UPDATED OCT. 13, 2011
Rafu Staff and Wire Service Reports
Aside from the ongoing construction at its main entrance, everything seemed business as usual Tuesday at the Kyoto Grand Hotel and Gardens, after the announcement of an agreement that will rebrand the Little Tokyo landmark as the DoubleTree by Hilton.
A franchise license agreement has been signed with 120 South Los Angeles Street Hotel Operator LLC, the partnership that oversees the operations of the hotel, which will undergo an extensive, multi-phase renovation beginning in the coming weeks.
The 434-room property is expected to become the DoubleTree by Hilton Los Angeles Downtown in spring 2012.
The Rafu Shimpo reported on Saturday that escrow on the property closed Oct. 6 in the purchase by UBS Realty, a division of the Swiss financial services giant.
A statement from Hilton said the hotel will be managed by Newport Beach-based Rim Hospitality and will be the largest hotel in the Hilton Worldwide portfolio, serving the city’s downtown district.
“From London to New York and Chicago to Kuala Lumpur, DoubleTree by Hilton continues to introduce the world’s travellers to a fast-growing portfolio of outstanding city center hotel locations. By next spring, the new name, look and energy behind the DoubleTree by Hilton Los Angeles Downtown will be rewarding for hotel team members, guests and the community alike,” Rob Palleschi, global head of DoubleTree by Hilton, said in the statement. “We are proud to work together with hotel owners and Rim Hospitality on this exciting hotel development in the heart of the City of Angels.”
As of last week, 10 staff members, including the general manager and controller, were let go as part of the restructuring. Joe Kuhn, the hotel’s new general manager, was unavailable for comment on Tuesday.
The sale to UBS means the Kyoto Grand has successfully emerged from bankruptcy, but also ends its branding as a Japanese-themed hotel. Last November, a spokesman for 3D Investments, then the owner of the Kyoto Grand and the adjoining Weller Court shopping plaza, said there were plans to retain the Japanese character of the facility.
3D Investments, a Century City-based real estate firm, purchased the hotel and Weller Court from the East West Development Corporation for $54 million in August 2007. A restructuring plan was approved by a federal bankruptcy court in April, giving the go-ahead for the Doubletree conversion.
At this time, the status of the future – or ownership – of Weller Court is unclear.
There was little reaction in and around the Kyoto Grand on Tuesday. One shopkeeper in the hotel seemed exasperated that the iconic property has changed hands again–the second time in the past four years–but felt that her business would see little change.
Kaz Masukawa, who has driven a shuttle bus for Japanese tour operator JTB for several years, said some of the vendors who service the hotel were unaware that another sale was pending.
“Our company recently published a new catalog, listing the Kyoto Grand as one of the primary hotels,” Masukawa explained. “Now, tourists coming from Japan are going to be confused when they can’t find it. I worry that there will be some cancellations and people will ask for refunds.”
The hotel originally opened in 1977 as the New Otani Hotel and Gardens, operated by the Tokyo-based New Otani Hotel chain and designed to be a luxury destination for Japanese visitors to Los Angeles. For years, Japanese and Japanese Americans would go to the New Otani to eat at the now-shuttered Thousand Cranes Japanese restaurant and enjoy the rooftop garden. In its New Otani and Kyoto Grand incarnations, it has hosted many community functions, including Oshogatsu New Year’s events and the Nisei Week
Mark Burden, president and CEO of Rim Hospitality, said in the press release, “This new agreement with an outstanding hotel ownership will allow us to create an outstanding
hotel to meet, work or play in one of downtown’s most ideal locations.”
Burden added that Hilton’s guest loyalty program and extensive sales, marketing and technology network will help benefit the hotel as well as the downtown Los Angeles business community.
“We look forward to partnering with the local business community and Little Tokyo Community Council on enhancing the Japanese Garden and overall experience at the hotel,” Burden said.
