Disney Raises Grand Hotel Bid to $13.3 Million
The Walt Disney Co. has upped the ante in the bidding war for the financially troubled Grand Hotel, raising its offer to $13.3 million, a spokesman for the hotel’s owner said Wednesday.
“Disney wants the hotel. They’ve always wanted it,” said Daren Brinkman, attorney for Grand Hotel Associates, the Santa Monica limited partnership that owns the hotel and which filed for Chapter 11 bankruptcy protection last August.
Disney’s previous offer of $12.2 million was slightly higher than the bids of two other groups vying to take the 242-room hotel out of bankruptcy proceedings. That contest is now shaping up as a showdown between Disney and Hasina LLC, a group led by hotel-motel owner Tushar Patel of Anaheim.
The third bidder, a partnership made up of two limited partners of Grand Hotel Associates, has withdrawn its bid and is lining up in support of the Disney plan, according to Brinkman. Attorneys for Disney and the third bidder--the O’Conner/Peterson Trust and Joseph Brown Foundation, Limited Partners--could not be reached for comment.
U.S. Bankruptcy Judge Alan Ahart is expected to approve one of the plans at an April 24 hearing in Los Angeles. Disney will not discuss its intentions for the hotel and the 11-acre parcel on which it sits. But local real estate watchers believe it figures prominently in the company’s long-awaited plan to construct a companion theme park next to Disneyland.
Disney had planned to build a seven-story parking garage on the site as part of its $3-billion Westcot project announced in 1991. Disney scrapped that project in 1995 when it was deemed too costly, but the company is expected to announce a scaled-back version later this year.
Disney acquired the $8-million mortgage on the Grand Hotel in 1993 and began foreclosure proceeding in early 1995 when the partnership defaulted on the note. Disney was a day away from foreclosing on the property in January when the judge gave the partnership a 90-day reprieve to find a buyer. Instead of picking up the hotel for $10.2 million--its investment plus interest--Disney was forced to make a formal bid and compete with other suitors for the property.
