Hotelier: City clipped my wings

Ray Patel stands outside the Golden Key Hotel, pointing to cracks in his parking lot pavement and trucks on Orange Street transferring garbage or unloading goods near his guest rooms. He blames the city and his neighbor, the Americana at Brand, for the troubles.

Patel bought the hotel in 2001, 27 years after the city declared the area near Colorado Street and Brand Boulevard a redevelopment zone, but before the Americana — with its pricey apartments, condos and more than 70 stores and restaurants — began construction.

Patel acknowledged his property value has since risen, but said business suffered during the three-year construction phase and continues to be hampered by the activity on Orange. He has sued the city and the Americana for lost income as a result of the mall’s construction and ongoing operations.

The stakes in the dispute were raised Nov. 30 when the Redevelopment Agency agreed to Americana developer Rick Caruso’s request to either overhaul the Golden Key and an empty building next door, or to force the owners to sell so he can expand his mall and open it up with a stronger presence on Colorado Street.

Under the expansion plan, the Americana would add 60,000- to 140,000-square-feet of retail space and control the entire north side of Colorado between Brand Boulevard and Central Avenue.

“I don’t see why I have to sell,” Patel said as he stood inside an empty hotel room. “This business invested in Glendale when nobody wanted to invest downtown.”

He said his 55 rooms, which go for between $100 to $125 a night, serve many corporate travelers and those visiting family at local hospitals. The effort to remake his property, he said, “seems like nothing more than trying to create a monopoly with the Glendale Redevelopment Agency’s assistance.”

But city officials and Caruso representatives rejected those claims, arguing Patel knew all along that a major project was planned to rise adjacent to his hotel, and that he has been unresponsive to their offers of setting a fair buyout price.

Matt Middlebrook, vice president of Caruso Affiliated, said Monday that the Americana’s expansion efforts are consistent with the city’s redevelopment rules and the economic goals.

The Americana has brought jobs, positive buzz and tax revenue to the city, and will bring more with the proposed expansion, he added.

“Mr. Patel bought into the area knowing it was a redevelopment area and knowing there is a significant project next door,” Middlebrook said.

He noted that troubles for Patel started before the Americana arrived. Court documents detail a decline in routine maintenance over the years that prompted the Best Western hotel chain to remove the Golden Key as a member in 2007.

But Patel said the loss of the Best Western affiliation started with the construction around him.

“It was an enormous task to make sure the hotel wasn’t negatively impacted during construction,” he said.

In October, the city sent experts to look at the parking lot and other areas Patel said were damaged by Americana construction, but their preliminary report found that the work next door was not the cause.

Patel was simply trying “to have it both ways” in suing, while gaining a boost in property values, Middlebrook said, adding that an offer of binding arbitration to set a price for the hotel has gone unanswered.

“Despite that, we hope we can work out a fair resolution with Mr. Patel,” Middlebrook said.

Caruso has already made an offer for the empty brick building between the Golden Key Hotel and Caruso Way, Middlebrook added. The building’s owner, Henry David, declined to comment.

City Councilwoman Laura Friedman said she hopes Caruso and Patel work out a deal without further city involvement.

“Eminent domain has not been discussed,” she said.

The City Council gave the three property owners 45 days from Nov. 30 to come up with either redevelopment plans or agreements to sell to Caruso.

“We don’t want to put private property owners in a position where they are bullied,” Friedman said, pointing out that Patel told the council he was open to the idea of selling.

She also defended the city’s process as fair and transparent, and one that could yield benefits for all involved.

But back at the hotel, Patel said the city had effectively clipped his wings.

“The council has already taken away my negotiating powers,” he said. “All I want to do is to be able to take care of my guests.”