Staff Reporter

Another hotel is opening on Santa Monica's oceanfront skyline and it will be last one built for a while.

The $50 million, cream-and-maroon-trimmed Le Merigot Santa Monica Beach Hotel will debut next month on Ocean Boulevard, nearly a decade after city voters passed a moratorium on beachfront hotel construction.

"We're confident that the market can handle our rooms, barring any unforeseen economic turndowns," said Bruce Rathje, vice president of sales and marketing at Cincinnati-based Columbia Sussex.

Maguire Partners purchased the property in 1987 and received hotel zoning approval from the city in June 1989, just before city voters approved a ballot measure banning hotel development along the oceanfront.

The market was hit hard by the recession, and after initial construction, fire destroyed the property in 1996 and it was sold to Columbia Sussex.

Le Merigot marks the firm's first foray into California. Executives believe its distinction as the last hotel approved before the beachfront ban will heighten its appeal.

"It definitely has helped us and piqued people's interest, especially since not a whole lot of hotels are being built in general along the coast in California," said Renee Spingola, director of sales and marketing. "We're among the last of the breed, and that creates a demand that we hope to fill."

Rates at the nine-story, 175-room hotel will range from $299 to $545. The U-shaped hotel surrounds a tiered courtyard featuring a pool, fountains, spa and outdoor gym equipped with television sets and stationary bikes.

In addition to Shutters on the Beach and Loews Santa Monica Beach Hotel, Le Merigot faces competition from Casa Del Mar, a seven-story, 129-room hotel that will open this September in a brick and sandstone building that once housed the Pritikin Longevity Center. Beverly Hills-based Edward Thomas Hospitality Corp., which also owns the 198-room Shutters, is developing the $60 million project and plans to charge $335 to $775 a night for rooms.

"One of the key points of differentiation (with Le Merigot) is that we have a history to our building that compares with nothing else, and people are drawn to that nostalgia," said Susan Kelly, director of marketing. "And the biggest difference is that we have unobstructed ocean views."

Kelly was referring to the construction of an eight-story apartment house directly west of Le Merigot at the former site of the Sea Castle, a complex that was devastated during the Northridge earthquake and is now undergoing a renovation.

Rathje said Le Merigot was designed with the Sea Castle project in mind. "Our rooms are at an angle that face the ocean, and nearly 80 percent have views," he said.

The new wave of development is having ripple effects on older properties in Santa Monica, which has 30 hotels and a total of 2,700 rooms. Doubletree Guest Suites Santa Monica has completed a $5.5 million renovation, and San Clemente-based Sunstone Hotels, which bought the nearby Pacific Shore Hotel for $22 million last September, will invest about $10 million as part of a franchising agreement with the Marriott chain.

"When you're in areas that are tough to build, you need to reposition your hotel," said Alan X. Reay, president of Costa Mesa-based Atlas Hospitality Group, a hotel consulting firm. "It puts the pressure on to stay ahead in the game."

That confidence comes despite Los Angeles County's flat occupancy rates, which have hovered at about 74 percent through the first six months of this year. The city of Santa Monica boasts a somewhat stronger rate of 83 percent during that same period, up 1 percent over the first six months of 1998, according to PKF Consulting, which tracks hotel occupancy in the county.

Visitors to Santa Monica now pay an average daily room rate of $175, a 6 percent jump over last year. (The countywide average is $115.)

Analysts believe that the Santa Monica market can accommodate the addition of Le Merigot and Casa Del Mar due to increasing demand for rooms. "This is a strong, buoyant market both for commercial guests and tourists," said Bruce Baltin, PKF's senior vice president.

Business travel to the city has increased 13 percent since 1994 and represented 32.2 percent of the city's 2.3 million visitors in 1998, according to the Santa Monica Convention and Visitors Bureau.

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