Before the hotel opened in 2001, Paul Makarechian, the 27-year-old scion overseeing non-residential projects for the family, took The Times on a tour, pointing out sweeping tapestries, elaborately stitched duvet covers matching fabric-draped headboards -- even motion sensors so employees would know without knocking if guests were present.
"If you're going to build a five-star luxury resort hotel that will outdo every other deluxe hotel on the planet, you don't scrimp on sheets," he said. "You don't scrimp on anything."
But in these times, perhaps a bit more austerity is in order.
Although the St. Regis is not directly on the waterfront, the Pacific Ocean is visible from its six restaurants and it boasts a five-star Mobil Travel Guide rating, compared with four stars for the nearby Ritz-Carlton and Montage resorts.
Guests can take a shuttle across the golf course to a private ocean-front club at Monarch Beach, the northernmost stretch of Dana Point, where they can sip cocktails after taking surfing lessons.
The St. Regis became something of an emblem of corporate excess and greed last October, as the global financial system was threatening to melt down.
The taint arrived by association with AIG, the giant New York insurer that, because of massive wrong-way bets on the mortgage markets, became the largest recipient of bailout money from the federal government.
Just weeks after receiving its first $85 billion in federal funds, AIG shelled out more than $440,000 at the St. Regis for rooms, wining and dining, spa treatments and rounds of golf to reward 100 top salespeople.
The Presidential Suite, which normally goes for $3,200, was booked for five nights, The Times reported.
The event was widely vilified and lampooned, and bookings at the St. Regis dropped by 20% in the months following it, St. Regis marketing director Michael Mustafa told Hotels Magazine.
By Mustafa's estimate, about a third of the drop-off was attributable to what the magazine termed the "AIG curse."
"My phone started ringing off the hook," Mustafa recalled. "That was the worst week of my life."
At the St. Regis, managers couldn't be reached for comment Tuesday. But it appeared the debt problem would not directly affect resort visitors. The Citigroup real estate arm is pursuing what is known as a non-judicial foreclosure, meaning no sheriff's deputies nailing notices to the hotel walls or sales on the courthouse steps.
Instead, the auction is to be held at First American Title Co. in Santa Ana.
Bidders would be vying for the hotel and golf course, but not the surrounding residential areas, including a yet-to-be-developed parcel on the hotel's south flank, which is owned separately by the Makarechian-Farralon partnership.
Citigroup itself is allowed to bid, according to the "terms of public sale" document. The Makarechians and partners also are likely to enter bids.
The package to be sold includes the obligation to pay the $230 million in senior mortgages on the property.
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scott.reckard@latimes.com
roger.vincent@latimes.com
