Japanese Firm to Buy La Costa for $250 Million

A Japanese firm has agreed to purchase the La Costa Resort Hotel and Spa, the internationally known resort in Carlsbad that has lured the rich and famous for more than two decades.

Officials with Sports Shinko Company, an Osaka-based firm that owns dozens of country clubs in Japan, have signed a letter of intent to buy the hotel and spa for $250 million, resort operators said Wednesday.

Allard Roen, manager and one of three principal owners of the spa, said a final agreement should be hammered out within about 60 days and the sale finalized.

Under terms of the pending deal, the resort, on the southern flank of Carlsbad, will be operated for Sports Shinko by a management firm, the San Diego-based Global Hospitality Corp. The company currently operates a 1,000-acre resort in Florida that was recently purchased by Sports Shinko.

‘Important Addition’

Sports Shinko officials said they were eager to acquire a West Coast site to go along with the Florida property, as well as the 26 country clubs it owns in Japan and two in Hawaii.

“We chose La Costa as an important addition to our company because of its exceptional facilities, its dramatically beautiful location and its status as one of the world’s finest resorts,” Toshio Kinoshita, Sports Shinko president, said in a prepared statement. “We are committed to maintaining the high standards of service and facilities that have made La Costa renowned the world over.”

Since it opened in 1965, La Costa has built an image as a premier playground for the rich, drawing U.S. presidents and oil barons, captains of industry and Hollywood stars.

Guests can choose from seven restaurants and three bars, tour either of the resort’s two 18-hole golf courses, or sample play on one of the 23 tennis courts (grass, clay or concrete).

The resort includes a private track, an aquatics center and a 180-seat theater that features first-run movies each night. The spa itself has Roman baths, rock steam rooms and Swiss showers. Guests are treated to herbal wraps, luffa rubdowns and all-body massages.

All that attention, however, comes at a price. Rates at the 482-room hotel range from $185 a night to $1,200 a night for one of the complex’s two presidential suites.

Owned by Its Builders

The pending sale marks the end of an era at La Costa. Through the years, the resort had remained in the hands of the men who first carved it from the rolling coastal hills--on-site manager Roen, builder Irwin Molasky and Merv Adelson, chairman of Lorimar-Telepictures Corp. and husband of broadcast journalist Barbara Walters.

Roen said he plans to keep his house overlooking the resort and continue serving as chairman of golf’s MONY Tournament of Champions, held annually at La Costa.

The spa and hotel recently underwent a $100-million renovation, prompting some residents of the surrounding community to speculate that the operation may be hurting financially. In addition, Adelson’s television and movie producing firm earlier this year posted huge quarterly losses and announced the sale of several television stations and magazines.

Roen, however, said the sale has nothing to do with financial troubles. After the remodeling was completed, several firms approached the partners about buying the spa, he said. Sports Shinko’s offer seemed “a good business deal for them and a good business deal for us.”

“We’re all getting up there in our 60s now,” Roen said, speaking for his partners. “It’s been like a baby to us, of course. We developed it and have grown with it. There’s a great deal of pride of ownership.

“We felt that Sports Shinko, along with Global Hospitality, could carry out what we would want for the resort in the future. I feel good about that.”

Donald Stephenson, president of Global Hospitality Corp., said his firm will evaluate the current operation at La Costa before deciding what changes need to be made.

“It’s a beautiful property and they’re doing an awful lot of things right,” Stephenson said.

Stephenson, a former top executive with the Sheraton hotel chain, predicted that La Costa will continue to draw visitors from throughout Southern California and the world.

“It’s not the intent of Sports Shinko or ourselves to make this an exclusive hotel for Japanese,” Stephenson said. “It’s just not in the cards.”

In years past, La Costa has played host to movie stars Bette Davis and Barbra Streisand, former Presidents Richard Nixon and Gerald Ford, and U.S. Chief Justice Earl Warren.

Along the way, there have been rumors of the resort’s connections with organized crime. Investigations by the FBI as well as state and local authorities never resulted in any charges being filed against the resort’s owners.