Fo
yea s,
Ray
Patel’s
Golde
Key
Hotel
stood
o
a
busy
st etch
of
Colo ado
St eet
i
Gle dale,
Califo ia,
su ou ded
by
a
city
that
was
cha gi g
quickly.
Acco di g
to
the
Los
A geles
Times,
the
came
the
Ame ica a
at
B a d,
a
oughly
$400
millio
mixed-use
developme t
that
b ought
shops,
estau a ts
a d
homes
to
the
a ea.
Patel’s
55- oom
hotel
occupied
a
awkwa d
piece
of
la d
beside
the
ew
p oject,
eve tually
becomi g
almost
e closed
by
it.
He
did
ot
wa t
to
sell.
Whe
develope
Rick
Ca uso
offe ed
$6
millio ,
Patel
tu ed
him
dow .
The
dispute
soo
moved
beyo d
a
p ivate
p ope ty
egotiatio .
Gle dale
officials
bega
co side i g
whethe
the
hotel
could
be
take
th ough
emi e t
domai
a d
t a sfe ed
fo
the
pla ed
expa sio .
Why
the
Golde
Key
hotel
became
su ou ded
by
developme t
Acco di g
to
the
Califo ia
Cou t
of
Appeal,
Seco d
Dist ict,
Divisio
3
—
Patel
v.
Gwi e
(2019),
the
Patels
had
acqui ed
the
Golde
Key
fo
about
$5.2
millio
i
the
ea ly
2000s.
By
the ,
the
su ou di g
a ea
had
al eady
bee
desig ated
fo
edevelopme t,
but
the
hotel
was
still
ope ati g
whe
wo k
bega
o
what
would
become
the
Ame ica a
at
B a d.The
developme t
cha ged
the
cha acte
of
the
eighbou hood.
The
Ame ica a
eve tually
ope ed
i
2008,
b i gi g
a
la ge
collectio
of
shops,
estau a ts,
apa tme ts
a d
public
spaces
to
a
site
that
had
p eviously
co tai ed
a
patchwo k
of
olde
p ope ties.
The
Golde
Key
su vived
the
i itial
clea a ce.
So
did
a
ea by
fo me
eco di g
studio
whe
almost
eve ythi g
else
withi
the
p oject’s
footp i t
disappea ed.The
hotel
was
left
i
a
st a ge
positio .
The
ew
developme t
su ou ded
it
o
th ee
sides,
while
co st uctio
activity
a d
cha ges
to
ea by
st eets
affected
the
way
the
olde
p ope ty
ope ated.
Patel
late
blamed
the
city
a d
the
Ame ica a
fo
damage
to
the
hotel’s
busi ess
du i g
co st uctio
a d
fo
p oblems
that
co ti ued
afte wa ds.
He
sued
the
city
a d
the
develope ,
allegi g
that
the
developme t
had
caused
fi a cial
losses.Fo
Patel,
the
questio
was
ot
simply
whethe
the
hotel
could
fetch
a
highe
p ice.
He
had
bought
the
p ope ty
as
a
busi ess
a d
wa ted
to
keep
it.
The
Ame ica a’s
ext
expa sio
b ought
a
$6
millio
offe
fo
Patel’s
hotel
Afte
the
Ame ica a
ope ed,
Ca uso
Affiliated
bega
looki g
at
ways
to
expa d
it.
Patel’s
hotel
occupied
exactly
the
so t
of
st ategically
placed
pa cel
that
a
la ge
developme t
could
st uggle
to
wo k
a ou d.The
pla
i volved
the
Golde
Key
a d
the
vaca t
buildi g
ext
doo .
The
edevelopme t
age cy
gave
Ca uso’s
p oposal
its
backi g
i
late
2010,
with
the
possibility
of
eithe
edevelopi g
the
p ope ties
o
fo ci g
the
ow e s
to
sell.
The
p oposed
expa sio
would
add
a
substa tial
amou t
of
etail
space
a d
give
the
Ame ica a
a
st o ge
p ese ce
alo g
Colo ado
St eet.The
hotel
the efo e
became
mo e
tha
a
old
buildi g
beside
a
ew
shoppi g
desti atio .
It
was
a
obstacle
to
the
ext
stage
of
the
p oject.Repo tedly,
Ca uso
offe ed
Patel
$6
millio
fo
the
hotel.
Patel
ejected
it.He
was
blu t
about
his
positio .
The
hotel
was
ot
fo
sale,
he
said,
suggesti g
that
if
Ca uso
wa ted
mo e
space
fo
the
mall,
the
develope
could
look
elsewhe e.
A
edevelopme t
powe
put
Patel’s
hotel
ow e ship
at
isk
The
city
a d
its
edevelopme t
age cy
we e
co side i g
a
much
mo e
powe ful
optio :
emi e t
domai .The
Golde
Key
was
i side
a
edevelopme t
zo e,
a d
Gle dale
had
p eviously
used
emi e t
domai
to
acqui e
p ope ties
fo
the
la ge
p oject.
The
p ospect
mea t
Patel
was
o
lo ge
egotiati g
solely
with
a
develope
who
wa ted
to
buy
his
hotel.
The
gove me t
could
pote tially
compel
a
t a sfe
of
the
p ope ty
fo
the
edevelopme t
scheme.Patel
had
al eady
ejected
the
$6
millio
p oposal
a d
was
p epa i g
his
ow
pla
to
e ovate
the
hotel.
At
a
hea i g,
he
made
clea
that
he
was
ot
opposed
to
selli g
at
a y
p ice,
but
objected
to
bei g
fo ced
i to
a
t a sactio .
