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Surf & Sand Hotel of Laguna Beach Seeks Chapter 11 Protection : Bankruptcy court: Owners cite problems with loan, a slow economy and bad weather. Operations here will not be affected, they say.

September 25, 1993|GREG JOHNSON | TIMES STAFF WRITER

LAGUNA BEACH — Owners of the beachfront Surf & Sand Hotel in Laguna Beach filed Friday for U.S. Bankruptcy Court protection.

Regency Properties, a San Diego-based limited partnership that also owns and operates the Temecula Creek Inn in Temecula and the Twin Oaks Golf Course in San Marcos, linked the filing, made in San Diego, to "not being able to reach an agreement with Bank of America" to restructure a loan package.

"We filed Chapter 11 to be sure that our company will have the necessary flexibility and liquidity to continue to provide the extremely high level and quality of service our guests have come to expect," said J. Wickliffe Peterson, president of J.W. Colachis Co., the partnership's San Diego-based general partner.

The Surf & Sand, a popular hotel on the beach, is one of Laguna Beach's most important hotels, known for restaurants like the award-winning Towers. Built in 1947, the hotel completed a $20-million renovation about two years ago.

"It's our No. 1 hotel, comparable to a four-star," said Kathleen Spalione, director of the Laguna Beach Hospitality Assn., a tourist industry trade group. "It provides major bed-tax revenues to the city."

Jan Jurcisin, office manager of the Laguna Beach Chamber of Commerce, said not only is the Surf & Sand one of the city's major businesses, it is "romantic, attractive and very, very popular." The bankruptcy action will have no effect on guests at the hotels, Peterson said, and no layoffs are planned.

The filing did not list the assets or liabilities of Regency Properties, Peterson said. The privately held company does not release revenue or profit figures.

Friday's filing does not affect the Rancho Bernardo Inn in San Diego County and some Arizona-based operations affiliated with Colachis.

Peterson said the filing was driven partly by the slow economy and bad weather in recent months that hurt tourism across Southern California. Regency Properties has also spent heavily to renovate its properties and recently opened the San Marcos golf course, Peterson said.

Peterson also linked the filing to a stalled hotel project in La Jolla on the grounds of the original Scripps Clinic. "All three properties are running profitably, but having a non-revenue generating property (in La Jolla) played a big part in it," he said.

Times correspondent Debora Vrana contributed to this report.

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