Foreclosure Suit Filed Against Registry Hotel on $21.3 Million Loan

A foreclosure suit has been filed against the Registry Hotel in Irvine, seeking immediate payment of a $21.3 million debt or sale of the property to recover the money, part of a 1983 loan by Homestead Savings & Loan Assn.

The suit, filed by the S&L; in Orange County Superior Court earlier this week, also asks for a court-appointed receiver to manage the hotel until a foreclosure sale can be held.

Hotel officials could not be reached for comment Thursday, but it appears that the Registry is losing a ferocious battle for guests in a market where the number of hotel rooms has far outstripped market demand.

“They’re having the same problem we’re all having here--too many hotels,” said Bernard Jacoupy, general manager of the Meridien Hotel in nearby Newport Beach.

“It’s a very competitive market and the Registry is a small company,” said Ron Cribbet, general manager at the neighboring Irvine Marriott. “They’re fighting with the big boys like the Hiltons, Marriotts, Sheratons, Holiday Inns . . . that have national sales forces and major networks of marketing people.”

And even for the big boys, southern Orange County has been a tough market. Jacoupy, for example, complains that rooms that cost $125 and up at Meridien hotels in New York rent for less than $100 a night in Orange County. “It’s a buyer’s market here for hotel rooms--you can get a better deal than in Las Vegas,” he said. “And it’s a lot more difficult for the smaller chains.”

Chuck Davis, a leisure industry specialist with Laventhol & Horwath in Costa Mesa, said the average occupancy of hotels in Irvine, Costa Mesa, and Newport Beach has been running from 65% to 70%--a range at which most hotels can barely break even.

But for the Registry, occupancy rates in the last six months to a year have been hovering in the 45%-60% range, said a spokesman for Homestead S&L--rates; that almost certainly would put the 293-room hotel deep into the red.

The hotel is reportedly owned by Associated Investors Joint Venture, a private company headed by its majority owner and chairman, Charles W. Lanphere of Dallas, who could not be reached for comment.

When the Registry opened in August, 1976, it was the first large, upscale hotel in the airport area. The hotel is lavishly decorated in French Provincial and early American styles and features such amenities as specialty shops, tennis and a concierge floor, where rooms cost up to $150 per night.

The hotel reportedly did well for years but by mid-1985 was facing serious competition from at least a dozen other upscale hotels, including hotels in the Hilton, Marriott and Sheraton chains.

Lavish Refurbishing

In an apparent effort to help attract guests, the Registry three years ago borrowed $25.2 million from Burlingame-based Homestead S&L;, according to the lawsuit. Industry sources said the money was used to pay for a lavish refurbishing.

But the competition has apparently taken its toll.

Owners of the 10-story hotel, located opposite the Orange County Airport on MacArthur Boulevard, failed to make the July payment of $178,044, the lawsuit states. In August, a $183,979 payment was missed. And in September, a $187,837 payment was not made.

“Although demand for payment was made,” according to the lawsuit, the hotel’s owners have “failed, refused and neglected . . . to pay any sums whatsoever since June 30, 1987.”

The lawsuit asks for the remaining $21.3 million due on the note, plus interest and attorney’s fees.

Under a notice of default on the debt that has also been filed, the Registry has 90 days to make the delinquent payments. Failing that--or a successful defense of the suit or a bankruptcy filing--the hotel could be sold to pay its delinquent debts, said a Homestead spokesman who asked not to be named.