The Inn at Morro Bay, a waterfront property beleaguered by debt, has been purchased for about $9 million by Pacifica Host Hotels, the hotel ownership and management arm of San Diego-based Pacifica Companies.
Local hotelier John King relinquished the property to lender Wells Fargo Bank in August when no one stepped forward to meet the asking price of $8.5 million at a public auction on the San Luis Obispo County Courthouse steps.
The 98-room inn on State Park Road, which was built in 1960, will remain open during the transition, said Michael de Jesus, vice president of sales and marketing for Pacifica Host Hotels. All of its roughly 70 employees have been retained.
The hotel developer owns 34 properties in Arizona, California, Florida, Texas and Utah, including brands such as Marriott, Hilton, Crowne Plaza, Holiday Inn, Holiday Inn Express, Wyndham and Best Western. However, the Inn at Morro Bay will stay an independent location.
“It’s a destination and its own brand, so we have no intentions of putting a flag on it,” de Jesus said.
The company will begin renovations on the inn this fall, after high occupancy season.
Pacifica Host Hotels is also in the process of developing another 135- to 150-room beachfront hotel in Grover Beach. Construction is slated to begin this summer on The Grover Beach Lodge, according to Pacifica’s website. Its opening is tentatively scheduled for spring 2012.
Founded in 1978, Pacifica Companies is a real estate developer, owner, investor and investment manager owned by Ash Israni. Its portfolio includes projects throughout the United States, Mexico and India, according to its website.
The foreclosure that preceded Pacifica’s purchase of the property was not the first time the inn had financial troubles.
The Los-Angeles based Kingsway Corp., which bought the inn in 1980, defaulted on a $2.3 million loan, and the resort was put into a court-appointed receivership for two years until Santa Barbara-based Friden Hotel Co. bought it for $5.4 million, according to earlier news reports. Friden transformed what was once an undistinguished stopping place into the current inn with its Cape Cod look.
Wells Fargo and King bought the Inn at Morro Bay in 1993. At the time of foreclosure, King owed Wells Fargo $9 million, and another lender, Missouri-based Virtual Realty Enterprises LLC, which had a second position on the loan, an additional $5.5 million, according to court documents.