Santa Monica hotel still beached but no outside investors get hurt.

No individual investors have lost any equity or money because of the uncertain future of the Park Hyatt on Santa Monica Beach hotel, according to a Century City attorney representing the project's developer. The hotel is now more than 18 months behind schedule and as much as $70 million over projected development costs.

Joseph Eisenberg, a bankruptcy attorney, said the only investors in the project are members of the Stein family of Encino. Sam Stein, who is in his mid-60s, claims to have arranged for more than $1 billion in real estate transactions in the United States.

Stein, with his wife Claire, heads several real estate companies, including a one called RE International in Los Angeles.

Eisenberg said no members of the public have been affected by the bankruptcy of Santa Monica Beach Hotel Ltd., a limited partnership formed by Stein to develop the hotel. He said the only investors in the partnership are members of the Stein family.

Eisenberg and another attorney involved in the mounting litigation concerning the hotel both said there are no immediate plans to resume construction on the hotel, which was 75 percent completed before a string of lawsuits halted work on the project earlier this year.

Neither could say for sure whether the hotel, with a total development cost of about $125 million, would ever be completed or what is going to happen to the property that is on prime beachfront land at 1 Pico Blvd. in Santa Monica.

Stein did not return telephone calls for comment.

"All I can say is that right now the entire project is on hold," said Thomas Palffy, a Stein attorney representing the limited partnership in an arbitration matter with a former contractor on the project.

Earlier this fall the partnership and Stein, personally, filed for Chapter 11 bankruptcy protection after Tokai Bank of Japan, the project's primary lender, issued a notice of foreclosure. The bankruptcy filings stalled any action on the foreclosure.

The notice was filed after work on the project was stopped because of still unresolved litigation that reaches into the tens of millions of dollars in damages and involves charges of fraud and breach of contract.

The litigation involves Stein, the former project director, the project's general contractor and the San Francisco architectural firm that designed the hotel, a 198-unit property that was planned to have room rates from $275 to $395 a night.

Initial development cost of the property was $70 million, but that figure has now gone up to between $120 million and $130 million, Stein said back in May.

The main suit in the controversy -- and the one that has largely caused the delays in the project -- involves a dispute between Stein and the former lead contractor on the project, Gosnell Building Corp., a Phoenix-based company.

The suit claims Gosnell was contracted to complete the project by June 1990 but because the company failed to do the work specified by Stein, the hotel has been indefinitely delayed and construction costs have escalated from $24 million to $47 million.

Gosnell has denied any wrongdoing and blamed the project's architects for any problems on the property. Gosnell has said the architect, Frizzell Hill, Moorehouse Architects Inc. in San Francisco, was late in completing plans for the property.

The firm has denied that the drawings were late.

Stein is seeking $47 million in damages from Gosnell for, among other claims, fraud and breach of contract, and Gosnell is seeking $16 million from Stein. The dispute is now in arbitration in Los Angeles.

The Stein-Gosnell suit was preceded by action started by Stein last year against a Los Angeles man whom he hired to be project director. Stein claimed Mark Solit failed to do his job and misrepresented his qualifications. Solit has countersued, claiming breach of contract and fraud.