An unfinished hotel project in Coachella that recently went through a foreclosure proceeding is now up for sale.
Calmwater Capital, the original lender on the 250-key development, is asking $30 million for the hotel, located less than four miles from where world-famous festivals Coachella and Stagecoach are held, according to Maxim Hotel Brokerage, which is marketing the property for sale.
Maxim did not identify the lender, though public records show the Brentwood-based firm took control of the property in November. Calmwater did not respond to a request for comment.
By foreclosing on the development, Calmwater took the property out of the hands of Glenroy Coachella, a company run by developer Stuart Rubin.
Rubin started construction on the hotel in 2017, after securing city approvals, and was set to bring on InterContinental Hotels Group’s Hotel Indigo to brand the project. In 2018, the developer scored a $24.4 million loan from Calmwater, court records show.
Then Rubin’s firm ran into financial and legal troubles. In 2019, it defaulted on Calmwater’s loan. A few months later, Rubin’s business partner on the project, Gary Stiffelman, sued Rubin claiming “incompetence and fraud,” asking for $50 million in damages. And dozens of contractors had filed mechanic’s liens against the development.
In February of 2021, Rubin’s Glenroy Coachella entity filed for bankruptcy.
The firm said it owed between $10 million and $50 million, court records show. SMS Architects was Glenroy Coachella’s largest creditor at the time of the filing, claiming $291,430 in unpaid fees. The developer also owed Calmwater $31 million at the time — the original balance of the loan, plus unpaid interest and fees.
Rubin failed to sell the property to a cash buyer, prompting Calmwater to foreclosure on the property.
Selling at $30 million will settle the loan balance, legal fees and any outstanding liens, but will not give the lender any profit, according to Maxim Hotel Brokerage’s Harry Pflueger, adding the brokerage has already received offers.
A new owner will have to spend up to $30 million to finish construction on the project, and secure a new brand partner, Pflueger said. Any major changes to the development would have to go through city approvals again, so it’s likely a new owner would stick to current plans.
The project also includes an 11-acre outdoor entertainment space, making it suitable for a hotel brand that wants to host concerts, parties or other events, and a retail license to have a cannabis store onsite.
Under a development agreement with the city, the city of Coachella will also rebate 50 percent of a daily transit occupancy tax back to the developer, up to $25 million.
Any hotel near Indio and Coachella is set to benefit from the Coachella and Stagecoach festival masses.
Tickets for this year’s Coachella festival, which spans two weekends in April, were sold out within four hours. Short-term rentals in the area can cost up to $3,000 per night. One night at a Budget Inn motel near the festival site is currently $699 per night for the first weekend of the festival, from $169 a night the weekend prior, according to the hotel’s website.
For the remaining 48 weeks of the year, hotels in the area generally have to rely on a slower stream of Southern California tourists.