Miramar Neighbors Fear Promised Work May Be Stalled by Vegas Deal

Just days after he tried to mollify Montecito residents angered by his stalled Miramar Hotel renovation, international hotelier Ian Schrager has infuriated them all over again.

Blaming a poor economy for the project’s long delays, Schrager pledged before community critics last week to make the Miramar’s completion his top corporate priority.

That vow was followed almost immediately by news he is interested in a $200-million renovation of a bankrupt Las Vegas casino.

“It’s mind-boggling,” said Jeffrey Hayden, one of Schrager’s chief Miramar critics. “First he tells us he has no money; then he says he is planning to spend a fortune in Vegas.... This guy belongs in Las Vegas. They are gonna love him there.”

By Monday, community reaction to the buzz that Schrager might shift his interest to Las Vegas had the top aide to Santa Barbara County Supervisor Naomi Schwartz on the phone to New York. He said he warned Schrager about Montecito’s renewed concerns.

“We talked at length about the community’s feelings,” said the aide, Salud Carbajal. “Like the community, we felt there seemed to be confusing messages, which obviously trigger concerns.

“He didn’t go into the Las Vegas situation much,” Carbajal added. “He said the set of facts surrounding his involvement in Las Vegas is different from the set of facts surrounding his involvement with the Miramar.”

Carbajal told Schrager he needs to address the community’s new concerns about possible plans to renovate the Maxim hotel in Las Vegas, as reported in the Wall Street Journal. He suggested Schrager write a letter, and was told that the hotelier would give that proposal “serious consideration.”

The newest twist in the Miramar controversy follows more than a year of increasing community hostility toward Schrager, who told a Montecito crowd last week that he stopped renovation on the Miramar 15 months ago because of a softening economy.

In halting the work, he walked away from uprooted palm trees, half-wrecked cottages, a ripped-out swimming pool and other demolition at the 13-acre site that local residents dubbed “the mudhole.”

“But I am encouraged now,” Schrager said in the meeting with community leaders. “The economy is improving. I have come here to ask you to be a little more patient with us.... I see light at the end of the tunnel.”

J’Amy Brown, a board member of the Montecito Assn., was among the more skeptical that night. One of the crowd’s complaints was that Schrager had been virtually impossible to reach, and he had told them to get business cards from an aide after the meeting. When Brown asked for one, she was told they didn’t have any.

“That was just a few minutes after the meeting, and I was already starting to feel done in,” Brown said. “The next morning I almost fell out of bed. There was a story in the paper saying he had put $1 million down on the Maxim, with an option to buy for $38 million and plans for a $200-million renovation.

“I was shocked and hurt,” Brown said. “He hadn’t said a word about this to us. He betrayed everybody in that room all over again.”

The Maxim hotel, just off the Las Vegas Strip, has been in and out of bankruptcy court over the years. Currently in bankruptcy again, it has been closed since August 2001 and is now owned by a Houston company, Revanche LLC.

Larry Stevens, attorney for Revanche, said Monday that he could not comment on Schrager’s interest in the Maxim, because any arrangement like the one reported would be covered by a confidentiality agreement.

“We wouldn’t break a confidentiality agreement,” he said.

Schrager, the former owner of New York’s Studio 54 who served 13 months in federal prison for income tax evasion linked to the nightclub, declined to comment Monday about the Maxim, the Miramar, his critics or his plans.

A onetime potential competitor for the Maxim spoke up for Schrager. “Local people in Santa Barbara are saying if he can buy the Maxim, why can’t he fix up the Miramar.... I can understand that,” said Lew Wolff, co-owner of the Los Angeles hotel firm Maritz & Wolff. He was once interested in the Maxim himself, Wolff said.

“Ian is, in today’s world, a very honorable person,” Wolff volunteered.

The Montecito Assn.’s Brown had more news Monday about the Miramar site--good news. Schrager is carrying out one of the promises his staff made to the Montecitans, she said.

“I was driving by the Miramar today,” Brown said, “and there were two people out there tossing grass seed around. They said it should be coming up in a couple weeks.”