The Street Seen: Viceroy Hotel
1819 Ocean Avenue @ Pico
The 8-story Viceroy Hotel, built in 1967, occupies a long-term ground lease on City of Santa Monica land on the corner of Ocean Ave and Pico Blvd.
In 1958, based ostensibly on the need for Civic Center parking, the City of Santa Monica acquires the property on the North East Corner of Ocean Ave and Pico Blvd through eminent domain proceedings.
In 1960, the former Santa Monica Elks lodge (1811 Ocean Ave), the only substantial building on the property, is demolished.
In 1966, Royal Inns of America1 obtains from the City a ground lease2 of 1.75 acres of the former parking lot of the Civic Auditorium. In 1968, the $2 MM, 8-story, 167-room Royal Inn Hotel (Santa Monica) opens - operating as a budget hotel. All glass exterior elevators are located on the west and east sides of the hotel. A Sambos restaurant occupies the ground floor.
In 1975, Royal Inns of America files for bankruptcy.3 The Royal Inn Hotel (Santa Monica) and the ground lease are acquired by David H. Murdock Development Co. in 1979. The hotel is renamed the Pacific Shore Hotel. In 1984, Murdock transfers the lease to Pacific Shore Associates with Tollman Hundley operating the hotel.4 The hotel is briefly closed after the 1994 Northridge earthquake.
In 1998, Sunstone Hotel purchases the Pacific Shore Hotel for $22 MM. Under the terms of the lease transfer agreement with the City, Sunstone makes $750,000 in (mostly cosmetic) improvements to the property, and decides to sell. In 2000, Elkor (later the Kor Group) acquires the Pacific Shore Hotel for $27 MM, and negotiates with the City for an extension of the ground lease from 2048 to 2065. Following a $20 MM renovation, the 162-room hotel re-opens in 2002 as the Viceroy (Santa Monica) - the first Viceroy Hotels & Resorts5 property.
In 2011, LaSalle Hotel Properties acquires the Viceroy (Santa Monica) for $80 MM (roughly $494,000 per room). The Viceroy Hotel Group continues to operate the hotel. Then LaSalle Hotel Properties is acquired by Pebblebrook Hotel Trust6 for $5,200 MM in 2018.
In 2023, following another 3-year, $21 MM renovation, Pebblebrook Hotel Trust’s 169-room Viceroy (Santa Monica) re-opens. Guest rooms and public spaces have been redesigned, an expansive outdoor space added, and a new signature restaurant and bar revealed.
Royal Inns of America is founded in San Diego in 1965 by former Travelodge executive Earl Gagosian (1923 – 1990).
The December 1966 ground lease with the City, Santa Monica contract number 1740, expires Feb 11, 2048. Under the terms of the lease, the City gets 8.5% of room rental, 5.0% of alcohol sales, 3% of restaurant sales, and 3% of miscellaneous income. The City also collects the regular hotel occupancy tax.
In 1975, Royal Inns of America, with 68 motor hotels, files for bankruptcy with $38 MM in debts and assets of only $21 MM.
It is useful to keep in mind the distinction between the hotel owner, the hotel operator, and the hotel brand or flag.
Viceroy Hotels is a hotel operator. Among many properties, it also operates Le Meridien Delfina on Pico.
Since 2010, Pebblebrook Hotel Trust also owns the Le Méridien Delfina at 530 Pico Blvd.