$80-Million Deal Close on Sale of Anaheim Hotel
Orange County hotelier Tushar Patel, who lost a high-profile bidding war with Walt Disney Co. for Anaheim’s Grand Hotel in 1996, is close to purchasing the far bigger Anaheim Marriott hotel, sources familiar with the transaction said Wednesday.
The deal for the 1,033-room hotel, said to be in the $80-million range, would be the biggest move yet by Patel’s Tarsadia Hotels as it positions itself to benefit from the expansion of the Anaheim Convention Center and the opening in 2001 of Disney’s California Adventure, a new theme park next to Disneyland.
The Anaheim Marriott, a convention-oriented facility south of Disneyland and just off Harbor Boulevard beside the convention center, is Orange County’s third-largest hotel. Only the nearby Anaheim Hilton and Towers and the Disneyland Hotel have more guest rooms and meeting space.
Patel has become the city’s second-largest property owner, after Disney. His Tarsadia Hotels and affiliated companies own several Anaheim hotels, including the 238-room Jolly Roger on Katella Boulevard and the 254-room Conestoga on Walnut Street.
Tarsadia recently purchased the 400-room Hyatt Regency Alicante and an adjacent office building in Garden Grove, a few blocks from Disneyland and the convention center. Tarsadia plans to convert the office building to a 279-room all-suites hotel.
“They are very successful, and they’re moving upscale,” said hotel broker Alan X. Reay of Atlas Hospitality Group in Costa Mesa. In one recent deal, Tarsadia bought a San Mateo hotel that it now operates under a franchise agreement with Marriott International.
Reay, who has sold hotels to Tarsadia, said Patel is “extremely bullish on Anaheim.”
Spokesmen for Tarsadia and the Anaheim Marriott’s current owner, the Equitable Life Assurance Society of New York, declined comment. However, three knowledgeable sources, speaking on condition of anonymity, confirmed the deal was in the works.
While Patel has expanded his empire to more than a dozen hotels, mostly in California, things have not always gone his way. His most publicized defeat was in the battle for the 242-room Grand Hotel just outside Disneyland.
Patel bid $12 million, hoping to operate the 30-year-old hotel, but lost out when Disney paid $13.3 million for the Grand in 1996 and blew it up two years later to make room for parking.
With 55,000 square feet of meeting space, a prime location and the Marriott name, the Anaheim Marriott should benefit from expansions of convention business and tourism, said hotel consultant Kenneth C. Free, president of Ganymede Consultants in Thousand Oaks.
Free noted that competition for hotel guests will be fierce, estimating 1,231 hotel rooms are under construction in the Anaheim area, with perhaps 5,700 more in various planning stages.
Among them are Disney’s Grand Californian, a 750-room hotel to be built inside the new theme park and a 750-room hotel that a group of Hong Kong investors is planning to build on Katella next to the convention center, across from the new Disney park.
Convention hotels such as the Marriott appear to be surer bets in the area in coming years than hotels that are counting on expanded Disney operations to draw hordes of tourists for two- and three-day stays in Anaheim, Free said.
“The Grand Californian should do fine because of its location inside the park. But outside it’s a little bit of a tough sell even with Disney’s magic,” he said.
“When people are looking at leisure destinations, they want greenery, low stress and all of that. Clearly Anaheim is going to be cleaned up. But it’s still a pretty urban environment there.”
