As of this week, the Hilton Scotts Valley-Santa Cruz has new owners and a new hospitality management company.
The hotel and surrounding property went up for auction on the steps of the Santa Cruz County Building at 701 Ocean St. on Tuesday, Jan. 18, and no bidder stepped forward to top a $10.15 million initial bid by the beneficiary, a group of investors identified only as CCMS 205-CDI La Madrona Ltd.
“Just like we suspected, it will go back to the bank,” general manager Rich Higdon said shortly after the auction ended. “We’ll be contacted by the lender and continue running the property. I know of similar cases. It could go on for months, or it could go on for years.”
Newport Beach-based RIM Hospitality replaces Endeavor Hospitality as the hotel’s management company. RIM manages 77 hotels across the country and took over as soon as the sale was complete Tuesday.
A team including Chief Operating Officer Russ Cox and Regional Director of Sales Jill Del Greco arrived at the hotel to start running its operations. Cox ran the Dream Inn in Santa Cruz for many years, Del Greco said.
Del Greco said Wednesday, Jan. 19, that the Hilton’s staff, including Higdon, will remain on board. However, R.J. Escobar and Mitch Hatch, partners with Endeavor Hospitality, are no longer with the hotel.
“We’ve been doing this a long time,” Del Greco said. “We’re trying to keep things normal as much as possible.”
Del Greco said RIM will have to get the hotel up to Hilton’s standards as part of a property improvement plan, but she noted that the hotel is in excellent shape.
“The rooms are fabulous,” she said.
There is not yet a timeline on any upgrades, she said.
“We truly try to keep the business as consistent as possible.”
At a foreclosure auction, a bidder must pay in cash to buy the property. No bidder emerged during the proceedings on the county building steps, though more than 20 people watched with interest.
The low bid of just over $10 million from the bank was surprising, considering the property has an assessed value of $13.32 million, according to the County Assessors Office. There was an unpaid balance of $16.78 million on a $17 million loan from 2005, however.
Managers have reported that the hotel operates in the black and that Hilton likes the property and will keep its name on the hotel. It has 156 guest rooms, 18 suites and a full-service restaurant.
