Ambitious Planning for New Resort

The luxury St. Regis hotel company was named manager of the new Monarch Beach Resort on Wednesday, saying it hopes to win coveted five-star rankings from Mobil Travel Guide for the Dana Point hotel as well as a seafood restaurant inside.

The $350-million, 400-room resort, under construction beside a Robert Trent Jones Jr.-designed golf course, will include a large spa, three pools and 30,000 square feet of indoor meeting space.

When it opens in summer 2001, the six-story Italianate hotel and resort will compete for high-end business and leisure travelers with the nearby Ritz-Carlton hotel, also in Dana Point, a landmark for 16 years.

The developer, Capital Pacific Holdings Inc. of Newport Beach, is betting that coastal south Orange County can become a top resort destination--a vision that others have had but until recently was unrealized except for the Ritz.

Officials from St. Regis and Capital Pacific cited Orange County’s emergence as a major business center as one reason the time is right to proceed.

“Orange County is just extraordinary,” said Richard J. Cotter, managing director of the flagship St. Regis in New York, built in 1904. “Such a healthy economy demands another destination resort.”

St. Regis, part of the Starwood Hotels group, has eight other hotels bearing its own name and manages other luxury properties for Starwood.

Cotter said the St. Regis is the only hotel concern to have two “10-star” Mobil properties, in which the hotel and restaurant each receive five-star ratings. Those are at the Phoenician Hotel and its Mary Elaine’s restaurant near Phoenix, a Starwood-owned hotel that St. Regis manages, and at the original St. Regis in Manhattan.

The Ritz chain was among those submitting unsuccessful bids to operate the Monarch Beach Resort, planning to market it as a complementary destination with the Ritz-Carlton and perhaps another, smaller resort hotel under development a few miles away in Laguna Beach.

The Monarch Beach project has had four owners since the early 1980s.

Its development stalled during California’s recession in the early 1990s and later during the financial travails of its Japanese owners, who finally sold it two years ago. Capital Pacific, known mainly as a home-building concern, also acquired the right to develop high-end housing around the hotel in a packaged approval deal with the city of Dana Point.

Capital Pacific officials said they seek building permits for the first 80 luxury condominiums on land next to the hotel, which sprawls in a rough U-shape down a hill toward the golf course and ocean. They have city authorization to build up to 238 units on the property.

Capital Pacific is paying much of the resort’s construction costs with bank loans funding the rest, said David N. Sonnenblick of the Sonnenblick-Eichner Co. in Los Angeles, a commercial real estate company that arranged the loans and helped bring in St. Regis as the manager.

Capital Pacific builds homes in five Western states. Most of the company’s projects in the region are along the coast, where it has built luxury homes for the ultra-high end. In its fiscal year ended Feb. 29, the company earned $6.2 million on sales of $319 million. On Wednesday, the company’s stock closed on the American Stock Exchange at $2.75, down 13 cents.

Capital Pacific’s chairman, Hadi Makarechian, said his plan is to out-deluxe the 391-room Ritz, Orange County’s fanciest resort hotel.

The Monarch Beach hotel, on Niguel Road just inland from Pacific Coast Highway, will lack a setting as majestic as the Ritz, which occupies a towering bluff above the Pacific Ocean.

But the new hotel will be oriented better for spectacular views to Santa Catalina Island, with nearly 90% of its rooms providing at least a peek at the ocean, compared with only about a quarter of the rooms at the Ritz.

The property includes access through a tunnel under the highway to a beach club, which will be refurbished. Local residents will be encouraged to continue their membership at the club and also to join the hotel’s new spa, Cotter said.

Selecting an operator for the project was as important as picking a driver for a race car, Makarechian said. “You can have the fastest car in the world,” he noted in an interview. “But if you don’t have the right person driving it, you’re going to crash.”

At a news conference, Cotter and other officials predicted that the Ritz-Carlton would continue to prosper, although its occupancy rate might fall from the 80% range to a still healthy occupancy of more than 70%.

But John T. Dravinski, the Ritz’s manager, said he didn’t think the occupancy rate necessarily will fall. The Ritz, which has refurbished its dining room and added more meeting space, plans to build its own large spa.

Dravinski said the Ritz stands to benefit from the addition of a new hotel. “People will get to really know the area. Now it’s only known because of the Ritz.”

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Staff writer Daryl Strickland contributed to this story.