Pair of firms buys Valley River Inn, hotel group.

Byline: EDWARD RUSSO The Register-Guard

Eugene's Valley River Inn, one of Lane County's plushest hotels and convention centers, has changed hands for the second time in its 29-year history.

Wyndham International Inc. of Dallas, Texas, last Thursday sold the Valley River Inn and 10 other hotels across the country to Sunstone Hotel Investors L.L.C. of San Clemente, Calif., and Westbrook Hotel Partners IV L.L.C. of Boston.

A separate purchase price for the full-service, 257-room hotel was not disclosed. The business is on seven acres next to the Willamette River near Valley River Center.

The Woodard family of Cottage Grove, which built the hotel in 1973, sold it six years ago for $18.75 million to the firm that eventually became Wyndham.

Valley River Inn General Manager Chris Otto on Tuesday said the new owners plan to spend more than $1 million next year to renovate the hotel.

"We're very excited because of the investment that will be made," Otto said. "They are committed to the property."

Spokane-based WestCoast Hotels will remain the hotel's management firm, Otto said. The hotel has 220 employees.

Guest room rates range from $99 to $149 per night.

The hotel, with 15,000-square feet of meeting space, is the second largest convention center in Lane County, trailing the 30,000 square feet at the Eugene Hilton and Convention Center.

Hotels such as the Valley River Inn help attract visitors to Lane County. Each visitor spends an average of $166 a day on lodging, meals and shopping, according to the Convention and Visitors Association of Lane County Oregon.

CVALCO President Kari Westlund said she was glad to hear that Sunstone and Westbrook plan to upgrade the hotel. Aside from that, Westlund said she doesn't expect the operation of the hotel to change much under the new owners.

"I really don't see a significant shift one way or another," she said. "And that is good news because (the hotel) has been such an important contributor to our community."

The hotel is profitable, Otto said, though the recession has caused business to slip the past couple of years.

The hotel's average occupancy rate so far this year is hovering close to 60 percent, down from 62 percent last year, he said.

Details of the planned renovations will be finalized in the next several weeks, Otto said.

Hotel guests, meeting attendees and patrons of the Sweetwaters restaurant should begin to notice the changes as they take place next year, he said.

The Valley River Inn's sale was part of a $345 million deal involving luxury hotels in nine states.

Wyndham International, which reported a loss of $78 million this year through September, sold the 11 hotels in order to reduce debt and to focus on its own Wyndham Hotels, company executives said. Wyndham plans to sell two other hotels to Sunstone and Westbrook next week for $103 million.

With the Valley River Inn acquisition, Sunstone and Westbrook will own four hotels in Oregon. The others are the Marriott City Center in Portland; Hampton Inn, Clackamas; and the Hilton Garden Inn, Lake Oswego.

After its deal with Wyndham closes next week, Sunstone and Westbrook will own 74 upscale and mid-scale hotels throughout the country.

Sunstone, a private company, began in 1984 as real estate investment trust, managing a portfolio of hotel properties to earn profits for shareholders. In 1995, the firm became publicly traded and grew rapidly. Within four years, it had 56 hotels, but competition and renovation disruptions hurt profits. In 1999, Chief Executive Robert Alter, other Sunstone executives and Westbrook bought out common stockholders for $800 million in cash and assumed debt.

In an article published last year, the Boston Business Journal reported that Westbrook was an investment company that with about $6.39 billion in real estate investments under management worldwide. Its investor group consisted primarily of public and private pension funds, endowments and foundations.