Upscale to Unsafe: Once Popular Hotel is Declared A Public Nuisance
When it opened in 1964, one Orange County hotel quickly found itself an epicenter of the surrounding area. Locals in addition to celebrities and politicians, including Walt Disney and Presidents Richard Nixon and Ronald Reagan frequented this establishment. Unfortunately, a combination of deferred maintenance and competition from newer hotels thrust the property into decline in the 1980s. The structure languished, and calls for service to address incidents at the property increased.
After inspecting the property, a municipal code enforcement officer commented:
“I’ve never seen a commercial property as bad.”
The founder of the hotel reported to a local newspaper that Ronald Reagan had shaken his hand beside a statue of Napoleon in the lobby and commented, “Three good men.”
Source: OC Register
By the early 2000s, one community member said it looked "abandoned" with "a creepy, scary vibe to it. All the windows were broken and the tiny rooms were littered with trash; each room was ravaged. The best way I could describe it is... it looked like a disaster was coming and everybody grabbed their critical belongings and ran for their lives."
Photos of the property prior to receivership:
A disaster was coming. At 11 p.m. on a Friday night, Mark Adams, property receiver and President of CRG, was at home watching a movie with his family. The phone rang. There was an emergency at the hotel. One hour later, he found himself standing in front of the property, along with 75 firefighters trying to gain control of a major fire that had started on-site. Firefighters worked through the night from a defensive standpoint due to the property’s toxic conditions. Later investigation revealed that the fire was started by a person who had broken in and ignited a small fire after using a camping stove. The flames grew out of control. The trespasser was able to escape, but the building was not so lucky.
Unfortunately, empty properties are magnets for transients, vandals, and even curious children. Dilapidated buildings can conceal dangerous activity from neighbors and law enforcement, exactly as happened in this case.
Unsafe conditions and code violations can combine with an unsecured, blighted building to create a high risk of fire. In this case, this fire was the third to break out at the property in two years. With its location across the street from the city's zoo—and walking distance from dozens of local businesses, an elementary school, and single- and multi-family homes—the property presented a direct threat to the health and safety of this community.
CRG Removes the Dangerous Pedestrian Bridge at the Receivership Property within 48 Hours
With the public’s safety at stake following the fire, we got a structural engineer on-site immediately who recommended we tear down the pedestrian bridge that united the buildings of the property over a busy street. The bridge was found to be a danger to anyone who tried to cross it, as well as to anyone driving or walking underneath it. Already on-site to monitor the fire's progress and determine next steps, Mark Adams joined City officials for a 4 a.m. emergency meeting. They considered the impending traffic that would arrive with Monday morning commuters in just 48 hours and determined that Adams and CRG would need to remove the bridge by the end of the weekend.
Getting a heavy iron bridge removed on short notice—over a weekend—was no easy feat, but CRG’s team and extensive network of contractors were able to pull it off.
By Sunday evening the bridge was gone. The CRG team cleaned up the debris from the fire, ensuring it was not in the street, then fenced and resecured the property. CRG also installed 24-hour security to keep people away from the remaining structures. On Monday morning, this major thoroughfare was back open to commuters.
Receivership Provides a Fresh Start for a Once-Blighted Address
Prior to the fire, CRG had been researching a possible revival of the building, assessing the best use to fit the community's needs. Everything changed with the fire, and we adjusted the course significantly. Every stage of a receivership is reviewed by a judge, and our team submitted an emergency report detailing the fire and the now-flooded structure—flooded with water potentially contaminated with asbestos which had to be tested and handled correctly. With the roof collapsed after the fire, and the second story destroyed, it was determined that demolition was the only viable option remaining. With the Court's approval, CRG completed the demolition of the structures, cleaned up all debris, and donated the last surviving remnants of the hotel's history to the local historical society.
Image of the property before and after demolition by the receivership
A Phoenix Rising from the Ashes
With the nuisance conditions abated by the receivership, the owner was able to sell the property to a developer. This developer has recently had plans approved by the City to redevelop this property into two six-story, mixed-use structures. These will combine 603 residential units and 20,000 square feet of ground-floor commercial space, along with below-ground parking for over 1,100 vehicles. The full build-out is estimated to be worth $200 million. It's an ambitious plan—not unlike that of the property's original owner, who dreamed of creating a western-style hotel that would be the pride of the surrounding community. The new plans illustrate that the property is on its way to becoming an asset to its neighborhood once again.
Rendering of recently approved plans to redevelop the receivership property into a mixed-use property
Post-Receivership: Crime Decreases in the Surrounding Community by Over 50%
In the year preceding the health and safety receivership, calls for service in the receivership property’s locale spiked. As the receiver was appointed and the nuisance violations abated, there was a steady drop in service calls of over 50%. The area has changed with the removal of the public nuisance, and conditions have improved. Yet, even though plans to revitalize the site have been approved, it is still a vacant lot. Once the ground is broken on the redevelopment of the site, we anticipate that there will be further improvement in these numbers.
Graph created with data received from the City's Police Department
Health and Safety Receivership Increases Property Value Above Receivership Costs
When abating nuisance conditions at a blighted site, property values are almost certain to increase because the property is in far better shape post-receivership than it was before. At CRG, we often see a property's value increase beyond the value of the pre-receivership assessment plus the receivership costs, meaning that the property owner may be left with a surplus. In this case, the property was assessed to be worth $1.8 million pre-receivership. After conditions were abated, that value increased far beyond the receivership costs to $6.2 million—more than three times the property's original value.
