He Makes Sweet Deals of Those Turned Sour

Stanley R. Castleton is in the “mess business,” according to a friend’s succinct description.

As president of the Stanwill Cos., which have owned and managed Southland real estate worth $1 billion since 1984, he is often involved with straightening out real estate deals that go sour.

A resident of Irvine, Castleton commutes to his office near Los Angeles International Airport in a chauffeur-driven van equipped with a cellular telephone, TV set and enough creature comforts to make the one-hour trip productive work time for him.

“The ride begins at 5 a.m., which allows me to reach people on the East Coast and Texas before they go out to lunch,” he said. “When you work a 14-hour day, a full-time driver is a necessity, rather than a luxury.”

Family Tradition

Much of the real estate that Castleton deals with is in the “messy” category, foreclosed condominiums, half-finished office buildings, empty hotels--the kind that is a problem to some but a challenge to others.

“There’s something about taking a piece of property, solving the problems that afflict it and making it work,” the 41-year-old Castleton said. Real estate is a Castleton family tradition--his father was a home builder--but Stanley Castleton brings a certified public accountant’s viewpoint to it.

Following graduation from Brigham Young University in 1975, Castleton worked in the Santa Ana office of the accounting firm Arthur Andersen & Co. before turning to real estate development.

After home building ventures in Newport Beach and Irvine and before he formed Stanwill, he became president of Sun Cal Properties in May, 1984, just before Sun Cal acquired the troubled properties of C-D Investment Co.

Two Garages Required

Almost all of the 17 properties, including the Southland’s largest hotel, the Anaheim Hilton & Towers, and the Los Angeles Airport Hilton, were either in foreclosure or not far from it.

At the Anaheim Hilton “the problem wasn’t that the hotel was too big, with 1,600 rooms, but that requiring two parking garages didn’t make economic sense when the deal was put together in 1982” by C-D III, Castleton said.

“One parking structure with 1,600 spaces would have been enough for the hotel, but C-D III (the original owner) and the city worked out a package with a 3,200-space garage for the hotel and a 1,500-space city-owned garage to serve the convention center,” Castleton said.

One of Castleton’s companies acquired the hotel and the larger parking structure in 1984, when the C-D empire collapsed.

Much of Castleton’s time since then has been spent negotiating with the city, which claims that the hotel owes the city millions of dollars.

Castleton’s companies also devised a solution for the partially completed Park Wilshire condominium tower on Wilshire Boulevard, acquired a few years ago when only the concrete frame and some mechanical equipment were in place.

Because the existing floor plans were not marketable, Castleton called in Santa Barbara architect Barry Berkus.

“Berkus approached the plans the same way he designs single-family houses,” Castleton said. “He reasoned that buyers of $330,000- to $2-million condominiums want the same amenities that many of them had in their detached homes.”

Another problem property acquired in 1984 by Sun Cal, which later became one of the Stanwill entities, was the Beaudry I building, a 29-story, 900,000-square-foot office building just west of the Harbor Freeway in downtown Los Angeles.

Turned the Project Around

Millions of dollars in liens and tenant improvement work had to be done, and the parking structure was only 30% complete. The building was substantially vacant, tenant and lender lawsuits were pending and construction unions called a work stoppage.

Sun Cal turned around the project by restaffing the building management team, reorganizing the construction staff and mollifying the unions, resulting in a resumption of construction work. It also negotiated with Security Pacific National Bank on a long-term lease, and refinanced and completed the parking structure.

Beaudry I’s problems were simple compared to those of what is now called the Centroplex, where Stanwill is headquartered.

Acquired by Sun Cal in 1984--and sold in 1986--the complex near Los Angeles International Airport includes the 1,300-room Los Angeles Airport Hilton & Towers, a family fitness center, a shopping mall and parking garage for long-term storage, three office buildings totaling 750,000 square feet and a 3.7-acre parcel of vacant land.

Considerable Problems

The problems facing Castleton and his associates, who are managing the property for owners Century Centre Partners Ltd., were considerable:

Construction had stopped because of a loan default; two of the office buildings were vacant, with the third only 60% leased; the property was difficult to get in and out of, and building services were almost nonexistent.

A major recasting of the project was taken: A new master plan was created that would link the three office buildings and the hotel with a pedestrian mall and solve the ingress/egress problems.

“We added about 30,000 square feet of new retail and service commercial space, added a deceleration lane off Century Boulevard for better access to the site, created an enhanced exterior and interior design program and created signs to promote the many facilities within the complex,” Castleton said.