Omni’s Largest Creditor Plans to Foreclose on Hotel
The troubled Omni San Diego Hotel suffered another setback when its largest creditor said it intends to foreclose on the downtown property, but the hotel’s management said the facility will remain open and fully staffed for the time being.
The Teachers Insurance & Annuity Assn. of America, which provided a $48-million mortgage loan to the Omni’s developers, said Thursday that it will foreclose on the 452-room hotel--next to the Horton Plaza shopping center--on Aug. 3.
The Omni is owned by Hotel Associates of San Diego Ltd., whose general partner is Py-Vavra Development of Milwaukee. The owner filed for protection under Chapter 11 of the U.S. Bankruptcy Code in April, 1989. The bankruptcy court has approved a foreclosure sale on Aug. 3.
The Omni has had low occupancy since opening in September, 1987. The owners have blamed their misfortunes on the city’s overabundance of hotel rooms and a two-year delay in the opening of the San Diego Convention Center.
Michael Andrew, an attorney representing the TIAA, added: “This action should have no immediate impact on the employees. The Omni will continue operations as a first-class hotel for the foreseeable future.” The future of the Omni’s 370-member staff will depend on the hotel’s future owner, a hotel spokeswoman said.
The TIAA, a New York-based, nonprofit corporation established to provide pension and insurance funds for educators, has made loans on several San Diego real estate projects, including Horton Plaza and University Town Centre.
