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Two groups plan Dunes takeover

June 14, 2002

Paul Clinton

NEWPORT BEACH -- Two potential concessionaires have entered final

negotiations to take over the Newport Dunes Waterfront Resort from its

current owners.

Real estate company Goldrich & Kest Industries, which is based in

Culver City, and Tahoe Shores have both entered escrow to buy the

resort's lease, buildings and marina, officials said.

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County officials are reviewing the deal to ensure that the two new

partner groups can operate the resort successfully.

"Our responsibility is to do the due diligence so we have a

responsible operator," said County Management Services Director Bob

Wilson. "The Newport Dunes is a very precious resource. We don't want to

see somebody screw it up."

The Newport Dunes Partnership, a subsidiary of Evans Hotels of San

Diego, has been looking for a buyer for roughly a year.

Preliminary estimates of the deal's price tag have come in at as much

as $50 million, according to Eastdil, the Los Angeles real estate company

handling the transaction. Wilson said the value of the lease is $15

million to $20 million.

No word has come yet as to whether the new buyers would exercise an

option to build a 275-room "family inn" on the land. The state-owned land

was approved for the hotel in a May 1983 settlement agreement, which also

allows for expansion of the boat slips, RV park, restaurant space and

retail shops. The city, county and Evans signed that agreement.

Calls to Goldrich partner Warren Breslow were not returned by press

time. The company also holds a lease with the county to operate the

Sunset Aquatic Park marina north of Huntington Beach.

Holocaust survivor Jona Goldrich founded the firm in 1956.

Michael Gelfand, the owner of the Terra Vista Bayside Village mobile

home park adjacent to the Dunes, is a principal investor in Tahoe Shores.

Current Dunes owners said the deal is only preliminary but confirmed

they were in escrow to transfer the lease, which would require approval

from the county's Board of Supervisors.

"We really can't comment until the deal is completed," Dunes partner

Tim Quinn said. "[The new buyers] are extremely qualified."

On May 7, supervisors unanimously declined to exercise their option in

the lease that gives the county the first crack at taking over the lease.

In October, city officials also passed on an opportunity to bid on the

resort's purchase.

On Thursday, Councilman Gary Adams said he still had concerns about

new owners assuming the lease and buildings.

"My fear is that somebody is going to build a low-end hotel there,"

Adams said. "They can build a larger hotel there without any review by

the city."

Other council members didn't share Adams' concerns. Mayor Tod

Ridgeway, a developer himself, said he wasn't worried about that

scenario.

"Based upon my knowledge of the buyer, I think it's going to be a

status-quo deal," Ridgeway said. "I don't think they have a desire to

build a hotel."

The parties hope to seal the deal in August, Wilson said.

At that time, they would need the supervisors' approval to transfer

the ground lease on the property.

The Dunes owners previously tried to gain approval for a

581,000-square-foot, 470-room resort and conference center. The city's

Greenlight Initiative, which was passed in 2000 to require voter approval

for certain large projects, killed the developers' hopes for a bigger

hotel.

* Paul Clinton covers the environment, John Wayne Airport and

politics. He may be reached at (949) 764-4330 or by e-mail ato7

paul.clinton@latimes.comf7 .

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