Inside the Camino deal: What it tookMonday, July 18th, 2016
Source : El Paso Inc.
$70M renovation to start by January
Stuart Meyers, a real estate investor from Miami who has made a monster bet on El Paso, walked into a luxury hotel in Mexico City with his son Josh Meyers and executive Alan Losada.
On that summer day a year ago, the three businessmen were not headed for the pool. They had a pitch for the hotel’s owner, Grupo Empresarial Ángeles, headquartered in Mexico City.
Meyers wanted to buy one of the company’s 28 hotels: the Camino Real in El Paso.
The 100-year-old landmark is one of the most historic buildings in the Southwest and one of the largest and most troubled hotels in El Paso.
Other El Paso investors had made the same trek only to have the deal eventually fall through. El Paso billionaire Paul Foster has said he tried. Businessman Leo “Gus” Haddad assembled investors, had architectural drawings readied and negotiated city incentives before the deal fell apart.
If Meyers is successful, the investment would completely renovate the building, restoring the 17-story, 357-room hotel to its original grandeur and turning it into the full-service convention hotel the city has wanted for years.
Shabby conditions in the hotel had prompted convention and tourism officials in El Paso to tell Grupo Empresarial Ángeles it could no longer recommend the hotel to visitors. The hotel is located in the heart of Downtown, across the street from the convention center.
“At the end of the day, you could have played hardball and said, ‘No, this is the line that I am not willing to cross.’ And then nothing happens,” Josh Meyers said in an interview with El Paso Inc. last week. “For us, we saw the potential and we saw the opportunity and said, ‘Let’s stretch ourselves a little bit more.’ ”
Meyers is vice president of real estate development for the Meyers Group, a real estate development company founded by his father in 2015. The Meyers Group has also announced plans to build a 22-story hotel and apartment tower on a vacant lot on the Westside.
Alan Losada, the company’s chief operating officer, led the negotiations with Grupo Empresarial Ángeles since he speaks Spanish.
“It was persistence, testing ideas and different ways of structuring the deal until we finally found a medium,” Losada said.
A year later, they have all but sealed the deal and made public last week their intention to renovate the hotel – a $70-million investment – for an undisclosed price. Their partner is El Paso businessman Richard Aguilar, best known as the developer behind the Montecillo development on the Westside, through an investment entity he’s named Two Sabes. Aguilar declined to comment for this story.
Hunt for investment
Stuart Meyers and his son Josh, who have family connections in El Paso, opened an office here last year. Meyers had sold his interest in Cornerstone Group, a successful real estate development company he co-founded in Florida, and was looking for investments.
In El Paso, he was introduced to Aguilar. Meyers had capital to invest; Aguilar knew the local market.
The pair’s first proposal was to build a multi-story building on the surface parking lot in front of City Hall. The city issued a request for proposal for a building that would combine a parking garage with residences or hotel rooms and ground floor retail, and the Meyers Group is one of five companies that have responded. The city is reviewing the proposals.
“When we moved to town, he became a really good friend,” Josh Meyers said of Aguilar.
Meyers added: “It was really important for us to have a local partner who understands the local market and the dynamics of doing business here.”
It was natural, Meyers said, to ask Aguilar if he would like to be a partner in the hotel deal.
“We heard that the Mexican group was interested in selling and there were some very significant people in town who had tried to purchase this property before but were unsuccessful,” he said.
The negotiations weren’t easy.
“There were a couple of times that we felt it just wasn’t going to work out, and we would have walked out,” Josh Meyers said, declining to be more specific.
But they were confident in the investment and were willing to give some, Meyers said.
“There is so much history associated with this hotel that we just knew if we were to develop it, we would have the community support,” he said.
On Tuesday, El Paso City Council approved a term sheet that allowd the city to put together a tax incentives package. The Meyers Group is also seeking incentives from the county and state.
Altogether, they could be worth as much as $34 million, according to executives.
Construction is expected to start by January and take two years, and the hotel will remain open during that time. When finished, it will be a 4-1/2 star hotel, according to Josh Meyers, whose grandmother was married in the hotel.
“This is a significant project – a once in a lifetime opportunity,” he said, adding that it would be “one of the best hotels in Texas.”
Executives are in talks with a couple of hotel chains, but have not announced what brand the hotel will operate under, called a flag in the hotel industry.