By Joe Tash
A new chapter in the 90-year history of The Inn at Rancho Santa Fe began last week when JMI Realty, the real estate investment firm of San Diego Padres owner John Moores and his partner, Ranch Santa Fe resident John Kratzer, purchased the property for $28 million, according to county property records.
JMI plans to spend $12 million on renovating more than half of The Inn’s 107 guest rooms, in a project that will start in September and conclude next May. The renovation project will also involve moving and upgrading the historic hotel’s spa.
This week, the new management company brought in by JMI, Benchmark Hospitality International, was assuming operations of The Inn, with a management transition team in place, said Kratzer.
The property fit in well with JMI Realty’s goals of acquiring properties that can be renovated and repositioned in the market, and company officials were also familiar with The Inn and its central role in Rancho Santa Fe’s history and civic life, Kratzer said.
“We tell people that perhaps the greatest amenity of this asset isn’t the tennis court or spa or golf course. It is the location and the position that the hotel holds in the community. It is, we think, the heart of the community,” Kratzer said.
Kratzer and his colleagues were scheduled to attend this week’s (April 19) Rancho Santa Fe Association board meeting to introduce themselves as The Inn’s new owners and discuss their plans for the hotel, which sits on 21 acres at the entrance to the Rancho Santa Fe village, along Linea Del Cielo.
“The Inn has been a keystone of the community for years,” said Pete Smith, Association general manager. “Our biggest concern is if that would change. But from my perspective, their proposals on the table are very much in keeping with the character of The Inn and that’s a significant positive for the community.”
JMI purchased The Inn from the Royce family, which had owned it since 1958. Escrow closed on the deal on April 11.
The Inn opened in 1922 with 12 guestrooms, and was originally called “La Morada,” or “house of many rooms.” Over the years, The Inn has hosted presidents, royalty and Hollywood stars, according to a JMI Realty press release.
JMI Reality is the general partner of the ownership group, and the purchase of The Inn is the first of a series of investments that will include Siguler Guff, a New York-based real estate investment firm.
Renovation of the property will take place in phases. First, said Kratzer, will be improvements to computers and infrastructure. Next, in the fall, will come the room and spa upgrades.
The company’s vision, he said, is “to invest the money to make it the kind of luxury hotel experience that the community of Rancho Santa Fe deserves, to return it to the kind of awareness in Southern California that it once had.”
The new owners want The Inn to be a destination for Southern Californians seeking a weekend getaway, whether it’s to relax by the pool and dine at local restaurants, or take in the horse races at Del Mar. They also want it to remain a social hub for the community, where weddings, parties and other special events are celebrated.
The average daily rate for rooms at The Inn peaked at $292 in 2006, but dropped after the lodging industry suffered its worst year ever in 2009, Kratzer said. The 2011 average at The Inn was $217, and Kratzer said it is hoped the recovery will bring prices back to their pre-recession levels.
The Inn’s general manager and executive chef have left, said Kratzer, but the new management company is interviewing the rest of the approximately 80 employees. “It’s the intent to keep as many of the existing employees as we possibly can,” he said.
Kratzer said his partner, Jim Chatfield, will be overseeing the renovation project.
“We are really excited. This is a special, special hotel,” Kratzer said. I live in Rancho Santa Fe and I think it’s the greatest place on earth and I want The Inn at Rancho Santa Fe to be the greatest place on earth for somebody to go stay.”
Visit www.theinnatrsf.com or call (858) 756-1131.