Nongaming hotel in Las Vegas sold

By Liz Benston (contact)

Monday, Jan. 20, 2003 | 11:15 a.m.

An investment group has purchased the 149-room St. Tropez All Suites Resort Hotel, located about two blocks east of the Las Vegas Strip, from MeriStar Hospitality Corp.

The property, at 455 E. Harmon Ave., sold for more than $12 million to three different investment groups, according to Clark County records. Two of the investment groups, STT Land LLC and HNP LLC, were incorporated last month in California.

The property will be managed by Tarsadia Hotels, a large, privately held hotel operator based in Costa Mesa, Calif. that buys and manages hotels for investors.

The sale, recorded last week, follows a November transaction in which MeriStar sold the nearby Crowne Plaza hotel on Paradise Road to an investment group called LAX Hotel LLC.

Washington, D.C.-based MeriStar is a publicly traded real estate investment trust and is also one of the largest hotel REITs in the country.

The investment groups could not be reached and officials at the St. Tropez did not return calls by press time. Tarsadia couldn't immediately identify the owners and MeriStar declined to identify them.

Tarsadia Hotels also manages the Crowne Plaza -- the company's only other property in Las Vegas. The company manages more than a dozen properties, primarily in California, that total more than 4,300 rooms.

Aside from the Crowne Plaza and the St. Tropez, the company recently became the management group for a former Merv Griffin-owned resort in Palm Springs. The Givenchy Resort and Spa marks the only domestic spa offered by the French fashion company, said Lynn Kozlowski, marketing manager for Tarsadia.

The St. Tropez and the Crowne Plaza don't offer casinos.

It wasn't clear today whether the new owners would retain current St. Tropez employees or whether they would add a casino.

After last year's sale of Crowne Plaza, the new owners said they had no intentions to make significant changes at the property.

MeriStar has so far generated about $47 million from property sales and aims to sell more of its hotel assets in the first half of the year, said Paul W. Whetsell, the company's chairman and chief executive officer.

"We continue to pursue our strategy of selling non-core assets," Whetsell said in a statement.

The company owns more than 100 full-service hotels in major cities and resort locations, including the Hilton, Sheraton, Marriott, Westin, Radisson and Doubletree brands.

In 1999, MeriStar and Biltmore Vacation Resorts Inc. sued each other in federal court in Las Vegas over a failed deal to sell the St. Tropez for $30 million. The parties settled in 2000.

MeriStar alleged that Biltmore breached a sale agreement by failing to deposit enough money in escrow by a certain date. MeriStar terminated the agreement and Biltmore countersued. The Las Vegas company claimed its efforts to get financing for the deal failed after MeriStar refused to allow the company to conduct due diligence on the property.

Jack Carr and Harry Pflueger, managing partners with the hotel division of commercial brokers Insignia ESG, represented MeriStar Hospitality in the sale. STT Land didn't retain a broker.