The Four Season Aviara Resort has been embroiled in a dispute between hotel owner and management.
Here’s a link to today’s U-T article on the judge sending the case to arbitration:
http://www3.signonsandiego.com/stories/2009/may/27/bn27aviara-in-court/?northcounty&zIndex=106511
An excerpt on where the trouble started, the refinance of the property:
The very public quarrel over management of Aviara landed in court after Broadreach, owner of the resort since 1998, notified Four Seasons in late March that it was terminating its contract for failing to run the property in a “cost-effective manner.”
Broadreach wants to replace the Four Seasons management group with New Jersey-based Dolce Hotels and Resorts.
Four Seasons, however, would not go quietly, refusing to leave the resort and turn over hotel records and books to the owners. It went so far as to erect barricades at the entrance to the 329-room resort, according to the owners’ attorneys.
In a statement earlier this month, Four Seasons maintained that the dispute relates to the 2009 operating budget for Aviara and the owner’s “obligation to provide working capital necessary to fund debt service.”
While Aviara is profitable at the operational level, Four Seasons said, the owners took on more debt than “the resort can now service” when they refinanced the property in 2006.
When the Four Seasons took over in 1998, the timing couldn’t have been better – a number of new Aviara tracts were underway, and values soared. The Four Seasons resort and the Aviara community grew together, are they still intertwined?
Dolce may be a fine hotel group (their portfolio: http://www.dolce.com/portfolio/portfolio.asp) but they don’t have the same sizzle as the Four Seasons.
If the Four Seasons gets the boot, could it have an effect on surrounding home values?
When KSL took over the La Costa Resort in 2002, they spent millions on improvements – but it was a weathered facility and needed every penny of it. It is an older and more storied resort, having hosted PGA events for years, and a stop on the women’s tennis tour. But today there isn’t much relationship between the resort and surrounding real estate values, if any.
Four Seasons Aviara resort and the surrounding community has had a mutually-beneficial relationship when the real estate values were on the rise, could a nasty public dispute have an effect on today’s buyers?
I don’t care what nice properties Dolce may manage, they’re undoubtedly amateurs next to Four Seasons. Nobody can touch Four Seasons management. They run by far the best, most consistently superb hotel chain in the world. The loss of the brand will be a blow to Aviara real estate for sure. It’s also a bummer for those of us who occasionally take advantage of the place.
Aviara is the Four Seasons. Take the brand name away and yes its a loss as anyone outside of Carlsbad only knows Aviara for the Four Seasons resort. Dolce is like Best Western at Aviara…
Best Western at Aviara…
Not quite the same ring to it as The Four Seasons Aviara.
Four Season’s is synonymous with 5 star (Aviara is a 4 star) resorts. It would be a shame to see a different mgmt. company for the hotel’s sake.
However, I doubt that a change to management at the hotel would have a “measurable” affect on the residential real estate values in the immediate community. There are too many other variables at play in the home pricing.
Try this:
“Aviara, we’ll leave the light on for you”.
Until I read about this dispute a few weeks ago, I had no idea that FS didn’t own that property.
And I think the above posts are absolutely right – there is NO other management company that can match the Four Season’s sophisticated, upscale image.
To boot them will be pure insanity, as it appears Broadreach is about to find out.
So reading only a little between the lines, it sounds like the owners hit up the resort ATM and now want the operators to dumb down the place so that it brings in more money. The glaring fallacy is that the strategy will only work for the limited time during which the place is still coasting along as a top class resort due to prior investment. As deferred maintenance builds up and high-quality personnel are replaced with cheaper “don’t really care” staffers, it will gradually relax back to a second-tier property that people won’t go out of their way to visit any more than any other second-tier property.
Four Seasons should just walk away and let Broadreach destroy the property and eventually end up BK.
I agree with LC Jim that it would probably have negligible effect on area pricing. It is still La Costa, after all. The ocean isn’t going anywhere, no is the overall desirability of the location. Does Del Mar lose its value without the track?
“It sounds like the owners hit up the resort ATM and now want the operators to dumb down the place so that it brings in more money”
If that’s the case, what they’re also asking FS to do is milk and diluate their brand image purely for the owner’s profit, not FS’. It’s like demanding Luis Vuitton sell t-shirts. Even if you can prove it would make money indivdiually, it would lose money for LV.
Dwip, I agree on the staff comment. The thing that defines Four Seasons for me is the staff. They’re almost all making a career out of it, and it really shows. A job there is not a means to an end, it is THE end. No part timers passing time while they look for something else. Their people are fully invested in what they do from the valet guy to the general manager and it really shows. There is no way Dolce will pull that off.
Stupid owners.
Agree with the others. If the Four Seasons goes, the “upscale image” of the surrounding area takes it on the chin.
One can already see how the homes around the La Costa Resort just don’t have that “special something” that used to differentiate them from all the others back in the “Rat Pack” days.
The resorts are what make La Costa unique, just like the race track makes Del Mar unique. Take these things away, and the areas will lose their luster. Not saying they’ll go all South Central L.A. on us, but their image will definitely change, and probably not for the better.
Four Seasons, however, would not go quietly, refusing to leave the resort and turn over hotel records and books to the owners. It went so far as to erect barricades at the entrance to the 329-room resort, according to the owners’ attorneys.
So they want to still ‘operate’ the property despite the owners desire that they don’t? Four Seasons does not have a capital risk in this property but the owners do.. and besides… the owners own the property. Considering that Four Seasons does not want to turn over the books, I am wondering if there was a little bit of embezzling going on.. I think there may be more to this story than it looks like.
“We understood the judge’s point, but we obviously face an emergency in that each and every day we have someone who’s writing checks on our bank account and incurring obligations that we have to honor,” said William Brewer, an attorney for Broadreach. “They’re taking actions that burden this hotel, and as a matter of law, when you’re denied access to your real estate or the business you own, those harms are irreparable.”
having spent time there, i’ll echo the loss of the 4 seasons brand would diminish the aviara’s standing.
Irvine company did something equally retarded and took over the 4 seasons at Fashion Island, renamed it “the island” (thus confusing almost anyone not familiar with the location) and now have a nice hotel that lost 80% of the name recognition and prestige it once had. Anyone who isn’t obsessed with shopping a few feet away now stays at the Montage, Ritz Carlton, or St. Regis all just 15-20 minutes drive down PCH which are far nicer places to stay and in the same price range.
Well Four Seasons has a contract, and the owners are in breach of contract unless they can prove something (which is exactly what they’re trying to do). Until said proof, the owners are not entitled to breach said contract. Furthermore, Four Seasons has invested a lot of money into managing the resort, and ironically as a franchise they have a lot more at stake than the owners who apparently have low equity on the property. So yes they can walk but that’s lose-lose.
I don’t know that it’s the case here, but just because you own the property doesn’t mean you have any right to see the books. That said, it’s probably in the contract in one form or another and may be conditional.
There are other chains that have the same impact as the Four Seasons like the St. Regis, Ritz Carlton or Fairmont. After these you step down ino the W Hotels, the JW Marriots and such.
Why do the people go to Aviara? Is it mostly conferences or pleasure?
The owners are apparently idiots – article in North County Times on May 11 states “The owners’ attorney, William Brewer III of Dallas, said they expect Dolce to enhance guests’ experiences”. Are they kidding? Go from Four Seasons class of service to, as previous posters have written, “Best Western” quality and “enhance guests’ experiences”? I think not. And I know many, many local residents, myself included, who provide significant revenue to the resort, who will stop going there once Motel 6 takes over. Good luck to the resort’s owners.