Situated one block from City Hall, the location of the soon-to-be DoubleTree is within minutes of the Walt Disney Concert Hall, Geffen Contemporary at MOCA, Olvera Street and a dynamically diverse downtown district. Towering 21 stories above downtown Los Angeles, the full-service hotel will offer 15,000 square feet of meetings and events space for up to 650 guests, a business center, a fitness center and multiple food and beverage outlets. A lushly landscaped, half-acre rooftop garden, inspired by an ancient garden in Japan, serves as a hotel and community centerpiece that overlooks the stunning Los Angeles skyline.
Previous story: Oct. 8, 2011:
UBS Buys Kyoto Grand for $45 Million
By GWEN MURANAKA
RAFU ENGLISH EDITOR IN CHIEF
Escrow closed on the Kyoto Grand Hotel and Gardens on Thursday, marking the second time in the past four years that the iconic Little Tokyo hotel has been sold.
The subscription-based Real Estate Alert newsletter reported that the 434-room hotel was purchased by UBS Realty, a division of the Swiss financial services company, for $45 million.
UBS plans to run the hotel under the Doubletree by Hilton name. On Wednesday, the hotel staff was notified of the sale, which had been widely anticipated. Ten staff members, including the general manager and controller, were let go as part of the restructuring.
One of the fired staffers, who asked not to be identified, said that the changes were expected. The staff member was notified of the firing at 4:30 p.m. on Wednesday.
“I was the last one hired, so I’m probably going to be first fired. I hope it will be a positive thing for the Little Tokyo area, but I don’t know,” the former employee said. “When a new management company comes in, they want their own people.”
The sale brings the Kyoto Grand out of bankruptcy, but also ends its branding as a Japanese-themed hotel. The hotel originally opened in 1977 as the New Otani Hotel and Gardens, operated by the Tokyo-based New Otani Hotel chain and designed to be a luxury destination for Japanese visitors to Los Angeles. For years, Japanese and Japanese Americans would go to New Otani to eat at the now-shuttered
Thousand Cranes Japanese restaurant and enjoy the rooftop garden. In its New Otani and Kyoto Grand incarnations it has hosted many community functions, including Oshogatsu New Year’s events and the Nisei Week Awards dinner.
Last November, Kyoto Grand owners 3D Investments submitted their plan in U.S. Bankruptcy Court to sell the hotel, which had fallen into default. 3D Investments, a Century City-based real estate firm, purchased the hotel and the adjoining Weller Court shopping center from the East West Development Corporation for $54 million in August 2007. The property emerged from bankruptcy in April, giving the go-ahead for the Doubletree conversion. At press time, there was no word on the status of the sale of Weller Court.
The hotel will be managed by Rim Hospitality of Newport Beach, a firm that also manages the Sheraton Los Angeles Downtown Hotel and the Sheraton Universal Hotel. Joe Kuhn, who previously served as general manager of the San Diego Downtown Courtyard by Marriott, will oversee the hotel’s transition to the Doubletree brand.
Mike Okamoto, chair of the Little Tokyo Community Council, said he was optimistic, observing that the sale ends all of the speculation and uncertainty surrounding the hotel since news broke last year that it was in default. He said he hopes to invite the management team to an upcoming LTCC meeting.
“There was always anxiety in planning events. Now the case is closed and we can get started,” said Okamoto.
He cited American Commercial Equities, the owners of Japanese Village Plaza, who have enhanced their property since its purchase, as a positive example that Doubletree could follow. The sale of both New Otani and JVP in 2007 led to protests and questions whether Little Tokyo could maintain its unique cultural identity. He said there was little interaction with 3D Investments during their time as owners and he hoped the new owners will develop a good working relationship with their J-Town neighbors.
“They (American Commercial Equities) have been very sensitive to our concerns, and have spent so much money upgrading the Village Plaza. Our policy is we will welcome them if they respect our culture and heritage,” said Okamoto.