Owners of Oxnard Radisson in Default : Tourism: Foreclosure looms for the 250-room hotel but city officials don’t expect the busy resort to close.

Owners of the Radisson Suite Hotel in Oxnard face bank foreclosure after failing to repay $18.8 million on time, but city officials say they do not expect Oxnard’s busiest hostelry to close.

Officials confirmed that Manufacturers Bank last month declared Westland Co. of Ventura in default on $14 million in loans and $4.8 million in interest payments on the 250-room hotel at the River Ridge Golf Course.

The 7-year-old hotel is the site of the Los Angeles Raiders’ summer training camp. Its construction was partly underwritten by the city to lure the football team and gain favorable publicity.

But the hotel’s current problems raise new questions about whether owners will ever repay the cash-strapped city for its $1-million-a-year bond payment on the project.

The final deadline for paying the owners’ bank debt passed early this month, but the bank has not yet proceeded with foreclosure, said lawyer Alan Holmberg, who represents the city, which owns the land beneath the hotel.

“The next move is the bank’s,” he said.

Bank lawyers declined comment. Westland general partner Glenn Hartman could not be reached for comment.

The impact of foreclosure is uncertain. But Oxnard officials said the hotel probably would stay open even with a change of ownership, because closure would hurt all parties.

The city would lose bed and sales taxes estimated by the hotel at $300,000 a year, and the hotel would lose some of its resale value if shut down, officials said.

“It’s in the bank’s interest to maintain a hotel there, at least until they can sell it,” said Steven Kinney, president of Greater Oxnard Economic Development Corp., a city-funded agency.

The problem with the hotel is not its current performance, but its past construction debt, Kinney said. The hotel has performed well since a change in operators in 1989, he said.

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It had a solid 70% occupancy rate last year and 81% occupancy for the first quarter of 1994, operators said. And its income per available room was up substantially last year, General Manager Vern Heitzenrader said.

Occupancy is high partly because of discounts, with the average room rate of only about $61 a night last year, he said.

Heitzenrader, an employee of operator Sterling Hotels Corp. and not of Westland, said he knew nothing of the foreclosure.

“I don’t know that the enterprise is not doing well,” he said. “A lot of hotels in this area are only running around 60% occupancy.”

But the project is victim of its shaky financial history, Kinney said.

“It was a poorly constructed deal on behalf of the city when it was first put together in 1985,” Kinney said, “and we haven’t been able to escape the consequences. The only way to turn it around is to scrape it financially down to zero, to offload all the debt, and to rebuild from the ground up.”

The series of events that led to the Radisson’s construction began in 1985, when the Raiders announced that they were looking for a new training field for their six-week summer camp.

Seeing a chance to polish the city’s image and boost tourism, Oxnard officials promised the Raiders a field and hotel rooms by June, 1986.

The Raiders agreed, and the city quickly struck a deal with a development group now reorganized as Westland Co.

The city bought the hotel site and built a sprawling parking lot by issuing a $9-million bond. The hotel was to offset the city’s $985,000 yearly bond payment, but it had no money left after payments on construction loans.

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The city renegotiated the Radisson deal in 1989, allowing Westland to pay only a minimal annual rent of $30,000 the first year and calling for steadily increasing payments until again reaching $985,000 in 1999.

Hotel owners have made their minimal payments--totaling $300,000 over the last five years--as required by the new contract, city financial analyst Jim Fabian said.

The city, meanwhile, continued its $985,000 annual payments until refinancing lowered the payment to $875,000 last fall, Fabian said. The 20-year bonds not will not be paid off until 2005. The city’s overall budget is about $60 million.

Considering the past, Kinney said he does not think the pending foreclosure will hurt the city unless the hotel closes.

“It’s probably not damaging for the city,” he said. “I mean, how much worse off can we be?”