Work on $20-Million Hotel in Simi Valley to Resume

Security guard Arman Bautista has kept watch over the vacant shell of Simi Valley’s new $20-million luxury hotel ever since a multitude of builders and craftsmen abandoned the project last autumn because the hotel’s San Diego-based developer stopped paying his bills.

Every two hours, Bautista says, he climbs out of his trailer parked in the Ramada Hotel lot and patrols the perimeter of the sprawling flamingo-pink hotel and its unfinished 196 guest rooms, 4,000-square-foot nightclub, ballrooms, meeting halls and board rooms.

For six months, Bautista has been the only person to regularly frequent the grounds of what city officials see as the initial jewel in a crown of commercial and industrial development planned for the northwest Simi Valley.

“It can get a little boring, particularly after dark,� Bautista said. But the days of Bautista’s solitary watch appear numbered.

Construction of the hotel, halted abruptly last November when the developer, Mir Kazem Kashani, ran out of money and sought protection from creditors under Chapter 11 of the federal bankruptcy code, is likely to resume again this week, officials said.

“We’ve just worked out an agreement with the general contractor that should put workers back on the job within a week,� said David Commons, a Santa Barbara attorney and the court-appointed receiver in the case.

Loan Approved

On May 10, a U.S. Bankruptcy Court judge approved a $5.6-million loan to be used to complete the project, Commons said. He said the hotel is expected to be open by late September and will create between 100 and 150 jobs.

Simi Valley officials see the hotel as having strategic economic importance to the area, because the city’s West Side, where many corporations are located, is short on luxury accommodations and meeting space.

The planned Ronald Reagan presidential library, additional business growth and a regional shopping mall now in the planning stages are expected to generate demand for more hotel space, said Nancy Bender, executive director of the Simi Valley Chamber of Commerce.

City officials have high hopes for the West Side, which they view as having tremendous development potential. “It’s the Cadillac of industrial and commercial districts,� Deputy City Manager Bob Hunt said. “And yes, we believe the Ramada will be an anchor� for continued development of the city’s West Side along the Simi Valley Freeway.

Luring industry and business to Simi Valley has been a principal element of the city’s long-range plans, said Simi Valley City Council member Glen McAdoo.

More jobs would help the city cope with rising traffic congestion by reducing commuter flow, Mayor Pro Tem Vicky Howard said. It also would raise tax revenue for street-widening and other improvements, she said.

About 60% of Simi Valley’s work force of 42,000 people works outside of the city, Hunt said, citing information consultants have generated for city planning purposes.

Tax Revenue

The hotel also is expected to be a source of substantial tax revenue for the city.

In its first two years of operation, Hunt said, the new hotel is expected to contribute $135,000 annually to the city’s general fund. Simi Valley levies an 8% bed tax against hotel and motel income.

Hunt said the revenue the hotel generates for the city could double in ensuing years as it begins to draw more clientele.

But today, the hotel still is mired in the cost overruns that drove it into U.S. Bankruptcy Court once Kashani depleted an initial $15-million loan from County Savings Bank of Santa Barbara.

The property has been valued at $19.5 million in finished form, according to an appraisal recently completed, Commons said. But the total cost is “going to come in several million dollars above that when it’s done,� he said, and Kashani probably will have to sell the property.

There is only one other full-service hotel in Simi Valley’s west end, the Posada-Royale Quality Inn, which has 120 rooms, including 20 luxury suites and some meeting space.