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After the grand opening of the trendy W San Diego in Downtown's Marina District, Jack vanHartesvelt, a principal in Kennedy Associates Real Estate Counsel, Inc., which partnered in the purchase, let it be known that he was in the market for another hotel in San Diego.
Now, nearly three years later, the W San Diego, the company's only hotel in San Diego, is for sale, and the well-heeled Seattlebased firm is nearing completion of a deal to buy the 421-room Hyatt Regency Islandia Hotel on Mission Bay for $62 million.
In partnership with CAPERS, the state's retirement system reportedly the wealthiest in the country -- Kennedy Associates formed KenCal LLC, which received unanimous approval from the San Diego City Council on Sept. 27 for an 18-year lease extension on the Hyatt Regency Islandia's 10 city-owned acres. With a 50-year lease in hand, vanHartesvelt said KenCal would be able to secure a loan of about $55 million to do the deal. After getting the necessary approvals and permits, he expects to be able to start renovating the property in the late spring or early summer.
Currently owned by Islandia Associates, the hotel was built in stages beginning in 1961. The Hyatt Corp., which has had the management contract since 1974, will be retained, and all of the hotel's approximately 300 full- and part-time employees will be asked to stay on, said Craig Benedetto, of Benedetto Communications, a spokesman for Kennedy Associates.
Although the W San Diego, which is owned primarily by a group of labor union pension funds, went on the block in relatively short order, vanHartesvelt said he expects KenCal will hold onto the Hyatt...