reprinted from:
Bed tax seen as key to Ontario hotel remodeling
By Darla Martin Tucker, The
Business Press/California A Riverside company that specializes in renovating decrepit hotels wants to negotiate an occupancy tax deal with the city of Ontario that will help transform an aging hotel near Interstate 10. Dynasty Suites, owned by the Patel family of Riverside, purchased the Good Night Inn at 1801 E. G St. in January for about $5 million. The company wants to invest $12 million turning the 33-year-old building into an oasis for the executive traveler, complete with limousine and airport shuttle service, high-speed connections and wall-mounted flat screen televisions with DVD/CD capabilities. Dynasty Suites secured an $8 million loan this month from Far East National Bank to help fund the reconstruction, Pete Patel, Dynasty Suites operations manager said. However, completion of the deal is pending the outcome of future negotiations with Ontario. The bank is demanding the city's involvement before releasing the loan funds, Patel said. Ontario Economic Development Director Mary Jane Olhasso said Oct. 23 she is reviewing a consultant's report on the Good Night Inn. The data includes projected net operating income from the hotel's proposed renovation. The report and the Patel's request for future occupancy tax reimbursements will be reviewed by the City Council in closed sessions before a public vote, Olhasso said. "This property has been neglected for many years, and it's in the interests of the city to get it cleaned up," she said. The Patel family is asking the city to reimburse the bed taxes Dynasty Suites would pay to the city. The reimbursed taxes would cover renovation costs. Olhasso believes a similar deal was negotiated with the DoubleTree Hotel in Ontario. In April 1999, the Ontario Redevelopment Agency agreed to kick in up to $4.2 million toward the construction of 142 rooms and additional parking at the 339-room establishment. In exchange, the city-owned Ontario Convention Center would get first dibs over the next 30 years to reserve 250 rooms for convention center groups. City officials said in July 2000 they expected the deal to bring $14.3 million in bed taxes over 30 years. Jim Boitnott, president of the Greater Ontario Hotel/Motel Association and general manager of the Country Suites by Ayres hotel said hotel owners should pick up their own renovation tabs and not seek city dollars. "They should take care of that themselves. The city should not be involved," he said. Country Suites by Ayres owners completed a $300,000 remodel of the hotel's 167 rooms a month ago, with new decor, carpeting and furnishings. "We handled the expense of it solely ourselves," Boitnott said. Owners are changing the hotel's name to Ayres Suites, he said. Richard Walsh, general manager of the Ontario Convention Center said the city needs a wider range of choices to accommodate convention-goers. "Conventions need different rates and different levels of service," he said. The 188-room Good Night Inn will be gutted and the number of rooms reduced to create larger rooms overall. A free-standing on-site restaurant is slated for construction and the interior of the hotel will incorporate a theme based on the old Ontario Motor Speedway. The Good Night Inn was built in 1969 as a Holiday Inn. The hotel served as one of the city's premier lodging sites for racing enthusiasts attending California 500 races at a track that drew Mario Andretti, Al Unser and other racing greats of the 1970s. The 2-1/2-mile track replicating the Indy 500 opened Sept. 6, 1970, between Haven and Milliken avenues and closed 10 years later when the $25 million construction debt proved too high a price tag. "That was the only show in town in 1969-70 when the speedway went in. [The Holiday Inn] was one of the hotels built with the speedway in mind," Jerry DuBois, owner of DuBois Advertising in Ontario, said. DuBois Advertising represents Dynasty Suites and plans to prepare publicity for the hotel project. After the speedway was demolished. Large chain hotels eventually set up operations to serve freeway and airport travelers, including the Marriott, Hilton, Red Lion Inn, now the DoubleTree. "The Holiday Inn got lost in the shuffle," DuBois said. An upscale hotel like that could energize restaurant and other development in the area near the freeway and the Ontario Convention Center he said. The Patel family is awaiting a response from Ontario officials. "We're hinged on the city. We wouldn't plunk down $12 million if we were not confident [the hotel will succeed]," Patel said. The Patels founded Dynasty Suites in 1976;
renovating and operating a hotel in South Central Los Angeles. The company
currently owns five hotels. |
