Tuesday, September 1, 2009 • Source: GlobeSt.com
By Brian K. Miller
LAS VEGAS – The Siegel Group Nevada has acquired St. Tropez; a 150-room all-suites hotel situated on approximately 4.09 acres across from the Hard Rock resort at Harmon Avenue and Paradise Road. The purchase price was $10.5 million. Financing was provided by the seller, an entity of Newport Beach, CA-based Tarsadia Hotels, which reclaimed ownership earlier this summer after a previous buyer stopped performing under the loan Tarsadia had provided, according to local industry sources. Tarsadia did not return a phone call seeking comment.
The two-story hotel surrounds a landscaped interior courtyard with a resort-style pool. The majority of the units contain living rooms with large Jacuzzi tubs and private balconies and patios that overlook the courtyard. Siegel Group’s chief executive Stephen Siegel tells GlobeSt.com that Tarsadia took the property back a couple of months ago and immediately closed the property because of the deferred maintenance.
Siegel says he heard about the acquisition opportunity from a broker friend and ultimately agreed to put “a good amount of money” down in exchange for the seller carrying back the remainder for four years at an “extremely favorable” interest rate. “The pool was green and the AC wasn’t working,” says Siegel, who plans to cure those problems and reopen the property in the next 30 days to 60 days and then invest an additional $1.5 million methodically upgrading the property over the next several months.
He describes the property as having “good bones” and a “unique layout” for Las Vegas that lends itself well for a repositioning as a higher-end adults-only boutique hotel. Planned amenities include a restaurant, a bar, an outdoor event center and a nightclub, as well as concierge and limousine service. Eventually, Siegel says he expects to employ 80 people at the property.
“This one-of-a-kind property with its unique layout and irreplaceable location possesses immense upside potential,” Siegel says. “Despite the challenging hospitality market we are all presently confronted with I believe the niche business model we plan on implementing will be an immediate success.”
Meantime, they have a lot of work to do to overcome a slew of bad reviews on travel websites due to the previous operator. On TripAdvisor.com, the first 10 reviews on the site, all from 2009 stays, gave the hotel the lowest possible rating – “terrible”–and describe experiences with rooms and staff that would scare off the vast majority of prospective guests.
Thankfully, Siegel Group has a history of successfully repositioning properties in Las Vegas. Over the past few years it has created a chain of flexible-stay residential properties called Siegel Suites from previously run-down properties in the region and, more recently, has acquired and refurbished a couple of gaming properties, the Gold Spike hotel and casino in Downtown Las Vegas, and the Siegel Slots & Suites (formerly Barcelona Hotel & Casino) near the entrance to Nellis Air Force Base in North Las Vegas. It also owns the Mt. Charleston Hotel in the Toiyabe National Forest, 35 minutes from Downtown Las Vegas.