Money down the drain? Hefty bill seen to update Beverly Hilton, especially baths.

Even by Beverly Hills standards, the Beverly Hilton Hotel is in need of a major facelift.

If Packard Bell co-founder Beny Alagem closes on his $130 million purchase of the hotel by year's end, as planned, he will have his hands full modernizing a property that by some accounts could cost him at least another $50 million to renovate.

Alagem's Oasis West LLC struck a deal earlier this month with entertainment mogul Merv Griffin, the hotel's owner, and announced that it would retain the Hilton flag and overhaul the operation.

Though Alagem and Oasis West President Ted Kahan declined comment, Alagem said in a statement that he was "look(ing) forward to elevating the Beverly Hilton's prominence as a world-class hotel by delivering unparalleled service in a luxurious environment."

It's a big task, according to those in the industry.

"It's easily a $50 million renovation," said Richard Alter, president of Financial Capital Investment Co., an L.A.-based company that has an investment in the Omni Los Angeles hotel. "The place is falling apart and needs a lot of work."

Ron Silva, who recently left the hospitality division of Lowe Enterprises, which had considered bidding on the hotel, said the property suffered recently under Griffin's ownership.

"I think Merv lost interest in the hotel, and once an owner loses interest, the property can become dated and stale," said Silva, now president and chief executive of San Francisco-based Fillmore Capital Partners. "For any good hotel, regardless of when it was built, that's going to be problematic."

But Kevin Deverich, who until last month was president of Griffin's hotel company and now heads the hotel acquisition group of Irvine-based Crown Realty & Development, said Griffin cared deeply for the Beverly Hilton.

"Merv did a very good job initially with redevelopment when he acquired the hotel and he always had a great deal of pride in owning it," said Deverich, who oversaw the asset. "But the property, as a virtue of its age, needs to be brought up to date."

First steps

Those familiar with the Beverly Hilton cited three areas in need of immediate attention: the exterior, common areas and guest bathrooms.

Updating the bathrooms alone could be the most important improvement for the 48-year-old hotel--and with a price tag that could reach $20 million, the most expensive.

By current luxury standards, the Beverly Hilton is saddled with small bathrooms appointed with the modest porcelain basics: sink, bathtub and toilet.

Bringing the facilities up to the competitive standard would require installing separate shower stalls, new tile floors and marble or granite countertops, according to Silva.

"These days everybody wants to put more horsepower into their cars," he said. "Same thing goes when it comes to hotel bathrooms. The Beverly Hilton was built at a time when the three-fixture bathroom was acceptable, but by today's standards that doesn't carry enough horsepower."

That renovation alone could cost $20,000 for each of the Beverly Hilton's 581 rooms.

"If you are going to command a higher rate or stay competitive in that geographic area, you would have to do that much when you redo the bathrooms," said Jordan L. Richman, senior vice president at Grub & Ellis Co.'s Los Angeles hospitality group.

Adding whirlpool baths, an extra sink, larger mirrors with specialized vanity lighting and bidets could balloon costs to $35,000 per room.

"When you start expanding or escalating those ingredients, that's where the numbers really start to escalate," said Deverich. "The best way to look at it is that you have to do as many timeless changes as possible that will give you the longest staying power."

Updating the hotel's exterior and common areas, which some in the industry said would be necessary to keep its four-star rating and compete with high-end Beverly Hills neighbors the Peninsula, the Regent Beverly Wilshire and Beverly Hills Hotel, could add another $20 million or $30 million to the tab. The hotel, and its ballroom in particular, has gained international prominence as the home of the Golden Globe Awards and other entertainment events.

Help from Hilton

Alagem could get some support from Hilton Hotel Corp. Hilton, based in Beverly Hills, and Prudential Insurance Co. of America sold the property and its management contract to Griffin in 1987 for $100.2 million.

As the hotel has begun to show its age, it has become a thorn in the side of Hilton executives, according to several hotel brokers and financiers. But without a stake in the property or its management contract, the company had little say about how Griffin ran things or about improvements.

Now that Alagem has contracted it to manage the hotel, Hilton is likely to flex more influence, Deverich said.

"I think (Alagem) has a lot of leverage because Hilton has always wanted to fix up that hotel," said Silva. "It's been a nuisance and an irritation to them, and since it's in their backyard, I believe it's fair to say the amplification is there."

Marc A. Grossman, Hilton's senior vice president of corporate communications, declined comment.

In the end, the renovations will have to bring in enough business to justify the expense, something Silva said is likely--especially if Alagem plays up the hotel's celebrity past and installs a poolside restaurant with a bar.

"You don't co-found Packard Bell and sell it for a bazillion dollars if you don't have a solid head on your shoulders," Silva said of Alagem. "This guy knows what he's doing and he's assembling a good team so I think he'll do just fine."