December 27, 2007

La Casa del Zorro, a four-diamond resort in Borrego Springs owned by The Copley Press Inc., is being sold to the developer of the nearby Montesoro golf subdivision for an undisclosed price.

The 63-unit resort has been owned by Copley, the parent company of The San Diego Union-Tribune, since 1960. The sale to GH Capital of Sherman Oaks is expected to be completed by year's end.

“All of us love La Casa and are reluctant for it to leave our corporate fold,” Copley Press Executive Vice President Harold W. Fuson Jr. said in a statement. “But the resort's future is best served by being part of an enterprise focused primarily on the hospitality business. The buyer is well-qualified to strengthen the resort and enhance its contribution to Borrego Springs.”

GH Capital could not be reached for comment. But La Jolla hotel management consultant Howard Hian said owning La Casa del Zorro could help the developer sell lots and homes in its Montesoro Golf and Social Club, which was long known as Rams Hill.

“I think it's part of their marketing (plan),” Hian said, likening it to a strategy once used at the Rancho Bernardo Inn. “They would actually fly people in. They would stay at the inn and (the developers) would try to sell them lots. My guess is this is the same thing, only the 21st century model – bigger, better and more expensive.”

GH Capital, a private real estate investment company, primarily owns apartments. It entered the hotel business about six years ago when it bought a 209-room Holiday Inn in Brentwood, renovating it into the boutique Hotel Angeleno.

In 2004, GH Capital purchased the twice-bankrupt Rams Hill project from a court-appointed receiver for $15 million. Since then, it has invested nearly $20 million remaking the golf course, updating the spa and renovating community buildings.

The developers tout Borrego as a less-crowded alternative to Palm Springs. Houses and lots are more expensive than those typically found in Borrego Springs, ranging from $375,000 to more than $1 million. Eventually, more than 800 homes are planned for Montesoro.

GH Capital says it sold 52 homes and lots in Montesoro during a daylong sale in July at La Costa Resort and Spa in Carlsbad.

Located on 42 acres, La Casa del Zorro has 44 poolside rooms and 19 private casitas, ranging in size from one to four bedrooms. It is one of 19 hotels in San Diego County to receive a four-diamond AAA rating for 2008.

Prices range from $295 to $1,660 a night during the peak winter/spring season.

The resort has been extensively upgraded over the years by Copley Press, which has been selling assets, including several newspapers, amid a downturn in the newspaper industry. Copley's remaining newspapers are the Union-Tribune, The Borrego Sun, Today's Local News and Enlace.

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Mike Freeman: (760) 476-8209; mike.freeman@uniontrib.com