Ownership of Oro Valley's top employer changed hands recently with the purchase of the 428-room Sheraton El Conquistador Resort and Country Club by a newly formed partnership of Hilton Hotels Corp. and CNL Hospitality Corp. as part of a $121 million two-hotel purchase.
The El Conquistador was purchased from the New York-based Metropolitan Life Insurance Co., which owned a nearly 90-percent share in the resort and had an agreement with hotel owner Starwood to operate the facility under Starwood's Sheraton brand name.
Also purchased by the partnership was the 500-room Doubletree Hotel at Lincoln Centre in Dallas. The sales were completed Dec. 24.
While company officials declined to break down the total $121 million purchase price for the two properties, a Nov. 21, 2002 supplement to the CNL Hospitality Properties prospectus estimated the purchase price for the El Conquistador at $69 million and $52 million for the Dallas property. Lease arrangements relating to the two properties called for an initial five-year lease with five five-year options, according to the prospectus.
As of that time, CNL Hospitality Properties had made initial commitments to acquire five additional properties, including the El Conquistador and the Dallas property, for a total of $326 million. The three other properties included a Doubletree hotel in Arlington, Va., a Marriott in Seattle, Wash., and a Renaissance Hotel in Tampa, Fla. These purchases were contingent on CNL Hospitality's ability to obtain additional funds through the receipt of additional offering proceeds and or debt financing, according to the prospectus.
CNL Hospitality, the Orlando, Fla.-based hotel investment and development subsidiary of CNL Financial Group, has acquired 55 hotels and has eight others in the pipeline for a total of 16,500 rooms in 22 states. It will own a majority interest in the partnership, and Hilton will run the properties under long-term management agreements while retaining a minority interest in the partnership.
CNL Financial Group has more than $5.3 billion in assets, representing 2,850 properties in 49 states.
Hilton Hotels develops, owns, manages or franchises more than 2,000 hotels, resorts and vacation ownership properties with a portfolio that includes such other brands as the Doubletree, Embassy Suites and Hampton Inn.
Taking over later this month as general manager of the renamed Hilton Tucson El Conquistador Golf and Tennis Resort will be Tim Booth, formerly of the Doubletree Hotel and Executive Meeting Center in Somerset, N.J. Booth will replace John Fuller, a former president of the Southern Arizona Lodging and Resort Association, who left late last year to go to the Westin Pasadena in California.
Paul Canez, director of sales and marketing for the El Conquistador, and Hilton's marketing representative, said Hilton's sales offices in 30 different companies, a one million-member-plus corporate and leisure travel network and Hilton's computer technology should add substantially to bookings which have been basically flat at the El Conquistador for the past year.
Job openings are currently being offered in all categories from sales to services and should boost El Conquistador employment from the 650 workers now on the resort's rolls, he said.
The El Conquistador just celebrated its 20th anniversary in December after completing a $2.8 million renovation of all its rooms. Renovations to the resort's two golf courses were completed the previous year and improvements are currently being made to the resort's Desert Springs pool bar. These are expected to be finished by the end of March.
"We are delighted to participate in another terrific transaction with CNL, the pre-eminent capital source for the lodging industry," said Matthew J. Hart, executive vice president and chief financial officer for Hilton Hotels Corp. "This transaction allows us to advance our goals of expanded distribution and increased fee income."