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For Radius Group’s Steve Brown, La Entrada Sale a ‘Labor of Love and Effort’

Documents and information were lost when the property changed hands, but now that the transaction is complete, he has high hopes for the property

For Steve Brown, principal and a founding partner of Radius Group Commercial Real Estate, the recent sale of the Hotel Californian, part of the larger La Entrada project, has been the most complex transaction during his 35-year career in commercial real estate, he told Noozhawk on Thursday.

M.F. Santa Barbara LLC sold the property to 35 State Street Hotel Partners, a Los Angeles-based real estate investment and development company led by Michael Rosenfeld, managing partner of Next Century Associates, owners of the famed Century Plaza Hotel in Los Angeles. M.F. Santa Barbara LLC is a parent company of Mountain Funding Santa Barbara.

The city of Santa Barbara approved developer Bill Levy’s plans for 62 timeshare condominiums in 2001, which he planned to finance with a $25 million land loan from Mountain Funding Santa Barbara LLC. The project was financially unsustainable for Levy, and he declared bankruptcy in 2006. Mountain Funding acquired the property through bankruptcy court in March 2007.

The Hotel Californian and two other plots of land on the corners of Mason and State streets are part of the La Entrada project, a 123-key hotel and timeshare plan. The La Entrada project is fully entitled for a 114-room luxury hotel, nine fractional vacation units, and 21,557 square feet of retail space with open plazas, paseos and gardens designed in the Spanish Colonial Revival style of Santa Barbara.

Brown said that not all of the information about the project and the city’s plans were passed on to M.F. Santa Barbara LLC, so Brown and Radius Group broker Austin Herlihy were assigned to market and sell the property. Complications included plenty of missing information, such as some plans and entitlement documents. Documents and information were lost when the property switched hands.

“When a lender forecloses on a property, they don’t usually get information from a previous owner,” Brown said.

Brown and his team were asked by Mountain Funding to target the marketing campaign to buyers who were qualified and serious.

“They wanted a very focused approach to buyers,” he said. “We primarily looked for people who had experience dealing with cities, architects and contractors. Because lenders are pretty much out of the market, it had to be someone who could finance themselves in acquisition of the project.”

The end result was the sale to 35 State Street Hotel Partners, and Brown said the development of the property will fill the missing void of an “anchor” on State Street near the beach.

“Historically, no one crosses the freeway (on State Street) unless they have guests in town, and they want to take them toward the pier,” Brown said. “I think that someone is going to develop this and it will be first class. It will connect the beachfront to the downtown area. I think it will benefit all of the retailers.”

Brown said he is proud of how he and his team were able to put together a list of buyers, a marketing package and sell the property during a short period of time — four months.

“I’ve been in this business for 35 years,” he said. “This was a labor of love and effort.”

Noozhawk business writer Taylor Orr can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @NoozhawkBiz, @noozhawk or @NoozhawkNews. Become a fan of Noozhawk on Facebook.

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