Plan on Table to Convert Kyoto Grand to Doubletree

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Kyoto Grand Hotel and Garden, the landmark Little Tokyo hotel, could soon be wearing the Doubletree nameplate. (MIKEY HIRANO CULROSS/Rafu Shimpo)

By MIKEY HIRANO CULROSS
RAFU STAFF WRITER

The Kyoto Grand Hotel and Weller Court, two of the more iconic locations in Little Tokyo, could soon be wearing the logo of the Doubletree hotel chain.

If a plan filed Nov. 4 in U.S. Bankruptcy Court is approved, operations of the 21-story hotel would be converted to the hotel group, whose name is officially to be changed to Doubletree by Hilton, to reflect the brand ownership of the hotel giant. The deal would bring the hotel and its adjoining shopping plaza out of bankruptcy.
Under the agreement, which is expected to be approved by the court in late December or early January, the hotel and Weller Court properties will continue to be owned by Century City-based 3D Investments. To make the $54 million purchase in 2007, 3D Investments created Little Tokyo Partners LP, which filed for Chapter 11 reorganization last July 15, after the loans went into default.

The proposed plan pre-empts the sale of the properties organized by the bank that currently holds the loan, North Carolina-based First-Citizens Bank and Trust. The buyer was to be Seville Gateway Investments, the investment arm of Torrance furniture maker Seville Classics, which filed a purchase agreement on Oct. 18 and deposited $5 million in an escrow account set up for the sale.

A source close to the proposed agreement provided details of the latest filing to the Rafu, stressing that the transfer of the hotel operations to Doubletree is subject solely to court approval. Neither the bank nor any of the properties’ other creditors have the authority to halt the deal, the source said, because all back interest and unsecured debt will be paid in full. Payments per the original loan terms would resume, toward full maturity in 2019. $33.6 million remains on the loan for the hotel, $10.4 million on Weller Court.

The new reorganization plan commits $8 million to the property, to fund the conversion of the hotel to Doubletree, including  upgrades of restrooms and public areas as well as overdue maintenance. It also provides access renovations and cash to settle an Americans with Disabilities Act lawsuit brought against the hotel.
The source, speaking on condition of anonymity, also noted that the Japanese ambience of the hotel, which was built in 1977 by Tokyo-based New Otani Hotels, will remain uncompromised, with no change in the decor, theme or food.

Chris Komai, the Japanese American National Museum’s public information officer, echoed the concerns of the local community about the impact that the hotel’s change of face may have.

“Our hope is that any new business or new business owner will want to work together with the traditional historic Little Tokyo organizations, businesses and residents to ensure everyone’s success,” Komai told the Rafu. “It is to the benefit of any new business or new business owner to preserve and promote historic Little Tokyo. Otherwise, you ignore a unique asset.”

3D Investments also owns hotels and shopping areas in San Francisco’s Japantown. Recent sales of historic sites there and in Little Tokyo stirred fears that the non-Japanese buyers may fail to preserve the cultural heritage of those locations.

On the Web site BlogDowntown, which was one of the first outlets to report on the changes for the Kyoto Grand, mixed reactions to the proposal have been posted. One entry read, “Please do not become a generic hotel. [It would] be a shame to degrade the Japanese identity of Little Tokyo,” while another countered, “If a bigger chain can make the necessary changes to attract clientele to the area, then let them have it. A big chain hotel can also bring in with it a lot more business and help it become the link to the other parts of downtown.”

The hotel is expected to continue to be managed by Virginia-based Crestline Hotels & Resorts and plans are to retain all current employees. The owners reportedly have met with employees to explain the change to Doubletree as the new franchisor and to answer questions about the proposed changes.

As a part of the Doubletree chain, the hotel will have access to the company’s worldwide reservations system, as well as its name recognition, which can be a valuable selling point in attracting business and vacation travelers.

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3 Comments

  1. I don’t mind if it becomes a Four Seasons as long as they recognize that they are in a unique portion of Los Angeles and act accordingly.

    The Hotel Tomo and the Hotel Kabuki in Japantown, San Francisco, are not Japanese-owned but they have maintained a Japanese atmosphere.

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