Unsuccessful bidders seek to halt Biltmore sale: duo says they still have purchase deposit in escrow.

DOWNTOWN L.A. - Hilton Hotels Corp., Marriott International Corp. and Fairmont Hotel Group were three name-brand companies interested in acquiring the recently sold Biltmore Hotel in downtown Los Angeles.

But it is two little-known individual investors from Asia who are presently trying to overturn the just concluded sale of the hotel to Regal Hotels International Holdings Ltd. by TAT Los Angeles Ltd.

Early this year the two, Jason Fan and Ronnie Lam, put a $2 million deposit on the property, precluding the hotel's owner from negotiating with other possible buyers for at least two months. The Fan/Lam proposed deal, which was through a company called Fan & Partners in Los Angeles, ended up in Los Angeles County Superior Court in March where Fan and Lam unsuccessfully tried to force the Biltmore owners to continue negotiations.

Negotiations had been cut off when Fan & Partners and TAT failed to reach an agreement under a self-imposed two months deadline. As a result of the failed negotiations, Fan & Partners lost $500,000 of their deposit.

Last week, Ronnie Lam, who is from Hong Kong, said he and Fan, who is from Taiwan, are contesting the recent sale. "The $500,000 is still in escrow. We're trying to get that back and we're trying to get the hotel back. We think we have a pretty good case," he said.

Fan was traveling last week and unavailable for comment and Lain declined to discuss details, referring further questions to his attorney, Jeffrey Strauss.

Still want hotel

Strauss, who has a practice in Monterey Park, said, "We had a deal. They (Biltmore owners TAT Los Angeles Ltd.) went behind our backs and consummated a deal with Regal. We're trying to get the hotel back." He said Fan and Lain have filed lawsuits to get the $500,000 and the hotel.

Strauss said Fan and Lam had lined up financing beyond the $2 million deposit and were prepared to buy the hotel.

Officials at the Biltmore were unavailable last week, and a representative at the Denver, Colo., office of Regal did not return a phone call for comment.

Sources said TAT and Regal do not take the legal action by Fan and Lam seriously and expect that any litigation will be dismissed.

Local sources said they were familiar with small deals Fan has completed. One source said Fan owns a Holiday Inn in the San Francisco area. Sources said they did not know where Fan and Lam got the money for their deals.

After talks between Fan & Partners and TAT ended in late March, the owner of the hotel began negotiations with Hong Kong-based Regal Hotels, which moved ahead quickly and signed a deal on June 3.

It could not be learned exactly how much the stately hotel and an adjoining 24-story office building sold for, but estimates by sources ranged from $60 million to $68 million. In 1990, TAT, backed by Japanese investors, bought the hotel and office building for $219 million.

Hilton figures in

Sources, none of whom wanted to be identified because they were involved in the negotiations, said Beverly Hills-based Hilton was eager to somehow connect its name to the 680-room Biltmore. Fan and Lam, who are both described by sources as around 40 years old, tried to convince Hilton to team up with them on the deal.

It could not be determined conclusively whether Hilton had actually agreed to become a partner in the Fan/Lam proposal.

For its part, Hilton wanted to either manage the hotel for a new owner, or buy the property, said sources. However, no deal was reached because of the Fan/Lam situation. Officials at Hilton have declined to discuss the company's interest in the Biltmore but they have acknowledged Hilton's desire to have a presence in downtown Los Angeles.

Sources said a deal with Hilton could also not be reached because the owner of the Biltmore was trying to conclude a deal quickly and, up until Regal came along, wanted to retain management of the hotel. The Biltmore, until the sale to Regal, was owned and managed by TAT Los Angeles Ltd., and Biltmore Hotel Co., respectively, a limited partnership and company formed by investors from Japan.

Under terms of the final deal, Regal bought the Biltmore and office building for cash. Regal will also manage the hotel but most of the property's employees will remain in place, including longtime General Manager Randy Villareal.

Also as part of the deal, the hotel, as of June 3, was renamed the Regal Biltmore.

On the block six months

Sources said other interested parties were Marriott, another major hotel company, and Fairmont Hotel Group, operator of the famous Fairmont Hotel in San Francisco. Sources said the Biltmore had been actively for sale for about six to eight months, and one of the more unusual potential buyers was People's Liberation Army of China.

Last fall, the International Windsor Hotel Group tried to buy the hotel. International Windsor, based in El Segundo, is headed by Carlos Lopes and Eric Prevette, former managers of the Biltmore.

Sources also said that in the past year or two, Regal had tried to buy the hotel and that is one reason the recent deal was completed so fast.

Over the past several months, the potential sale price of the hotel and adjoining office building fluctuated greatly, said the sources. Offers started at about $49 million and the asking price was as high as $100 million, said the sources.

The Biltmore, a 70-year-old property, is a downtown Los Angeles landmark. Many high-profile events are held at the hotel.

Like all hotels in downtown Los Angeles, however, the room occupancy rate at the Biltmore has been depressed in recent years. Downtown hotel occupancy rates in recent years have been less than 50 percent.

The industry-accepted break-even point for a hotel is between 65 percent and 67 percent.