Ridgway Sells Troubled Newporter : Westgroup, Columbia Savings Are 5th Owners in 23 Years

The Newporter, the granddaddy of Orange County’s fast-rising luxury hotel market, has changed hands for the fifth time in its 23-year history.

Its new owners--Westgroup Hotels Inc. and Columbia Savings--paid an estimated $30 million for the landmark Newport Beach hotel, which is troubled by declining occupancy rates and a promise of stiffer competition in its market.

Westgroup, a Los Angeles-based development company with a penchant for acquiring stately hotels and revamping them, and Beverly Hills-based Columbia Savings bought the Newporter from Ridgway Ltd. of Newport Beach, which had owned the hotel since 1981. About three months ago, Westgroup also purchased the Biltmore in Los Angeles from Ridgway and plans to spend $25 million on renovation there.

Westgroup intends to spend $5 million this year on improvements at the Newporter, situated on 26 acres near Newport Center. Executives said the changes will include a complete redesign of the entrance and lobby. In the three years that it owned the hotel, Ridgway spent more than $12 million on renovations.

Bob Williamson, president of Westgroup Hotels, said occupancy rates at the 311-room resort have declined during the last five years. Although Williamson would not disclose the hotel’s financial status, he said he plans to make the hotel profitable within one year. Local hoteliers and other lodging industry experts speculate that the rapid emergence of luxury hotels in Orange County has hampered the Newporter’s business.

Williamson agrees that competition is stiff. Although Westgroup has plans to purchase at least two more hotels in the next two years, it will look outside of Orange County. “There are too many hotel rooms here already,” he said.

However, Williamson said, “we think of this as one of the unique spots in America. Our goal is to be involved with properties that challenge our creativity, not to build glass-and-brass hotels.”

David M. Brudney, a hotel management consultant from Palos Verdes, said the Newporter is doing whatever it can to keep up with the drum beat of new first-class hotels in Orange County. “But in the competition for corporate business, some hotels will eventually close up shop,” he said.

The 397-room Ritz-Carlton in Laguna Niguel, viewed by many as the county’s only resort where the hotel itself is the draw, opened in August. Although the $100-million resort had a slow start, it posted February occupancy rates near 85%, according to William Hall, the Ritz-Carlton’s general manager.

Meanwhile, the Newporter’s average occupancy rate for 1984 was below 75%; the new owners hope to boost that.

The Newporter’s former general manager, Leah Marshall, now director of retail sales at South Coast Plaza, says the Newporter cannot compete head-on with the Ritz-Carlton.

“They’d have to gut the rooms and start from scratch,” she said. But the Newporter will always do well, she said, “because of its location (near John Wayne Airport) and because it is so atypical of other hotels in the area.”

The Newporter was opened in 1962 by George Buccola and sold five years later to J.C. Jacobson, who operated the resort for just two years. Phoenix-based Del E. Webb Corp. bought the hotel, then sold it to Ridgway. Westgroup took over ownership Feb. 28.