Investor, Bank Agree to Delay Foreclosure Sale of Irvine Hotel

Businessman George Yao and a Kansas City bank have reached an agreement that will delay a planned foreclosure sale involving the Radisson Plaza hotel in Irvine until late in January, an attorney said Friday.

Yao, general partner and 98% owner of GMY Investment Co. LP, which owns the hotel, has been negotiating in recent weeks with Bank Midwest, which holds a delinquent $19.3-million first loan on the property. Jess Robert Bressi, Yao’s attorney, said Friday that a foreclosure sale scheduled that day had been postponed for a month to give Yao time to complete a planned debt restructuring.

Yao declined to talk about the agreement, and Bank Midwest officials were not available for comment. But Bressi described the proposed restructuring as “a good deal for all of the creditors, not just the bank.”

“We believe we have a restructuring,” Bressi said. “We’ve got a commitment from the lender that involves a tremendous amount of debt relief . . . and calls for Mr. Yao and GMY to immediately put substantial money into sprucing up the hotel.”

The hotel has had a tangled financial history in recent years. Yao took an equity stake in the hotel in 1989, paying $7 million in cash and taking out a $19-million loan from Homestead Savings, a now-defunct S&L.;

Bank Midwest took over the loan after federal regulators seized Homestead. The proposed debt restructuring, Bressi said, “takes into account the fact that the hotel simply isn’t worth what Mr. Yao paid for it in 1989.”

The reclusive Yao gained publicity in 1991 when he bought the most expensive home ever sold in Orange County, paying $13.8 million for a waterfront mansion in Newport Beach. Yao subsequently lost the home during a bankruptcy proceeding. The mansion recently returned to the market with a listing price of $8.9 million, local broker Bill Cote said.