In the depths of the recession, one of the priciest places to stay in Los Angeles tried to increase its bed count by going down market, but called off the venture in November as the new beds failed to fill.
Despite a posh pool overlooking the Pacific and personal car service, the Malibu refuge couldn’t consistently fill the new rooms at its lower price – about $1,000 a night.
So what kind of swanky boutique considers a four-figure room rate a discount? It’s Cliffside Malibu, an ultraluxury addiction treatment center on a Malibu canyon road.
“It was too ambitious to try in that climate” is how founder and Chief Executive Richard Taite describes the facility’s aborted expansion plan.
Just one of the many rehabilitation centers that have popped up in the coastal city, Cliffside is not as well known as its more prominent and established neighbors such as Passages Malibu and Promises Treatment Centers, which have gained notoriety during celebrity relapses played out in the tabloids.
Founded seven years ago, Cliffside has stayed off the radar even as it has treated foreign oligarchs, the occasional celebrity and high-powered chief executives, one of its specialties. Clients spend between $53,000 and $68,000 per month to recover at Cliffside, where 1,000-thread-count designer sheets line the beds and chefs prepare vegan meals on call.
But the facility has found it a struggle trying to expand beyond its existing 12 beds, discovering that it is far easier in some ways to serve a very elite clientele than to treat the merely rich or the upper middle class.
It hasn’t helped that by some counts there are as many as three dozen treatment centers in Malibu vying for patients.
Richard Rogg, who founded Promises in 1988, cautioned that the industry has grown increasingly competitive in the past years as treatment facilities open.
“You can’t just open a program in Malibu and hope that it’s going to be full,” Rogg said.
Cliffside practices what is called “stages of change,” a treatment that is individually tailored to patients depending on the severity of addiction. Those in complete denial spend much longer than those who recognize they have a problem. The average length of stay is 62 days.
By contrast, rival Passages, which reportedly charges $88,500 per month for one of its 29 beds in Malibu, subscribes to a theory that there are four underlying causes of addiction that can be treated through its custom-tailored approach.
Intimate setting
However, for any differences that distinguish them, the two centers are very similar in what they offer: high levels of personal attention in an intimate setting.
“I didn’t come out there for the view of the Pacific. They’re all nice. I just liked the small setting,” said one executive from Kansas City, Mo., who wanted to remain anonymous and paid $100,000 for alcoholism treatment at Cliffside.
Indeed, the desire among clients for such treatment has posed a conundrum for Taite, who often has a waiting list for his dozen beds in two cottages on Andromeda Lane: how to expand without compromising a personal approach. In some years, the center has turned a $2 million profit on $7 million in revenue. “Anybody else would have been expanding,” he said.
Taite first tried to do so in February 2009 when he opened what was called CM2 (Cliffside Malibu 2), six additional beds in a third cottage on his two-acre canyon property. He charged what he termed upper-middle-class clients $35,000 a month.
The program was similar to his existing services but the personnel were not his “all stars,” Taite acknowledged.
“I might have two or three billionaires at a time. Those people get one of my two (best) therapists. They’re my Kobe Bryant and my Pau Gasol,” he said.
However, with health maintenance organization insurers unwilling to pay for such expensive treatment, the program foundered and Taite had to shut it down. Now, he is trying a new tactic: raising the facility’s profile.
The company hired a public relations executive and, in December, launched its first TV ads. Taite also will release a free e-book extolling his treatment methods in coming weeks. The idea is to compete with the book “The Alcoholism and Addiction Cure,” by Passages co-founder Chris Prentiss, which is a top seller among addiction treatment titles on Amazon.com.
It’s possible, Taite said, if the publicity drums up enough demand, he would once again open up the third house on the property, with the beds commanding “what the marketplace will bear.”
Further downmarket?
Another option would be going even further down market by opening a lower-cost facility closer to an urban hub.
That would somewhat mirror the approach of Passages, which has a lower-cost treatment facility in Port Hueneme that charges between $16,500 and $32,500 per month. That center has been so successful that it is expanding from 40 to 90 beds.
Whatever happens, Taite has come a long way in a short period.
Originally a legal administrator, he got into the recovery business after his struggles with a crack cocaine addiction. He sought help in Alcoholics Anonymous, he said, relapsing throughout the years even while running a successful medical bill collection business.
He finally found lasting sobriety in 2003, retired to Malibu and bought the first of three houses he now owns on Cliffside’s plot of land for $2.7 million using business proceeds.
He shared the house for a year with a friend who also was recently sober, eventually deciding to transform it in to a sober-living center for recovering addicts. Under a federal law that overrides local zoning restrictions and allows programs with six or fewer beds in residential neighborhoods, Taite gained a license from the California Department of Alcohol and Drug Programs in 2005.
The next year he expanded, buying an adjacent house and subsequently bought the third home as well. Taite said he spent $7.2 million on the three properties, with an additional $3 million in upgrades, such as stripping interiors and filling them with Ralph Lauren couches and other plush furnishings.
“I knew I had to replace the euphoria of getting loaded with comfort and convenience,” he said.
