PAGE    1                                              

                         San Antonio Business Journal              

                                  June 5, 1992

SECTION: Vol 6; No 20; Sec 1; pg 5

LENGTH: 917 words

HEADLINE: Vista Verde Hotel on Verge of Completion, New Ownership

BYLINE: Paula

DATELINE: San Antonio; TX; US

 BODY:    The beleaguered $ 19 million, 250-room Vista Verde hotel on the 
near West Side is close to completion and new ownership, according to 
hotel officials.

   Current owner Southern California Savings (SoCal) of Beverly Hills, 
Calif., is evaluating five solid contenders for the hotel with an eye 
toward "getting a good offer" in about a month, according to Arthur J. 
Cleary, vice president and director of public affairs and acquisitions at 
SoCal. Also at that time, the property's yearlong, $ 6 million build-out 
should be finished, and the hotel should be completely furnished by July.


   Cleary declines to name the viers for the Vista Verde hotel, but he 
allows that SoCal might act as the new owner's lender.

   SoCal became the hotel's owner in 1989, buying it through foreclosure 
for $ 4.8 million from troubled developer H. Frank Dominguez of 
California, who had borrowed $ 10.4 million from the thrift in 1984 to 
build the hotel. Subsequently, Dominguez and his local partners,  David 
Saks  and Doyle Spruill, descended deeper into insolvency. Dominguez 
filed Chapter 11 bankruptcy reorganization, while Saks and Spruill, 
having sold their interest in the hotel to Dominguez, entered the 
pawnshop business and recently were convicted of  bank  fraud.

   Although Cleary pitches the Vista Verde hotel hard as an upscale 
property, hotel industry insiders see it more as a nice tourist hotel 
because of its proximity to Interstate 10. Located at 502 W. Durango St., 
the six-story hotel sits just west of the freeway, which historically has 
been the boundary of the downtown hotel market. The consensus of hotel 
sources is that the property is too far from the Henry B. Gonzalez 
Convention Center and the River Walk to be considered a top-drawer hotel.


   "That location is not upscale," says Siegfried Richter, general 
manager of the Hilton Palacio Del Rio on the River Walk. "If they market 
the hotel as upscale, they'll miss their market, which is middle of the 
road. If they don't miss their market--if they don't aim too high 
--they'll be all right."

   Richter adds that the Vista Verde hotel's market is one that pays $ 70 
to $ 90 per room night, not the $ 100 that river hotels command.


                                                                       
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   Indeed, a property like the Vista Verde hotel generally attracts 
small, regional companies that operate limited-service hotels, says hotel 
analyst John M. Keeling of Hospitality Counselors Inc. in Houston. And 
nearby hotels fitting most of that bill--a Motel 6, two Rodeway Inns and 
a La Quinta Motor Inn--are doing well, adds local hotel analyst Bruce 
Walker of Source Strategies Inc. Walker was hired by SoCal in 1990 to 
project the Vista Verde hotel's performance as a Ramada Inn, and 
currently he is working with one of the property's potential buyers, 
which he declines to name.

   The new owner also can succeed only if it doesn't pay too much for the 
hotel, according to hotel sources. Analyst Walker expects the property to 
sell for $ 30,000 to $ 35,000 per room, and Keeling thinks an operator 
wouldn't want to pay more than that. The Hilton's Richter says that the 
buyer that pays more than $ 50,000 a room "will struggle."

   SoCal has sunk $ 6 million into the build-out and furnishing of the 
hotel to create a high-quality, marketable property--one worthy of the 
original vision of former Mayor Henry Cisneros and former City Councilman 
Walter Martinez, who spearheaded the hotel's development, according to 
Cleary. "We want to create a new experience for this area (the West 
Side)," he adds. "We want to erase the stigma of being on the wrong side 
of the freeway."

   Moreover, Cleary credits the city --especially City Manager Alex 
Briseno and building inspections department head Gene Camargo--with 
backing the hotel by expediting a complicated permitting process. The 
city even helped convince the state to authorize an important curb cut, 
which gives motorists coming off I-10 headed east access to the hotel.

   For the last year, local Reitzer Cruz Architects and Eaton Contracting 
Co. Inc.'s 125-man crew have been transforming the severely vandalized 
hotel into a modernized Moorish-Spanish Colonial palace, according to 
Cleary. (The property suffered $ 2 million in damage at the hands of 
thieves, who ripped out expensive copper tubing and other fixtures.) 
Denver-based Urban Design Group, which also designed the lavish 
1,000-room Marriott Riverwalk hotel, is responsible for the property's 
bold gold, white, red and blue exterior colors, among other things.

   A lot of attention and funds have gone into the lobby area, which is 
highlighted by natural white oak, green marble, faux limestone accents, 
Persian carpet and chairs covered in green ultrasuede that costs $ 60 a 
yard. Other first-floor amenities include a 300-person ballroom, six 
meeting rooms, a gym, restaurant/bar and palm tree-dotted atrium with 
swimming pool and sauna.

   Extra expense also has been incurred by complying with Americans with 
Disabilities Act requirements and landscaping with indigenous foliage 
like oak trees, crepe myrtle and mountain laurel.

   Part of Vista Verde South, a project launched in the mid-1980s as a 
catalyst for the revitalization of the underdeveloped West Side, the 
hotel's success also depends on the fate of its neighbors, say hotel 
sources. Vista Verde South also is home to the Vista Verde Plaza office 
building, which currently is owned by Bexar County and undergoing a $ 
1.25 million interior build-out, and the pink-stucco Fiesta Plaza retail 
center, which is slated for sealed-bid sale June 11.



                                                                       
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GRAPHIC: Photo

SUBJECT: Hotels & motels; Construction; Real estate sales; Southwest

GEOGRAPHIC: Southwest Region; San Antonio; TX; US

COMPANY: Southern California Savings & Loan; SIC: 6120 Vista Verde; SIC: 
7011

CO:  SOUTHERN CALIFORNIA SAVINGS & LOAN; 

LOAD-DATE-MDC: July 7, 1992