Hotel Seeks to Convert New Tower Into Senior Housing

The operators of the foundering Airtel Plaza Hotel near Van Nuys Airport, already seeking a reduction in the rent they pay the city, have asked for permission to convert the hotel’s posh new tower into housing for senior citizens.

The city must approve the change “to avoid the disastrous possibility of the closure of such a large and potentially viable enterprise,� according to the request.

Airtel, built on city-owned land, was an instant success when it opened in 1984, but earlier this year fell $110,000 behind in rent payments. Creditors helped Airtel make good on that debt, and have reduced its monthly mortgage charges 70%.

But the new request has drawn cold stares from the Riordan Administration, which is engulfed in fiscal crises of its own and is in a high-profile fight with airlines using Los Angeles International Airport over rents and landing fees there.

“There are many companies having financial difficulties,� said Bret Lobner, an assistant city attorney who has advised the airports department on the Airtel issue.

“Is it the city’s responsibility to give them concessions so they can continue to operate? . . . Which one can we pick? Who can we say no to?�

Airtel Plaza President James Dunn said there is no longer a market in the San Fernando Valley for the luxury suites and meeting rooms his hotel offers. And unless Airtel Plaza can shift its business, he said, Los Angeles may soon have one more empty high-rise.

“See? I can go to any room I want and it’s empty,� he noted, knocking briefly before throwing open the door of one of the rooms in the five-story tower, silent as a tomb on a recent weekday afternoon.

When the $6.5-million tower was added to the hotel in 1989, Airtel Plaza was riding the tide of a corporate boom. Van Nuys Airport, a publicly owned general aviation facility, was touted as the hot spot for development in the San Fernando Valley.

But in today’s sagging economy, the tower--which has hot tubs, a kitchen, fitness center and a private runway near its back door--is a white elephant and alternative uses now seem more attractive, Dunn said.

Conversion to a senior housing project for middle-income seniors requires few changes in the building’s layout, he said. Hotel rooms would become living quarters. The chandelier-decorated ballroom would become a cafeteria and activity center.

Although Dunn concedes that the combination of hotel and assisted living quarters for the elderly would be unusual, he called the conversion “a natural. . . . We have the housekeeping in place, security, food services, laundry, dry-cleaning.�

Airtel has hired Bowen Senior Living of Portland to do a feasibility study for the housing project and to manage it if the conversion is approved.

Lee Cory, Bowen’s president, said research shows there is an ample number of middle-income people 75 to 80 years old to provide a market for assisted living at the hotel.

Such a project would generate low profits in the short term, but has the advantage of being a reliable source of income over time, he said.