James Hotel sold for $47.5 million - East Valley Tribune: Phoenix & The Valley Of The Sun

James Hotel sold for $47.5 million

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Posted: Wednesday, January 25, 2006 9:44 am | Updated: 4:41 pm, Fri Oct 7, 2011.

Just two years after Stephen Hanson and Danny Errico launched their hip, urban James Hotel in Scottsdale, the entrepreneurs have sold the 194-room inn. Morgans Hotel Group said it will pay $47.5 million for the property and rebrand it Mondrian, after Morgans’ own West Hollywood hotel on fabled

Sunset Boulevard.

The sale of the Scottsdale property is slated to be effective April 30.

New York-based Morgans moves into the Valley with an impressive portfolio of 11 boutique hotels in urban capitals.

The company owns three hotels in New York City, two in London, two in Miami Beach including the worldfamous Delano, Mondrian in the Los Angeles area and the celebrated Clift Hotel in San Francisco.

“We believe we can use our competitive advantages (financially) to improve the performance of this hotel property,” Morgans said in an SEC filing regarding the purchase. “Specifically, we intend to: Rebrand this hotel property as Mondrian Scottsdale and pursue synergies with our existing hotel, Mondrian Los Angeles; renovate this hotel property to create our distinctive lodging experience for a first quarter 2007 re-opening; and replace the existing operating structure with our experienced management team and extensive infrastructure.”

A Morgans spokesman could not say what the physical changes would entail or how much they would cost. He said until the deal closes, Morgans will not speak about any specific plans.

Morgans Hotel group claims to have revolutionized the hotel industry with the first modern “boutique concept” hotel, The Morgans opened in 1984 on Madison Avenue in New York. The company defines that concept as “characterized by personalized service and homeaway-from-home ambiance in a setting of timeless elegance.”

Morgans also claims to have perfected such cuttingedge concepts as the indooroutdoor lobby and the idea of “simple chic.”

The James owners said they will use the cash from the sale of their Scottsdale hotel to grow their brand. The second James, The James Chicago, is scheduled to open in March. A New York version is scheduled to debut in 2007, a Los Angeles James in 2008, and Miami, Fla., Boston and Las Vegas versions are still on the drawing board.

Despite the selection of Scottsdale for The James launch and a $25 million makeover of a languishing old hotel to serve as the prototype, Hanson said the local inn won’t serve as the model for the brand after all.

“The hotel has been an incredible success, but as the brand evolved, the Scottsdale property did not necessarily fit the portfolio we were developing in our new urban locations,” Hanson said in a statement announcing the sale.

Morgans is the second posh hotel company to announce a move into the destination in as many months.

San Francisco-based Kimpton Hotels & Restaurants, which owns and manages a collection of urban boutique hotels with chefdriven restaurants, bought Caleo Resort & Spa in Scottsdale in December.

To add to the hip, upscale image of downtown Scottsdale, the art deco-design Valley Ho renovated and reopened in December. And the W Scottsdale, the local version of lodging giant Starwood Hotel & Resort’s minimalist, trendy brand, is scheduled to open in 2007.

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