heating, air conditioning and other technical improvements.

Colee says the idea is “to remove the heavy old look that a lot of old buildings have,” without sacrificing the unique architecture and personality of a structure. This is done, he explains, by adding glass, brass, lighting and interior landscapes to create “openness.”

2nd Major Entry

At the Biltmore, for example, Westgroup is adding a second major entry off Grand Avenue so the hotel’s main lobby, originally across from Pershing Square on Olive Street, can be relocated to the hotel’s spacious second floor. A bar area is being added to the original lobby area, which will continue to be used as an entry.

The number of guest rooms will be reduced to 728 from 1,002 in order to create office space in addition to the new office tower. Another 28,000 square feet in retail space will be available.

Office rents at downtown buildings renovated by Westgroup run 10% to 25% below those of new downtown office building, which currently run about $29 to $32 a square foot, according to Charles L. Lande, president of Westgroup Commercial Inc.

The hotel, which is scheduled for a grand reopening next March, recently named Bernard J. Jacoupy as its president. Jacoupy says that, until the renovation, the Biltmore had technical obstacles--such as not enough elevators and parking--that made it difficult to compete with other downtown hotels.

$1,500-a-Night Suite

Room rates will range from $97 to $160 a night, he says, with suites beginning at $210 and the two-story Presidential Suite going for $1,500 a night.

Meanwhile, the Newporter is scheduled to be renovated by June. “In the old days, it was the place to go,” says Colee of the resort spread out over 26 acres in Newport Beach. “Our goal is to rebuild that original life.”

Westgroup has some new projects in mind once the current two are completed, but Colee declines to elaborate. He says the future may include more new construction. The Biltmore office tower is Westgroup’s first construction project from scratch .

“Prices of older buildings have gone up significantly,” Colee explains. Investors and tenants are now more willing to consider renovated properties, he said. “We had a difficult time getting money interested in older buildings at first.”