Is the Se San Diego in Danger of Closing?
The Wall Street Journal reports today that the owner/operator of the Se San Diego has filed for Chapter 11 bankruptcy. While the move was done to protect assets, 5th Avenue Partners LLC is still in serious trouble, having defaulted on nearly $67 million in outstanding loans which were taken out to fund the hotel's construction.
The statement from 5th Avenue in the article also hints that the hotel could suffer greatly if cash isn't secured in time to pay employees and keep up hotel operations:
"The hotel business is very competitive and one of the most important variables that customers weigh when choosing a hotel is the level and quality of service," 5th Avenue said. "Unless the debtor obtains immediate authorization to use cash collateral to pay all ordinary and necessary obligations, the operations of the hotel will be adversely impacted."
5th Avenue also sent us a statement which said they were working toward a "mutually beneficial agreement" with lender West LB, AG to resolve finance issues and most importantly, to retain control and management of the hotel. For now, no foreclosure sale is set.
This weekend, the hotel (which is on our list for 4th of July picks) is asking $209 for a cityside king room so the good news is that it's definitely still open. And judging from the hotel's Twitter feeds, we see no outwards signs of trouble.
The bad news is we just don't know for how much longer. As always we'll keep you posted but if you have any scoop on what's going on here, please let us know.