Oxnard May Help Radisson Hotel With Revised Lease

Hoping to stave off foreclosure on the city’s busiest hotel, the Oxnard City Council on Tuesday will consider restructuring its lease agreement with the owner of the financially ailing Radisson Suite Hotel.

The Ventura-based Westland Co. has fallen behind $19 million on a loan it took out to pay for the hotel next to the River Ridge Golf Course. It is home to the Los Angeles Raiders’ summer training camp on adjacent property.

Manufacturers Bank, which began foreclosure proceedings against Westland last year, has agreed to a settlement with the company that would avert a July court hearing. But the agreement will become final only if the company restructures its lease with the city of Oxnard, which owns the land the 250-room hotel is built on.

Oxnard decided to partly underwrite the hotel in 1985 to attract the Raiders and gain favorable publicity, as well as to ensure the construction of facilities for visiting golfers.

City officials originally expected revenues from the lease to offset payments on $9 million in bonds that financed the golf course’s sprawling parking lot.

“It sounded like a great idea at the time,” said City Atty. Gary Gillig, who added that he did not work for Oxnard when the deal was made.

But Raiders owner Al Davis immediately placed black material around the practice field, blocking the view.

And the Westland Co. fell into financial hardship after the hotel’s construction in 1986. It never made payments for the land it was leasing from the city, which was paying $985,000 yearly on the bond issue.

Although the hotel’s owners have not been able to pay off their construction and other start-up costs, the hotel established itself as Oxnard’s most popular hostelry.

The Radisson Suite Hotel had a 70% occupancy rate last year, with rooms renting for $50 to $125 a night. The city receives more than $300,000 a year from the hotel in bed and sales taxes alone.

Oxnard leaders have been involved in lengthy closed-session meetings on the foreclosure for months. They say restructuring the lease is the only chance to recoup the city’s investment.

The refinancing will bring the city long-term profits from the lease while maintaining much-needed bed and sales-tax revenues.

“We’re trying to do the best we can for the city and keep (the hotel owners) in business,” Mayor Manuel Lopez said. “They are a major cash cow for us, and we need to have them here.”

Under the proposed lease, Westland would pay Oxnard $50,000 a year for the next four years. After that, the city would receive a percentage of the hotel’s profits--25% after debt service--until 2050. From now to 2007, Oxnard would probably receive about $1.4 million in rent, according to a city report.

“In effect, the city gets a percentage in rent in the future, when the hotel becomes profitable,” said attorney Stanley E. Cohen, who represents Westland’s general partners, Glen and Walter Hartman.

In addition, the Westland Co. would agree to spend about $1 million to refurbish the hotel, and if it decides to sell the hostelry, the city would receive 25% of any profits.

Cohen said the agreement would help his clients overcome their debt without worrying about a burdensome lease.

Councilman Andres Herrera said the hotel has always been a positive addition to Oxnard.

“The owners have a great management team,” Herrera said. “They are doing extremely well, and we think that (the hotel) is important to that area.

“The city of Oxnard is turning the corner in terms of its economic situation. In the past, we’ve had some real bad development. We don’t want this to turn into another white elephant. We just can’t afford that.”