Bond Corp. Holdings Ltd., of Australia, has agreed to acquire a 75% interest in the Kona Kai Club and Kona Inn on San Diego’s Shelter Island for $26 million. Controlled by 1983 America’s Cup regatta winner Alan Bond, the company plans to base Australia’s challenger syndicate for the 1991 America’s Cup at the bay-front property.
Selling his 50% interest in the club and hotel to Bond is Dale Rorabaugh, an optometrist and entrepreneur who with William De Leuuw bought the two contiguous properties from the Lipin family for $15 million in 1985. De Leuuw is selling half of his 50% interest.
Sale of the majority interest in the 35-year-old club is contingent on approval by the San Diego Unified Port District, De Leuuw said Tuesday. Besides the Australian racing syndicate, Japanese and British groups are also expected to base their challengers at the Kona Kai during the 1991 event, Rorabaugh said.
Included in the 12.5-acre package is the Kona Inn, a public hotel with 86 rooms, and the Kona Kai Club, which includes a private restaurant, 90-room guest hotel, two swimming pools, banquet space, tennis courts and spa. The club owns 538 boat slips, about half of which are controlled by an outside operator through a sublease.
Sale to Close in Month
Bond Corp. Holdings, Australia’s largest brewery, reported a profit of $287 million on sales of $3.5 billion for the first six months of 1988. Pending Port District approval, the Kona Kai Club and Inn sale is expected to close in mid-November.
Also being sold to Bond is Stars & Stripes ’86, a prototype of San Diego skipper Dennis Conner’s Stars & Stripes ’87, which won the 1987 America’s Cup in Perth, Australia. The Kona Kai bought the racing boat for $200,000 in early 1987 and keeps it docked at the marina.
The adjacent Coconuts restaurant, run by an outside operator, is also included in the package.
The Kona Kai Club has received the Port District’s conceptual approval for an expansion that would add 228 additional rooms to gear up for America’s Cup crowds, general manager Jim Murray said Tuesday. The expansion, which will include a parking structure to accommodate 780 cars, will cost about $35 million and will be built in a parking lot separating the two properties.
Rorabaugh said he decided to sell his interest because the price offered by Bond was “one I could not refuse.” His sale proceeds will also help finance a new ophthalmic-instrument business called Vismed that he recently started in San Diego.
Rorabaugh, 44, founded Dicon, another ophthalmic-instrument company, and sold it to Cooper Vision for $10 million in 1982. He recently reacquired Dicon and will operate it as a division of Vismed.
Sale Will Help Fund Expansion
De Leuuw, 40, said the sale of the property to Bond was necessary to complete financing the planned expansion. Earlier, the owners had been “almost in escrow” to sell the property to a Japanese buyer. But the deal fell apart last summer, he said.
Featuring a Polynesian motif, the Kona Kai Club and Inn were built by San Diego financier C. Arnholt Smith in 1953. Smith, who still maintains a 65-foot yacht at the club, later sold it to the Alessio family before the Lipins acquired it. Previous owners include Jack and Bonita Wrather.
The Kona Kai Club currently has 1,600 members, double the total three years when De Leuuw and Rorabaugh bought it. Since then, the two men have invested $4 million in a “major redevelopment of the property,” Rorabaugh said.