The Manhattan Beach City Council approved the sale and renovation of the Marriott Hotel and golf course at 1400 Parkview Avenue Tuesday night.
The council’s approval was required since the city owns the 26 acres where the resort sits.
Two companies, Cerberus Real Estate Capital Management and Westmont Hospitality Group, want to buy the hotel from HMC/Interstate Manhattan Beach, L.P., which built the hotel as a Radisson in 1983.
The renovations were a condition of the sale. The buyers said the improvements would lead to increased tax revenue for the city.
“There will be a full-scale renovation to better integrate the hotel with its Southern California surroundings,” said Tyler Rothenberg of Cerberus. “We believe that revenue will increase, which in turn will increase” the amount of money the city gains.
From mid-2014 to mid-2015, the city received $1.5 million from the ground lease and the percentage it takes of room sales, food and beverage and other services. This amount didn’t include transient occupancy tax.
Another condition of the agreement was that the city give up its right to approve a new owner in the event that the hotel goes into foreclosure. Rothenberg said this stipulation was necessary to secure the loan needed to buy the real estate. However because Westmont, which will manage the property in addition to owning a 15 percent stake in it, signed a franchise agreement with Marriott, the hotel will remain in the Marriott family of brands, which includes the Ritz Carlton, Residence Inn and Fairfield Inn and Suites, among others, for the next 20 years, regardless of foreclosure.
The companies’ lease agreement with the city expires in 2033, with the option of extending it up to 49 years.
As part of the transaction, the city will get a one-time fee of $780,000.
Renovations of the hotel are expected to start in September 2017 and last through December 2017. Changes to the exterior will include redoing part of the hotel’s façade, adding skylights and new lighting, and moving the putting green. All of the interior public areas will get new flooring, wall and ceiling finishes, artwork, furniture, sound systems and lighting. The guestrooms will get updated flooring, ceilings, window treatments, furniture, televisions and bathrooms. ER
