Treasure Island has had four owners and three name changes since
development as a hotel was first proposed.
Laguna Beach Resorts LLC announced Friday that a partnership of
Montage Hotels & Resorts, The Athens Group and private investors had
purchased the 30-acre, oceanfront site from Marriott International Inc.
for a reported $190 million.
Newly-formed Montage Hotels and Resorts will operate the resort, now
to be called Montage at the Laguna Beach Colony.
The sale was signaled by a request in May from Athens Group to revise
the development agreement to read that the ownership could change as long
as the resort was operated as a five-star luxury resort, as defined by
Smith Travel Research.
Montage at Laguna Beach Colony will be the first hotel owned by
Montage President Alan Fuerstman, according to Ned Snavely, Fuerstman’s
community liaison. Fuerstman was formerly vice president of the Bellagio
Hotel in Las Vegas.
“I am delighted to have this property as the Montage flagship,”
Fuerstman said. “This resort will compliment the beauty and aesthetic
sensibilities of this coastal retreat and community.”
Laguna Beach Resorts LLC is the first collaboration between Montage
and Athens Group, which continues to oversee the development.
“Since we came here seven years ago, we have come to know and
understand the host community of Laguna Beach,” said Kim Richards,
president of Arizona-based Athens Group. “Montage Hotels & Resorts joins
us in our commitment to be a contributing citizen.”
Athens Group has come to know Laguna Beach the hard way, in a series
of confrontations that included both critics and supporters of the
project. A divisive special election affirmed the City Council approval
of the proposed project. The development agreement was challenged at the
California Coastal Commission hearing, prompting some changes.
Even the council members who supported the project came into conflict
with the developer, when spiraling costs of the public park on the site
were made public. The swath of bluff-top open space is to be called
Treasure Island Park, the original, and still generally used name of the
30-acre site, which for 60 years was a mobile home park. The city will
pay for the park by deferring bed taxes. Projected bed taxes from the
260-room hotel could reach $3 million a year, which the city does not
have to share with the county or the state. Property taxes also will
benefit the city, as well as Laguna Beach Unified School District, which
is funded primarily by the taxes, rather than state.
Sales taxes from visitors’ excursions to city shops, restaurants and
galleries also will swell city coffers.
Sales of the 14 residential lots and 14 condominiums on the site will
begin this fall, according to the press release, which announced the sale
of the property. Private investors in the new partnership were not named,
but are rumored to include the owner of the e-bay Web site, who also
reportedly owns luxury hotels in Europe.
1988: Treasure Island Mobile Home Park was purchased in 1988 by
Treasure Island Associates, a partnership of Laguna Beach resident
Richard Hall and a Merrill Lynch Real Estate Trust known as MHL VI.
1991: The city passed a rent-control ordinance. A referendum
overturned the ordinance.
1994-95: The city issued a conditional-use permit to close the mobile
home park and approved a relocation assistance program.
1996: Park tenants filed a lawsuit against the closure.
1997: Treasure Island prevailed in the lawsuit.
1998: The city approved the Local Coastal Plan modifications requested
by the California Coastal Commission to the development agreement.
1999: Project critics gathered enough signatures in January to qualify
a referendum on the city’s approval. The referendum was held in April
and the city’s approval was upheld by a 55 percent majority of the
voters. Five Star Resorts, a partnership between Marriott International
Inc. and Athens Group purchased the site in August. The city approved a
development agreement in September.
2000: The city approved in February a coastal development permit for
the project, which included a hotel, condominiums, single-family homes, a
public park and public parking. Project critics appealed the permit terms
to the Coastal Commission. The appeal was denied in June, but some
modifications were made to the plans for the project. Both sides claimed
2001: Project opponents asked the commission to revoke the permit in
January. The request was denied in February.
2002: Spiraling park costs put the city council and a lot of residents
in a fit this spring. No cap had been put on the costs, despite the
recommendation of City Manager Ken Frank. But no one had anticipated that
the costs would escalate from an estimated $2.5 million in 1999 to more
than $9 million by 2002. Frank refused to agree to more than $5.75
million and an auditing company was hired. The park costs were set to go
to arbitration when Athens Group proposed in May a reduction in its
estimates and a cap. In return, the company asked for a revision in the
development agreement that allowed more flexibility in the ownership. The
council approved the revision and the cap at the June 18 meeting. The new
ownership was announced June 20.
Information, courtesy of Athens Group.