Good Times for Hotel Rehabs

In Malibu, Schmitz and Associates recently finished the restoration of the Surfrider Hotel – a project that transformed a 70-plus-year-old motel into a contemporary, high-end hospitality property, complete with rooftop deck and bar. Agoura Hills-based Schmitz and Associates is one of several Valley-region design and construction firms that specialize in hotel renovations. Others include InterServ in Woodland Hills; Tri-Tech Restoration and Construction in Burbank; and the Simi Valley branch of Orange-based American Technologies Inc. “The industry has grown exponentially from the late ’80s to the early ’90s,” InterServ Chief Executive Brian Brooks told the Business Journal. “It’s a completely different world. The hotel industry so much a part of the financial industry now. It’s not just hospitality; it’s a lot faster, more sophisticated, more professional and extreme.” Don Schmitz, principal of Schmitz and Associates, is accustomed to land-use negotiations, a skill that served him well for the Surfrider project at 23033 Pacific Coast Highway. He has served as chairman of Malibu’s chamber of commerce and trails committee and relied on his experience as a community liaison with the Malibu City Council to quell potential backlash against Surfrider for the addition of an alcoholic venue. Through a coordinated outreach effort, Schmitz was able to obtain the rare, coveted Type 70 license, which he achieved by devising a clever solution that allows only hotel guests to pay for their drinks via their keycards. “We do a lot of business up in Ventura and all the way down in Orange County,” said Schmitz. Hotel boom In Southern California, hotel renovation companies appear to have fodder to drive business for years to come. In the Valley region, popular local destinations as Universal Studios in Universal City and Valencia’s Magic Mountain has stimulated hotel construction even in the face of a labor shortage and exorbitant prices for materials. Data from Atlas Hospitality Group’s first-half summary of hotel construction in four counties — Los Angeles, Orange, Riverside and San Bernardino — saw 11 hotels open in 2018’s first half, with 472 more lodging facilities underway. “The fact that construction costs are up 20 to 25 percent over the last 12 months seems to have done little to dampen the pace of development,” said an Atlas statement. “All signs continue to be positive.” Locally, many hotel projects are underway, from Hilton Los Angeles Universal City’s additional tower to Camarillo’s ambitious twin-hotel Mian Plaza and Conference Center. And according to City of Santa Clarita Economic Development Manager Jason Crawford, the full buildout of a half-dozen approved projects will add 731 rooms to existing inventory, taking Santa Clarita Valley’s room count up to 2,624. In addition to new lodging facilities, hotel chains contractually obligate their franchisees to regularly update locations. “Most hotels, they take out loans for upgrades every three years,” explained Peak Corporate Network Vice President of Marketing Karen Schakarov, whose parent company owns Century 21 and InterServ. Project management In 1986, Paul Resnick and Udi Rosha founded InterServ, a nationwide company with operations in California, New York, Texas and Florida markets, in 1986. “They had some large hospitality clients, they had hundreds of hotels,” said Eli Tene, a principal at InterServ who also serves as managing director and principal at Peak Corporate Network, for which he oversees Century 21 offices in Woodland Hills, Granada Hills and Upland. Across three decades, InterServ has established itself as a leading brand within the contracting industry, having completed more than 500 projects to date. Nationwide, InterServ has worked for virtually every major hospitality brand, from Hyatt to Wyndham. Past local projects have included Burbank’s Hilton and Sheraton Universal City, while InterServ is currently working on the Fairfield Inn in Camarillo with completion scheduled for late 2018. Tene and Gil Priel, managing director and principal of the Peak entities, had been business partners for nearly three decades when they decided to partner with InterServ two years ago. Last May, they brought InterServ into the Peak fold at its Warner Center offices. Previously headquartered at 5900 Wilshire Blvd. in Los Angeles, the renovation outfit now operates out of 5900 Canoga Ave. “We haven’t lost any (employees in the move to the Valley),” Tene said. In fact, staff expanded by a dozen, and with a New York office of 15 and 60 at its Woodland Hills base, Tene wants to take a refreshed InterServ to new heights. He sees the move capitalizing on Woodland Hills as “a hub for business, lifestyle and innovation” and the promise of Warner Center Specific Plan 2035 growth in the coming decades. But Brooks, InterServ’s chief executive said it’s a mistake to assume that the hotel renovation business’s health always reflects the general hospitality industry. “When the hotel business is doing great, that doesn’t necessarily mean that the construction or renovation business is doing great,” he said. “When the industry is busy, the schedules are tighter.” Brooks has already seen a difference since Tene and Priel boarded InterServ: a 25 percent client base growth. Meanwhile, the firm, which within the hotel world has worked on Gordon Ramsay eateries in L.A. and New York, is positioning itself to delve deeper into restaurant renovation with the global expansion of Bangkok-based Pace Development’s Dean & DeLuca grocers. As the economy keeps humming, Schmitz at Schmitz and Associates said his firm handles 70 to 80 projects at a time, from hospitality to sizable residential projects, equestrian centers and movie prop facilities.Most renovations take 18 months to five years. “One of the things that you find is most important is aesthetics,” Schmitz said. “Folks don’t want to be driving by looking at a junkyard. You have to make sure it’s not water consumptive or that invasive exotic species will supplant native species.”