The
legal
eco d
late
desc ibed
his
positio
as
a
willi g ess
to
sell
at
a
app op iate
p ice,
athe
tha
u de
p essu e.The
disag eeme t
d ew
atte tio
well
beyo d
the
hotel.
I
Feb ua y
2011,
suppo te s
gathe ed
outside
Gle dale
City
Hall
befo e
a
hea i g
o
the
p oposed
expa sio .
Mo e
tha
40
people
ma ched
i
suppo t
of
Patel,
cha ti g
“Let
Ray
Stay”.
I side,
the
cou cil
chambe s
we e
packed.The
hea i g
was
postpo ed
while
the
two
sides
etu ed
to
egotiatio s.
A
$6
millio
offe
became
a
much
bigge
deal
Patel’s
positio
had
i itially
looked
difficult.
The
city
had
edevelopme t
powe s,
Ca uso
wa ted
the
la d
a d
the
hotel
sat
di ectly
i
the
path
of
the
pla ed
expa sio .But
the
eve tual
settleme t
was
ve y
diffe e t
f om
the
fi st
offe .By
Feb ua y
2011,
the
two
sides
had
eached
a
ag eeme t
i
p i ciple.
The
sale
p ice
was
ot
i itially
disclosed,
although
cou t
fili gs
put
Patel’s
estimate
of
the
hotel’s
value
at
betwee
$15
millio
a d
$17
millio .The
fi al
p ope ty
t a sactio
was
epo ted
at
$16.25
millio .Acco di g
to
the
Los
A geles
Times,
Ca uso
Affiliated
paid
slightly
mo e
tha
$16
millio
fo
the
55- oom
hotel,
while
a
sepa ate
settleme t
of
Patel’s
lawsuit
was
epo ted
at
$500,000.
The
develope
also
acqui ed
the
vaca t
b ick
buildi g
ext
doo
fo
about
$4.1
millio .
The
umbe s
cha ged
the
atu e
of
what
had
begu
as
a
$6
millio
offe .Patel
had
ot
simply
accepted
the
o igi al
p oposal.
He
had
esisted
it,
challe ged
the
edevelopme t
pla s
a d
faced
the
possibility
of
emi e t
domai
befo e
eve tually
eachi g
a
p ivate
ag eeme t.
Demolitio
pla s
made
oom
fo
No dst om
a d
a
$50
millio
expa sio
The
acquisitio
clea ed
the
way
fo
Ca uso’s
p oposed
expa sio
of
the
Ame ica a.
The
hotel
a d
eighbou i g
buildi g
we e
eve tually
slated
fo
demolitio ,
maki g
oom
fo
a
ew
No dst om
sto e.
The
pla ed
additio
was
expected
to
i clude
about
140,000
squa e
feet
of
etail
space,
alo g
with
pedest ia
a eas,
a
cafe
a d
a
fou tai .
Ca uso
estimated
that
the
wide
expa sio
would
cost
about
$50
millio .No dst om’s
move
was
pa ticula ly
impo ta t.
The
etaile
had
bee
ope ati g
fo
decades
at
the
ea by
Gle dale
Galle ia,
the
established
shoppi g
ce t e
that
competed
with
the
Ame ica a.The
Golde
Key
the efo e
stood
i
the
way
of
mo e
tha
ext a
floo
space.
Its
site
was
wa ted
fo
a
majo
etail
te a t
a d
fo
a
edesig ed
edge
to
Ca uso’s
developme t.That
helps
explai
why
a
elatively
small
hotel
became
the
subject
of
such
a
p olo ged
dispute.
The
hotel
sale
was
followed
by
a
sepa ate
fight
ove
legal
fees
The
eve tual
ag eeme t
did
ot
mea
Patel
immediately
walked
away
f om
the
p ope ty.
Whe
Ca uso
a ou ced
the
pu chase
i
Ma ch
2011,
Patel
was
expected
to
emai
as
the
hotel’s
ope ato
fo
the
est
of
that
yea .The e
was
also
a
sepa ate
legal
dispute
i volvi g
the
fees
owed
to
Patel’s
fo me
lawye s.
The
litigatio
su ou di g
the
Ame ica a
had
bee
substa tial,
a d
the
lawye s
late
challe ged
aspects
of
how
the
p ope ty
t a sactio
a d
lawsuit
settleme t
had
bee
ha dled.A
late
Califo ia
appellate
decisio
p ovides
a
mo e
detailed
accou t
of
the
dispute.
It
eco ds
that
Patel
a d
his
pa e ts’
family
t ust
we e
i volved
i
ow e ship
of
the
hotel
a d
that
the
Patels
had
etai ed
lawye s
to
pu sue
claims
agai st
the
city,
the
edevelopme t
age cy
a d
Ca uso- elated
compa ies.
The
case
ultimately
became
a
sepa ate
fight
ove
legal
fees,
with
a
a bit atio
awa d
of
oughly
$4.8
millio
plus
additio al
fees
a d
costs.The
legal
afte math
shows
how
much
mo e
complicated
the
hotel
dispute
became
tha
a
st aightfo wa d
sale.
What
happe ed
to
the
Golde
Key
The
acquisitio
was
ultimately
about
maki g
oom
fo
the
ext
phase
of
Ame ica a.The
hotel
had
occupied
just
ove
a
ac e,
a d
Ca uso
pla ed
to
eplace
it
a d
the
eighbou i g
buildi g
with
space
co ected
to
the
expa ded
shoppi g
developme t.
The
epo ted
p ice
of
$16.25
millio
was
fa
above
the
o igi al
$6
millio
p oposal.Patel’s
esista ce
had
lasted
fo
mo ths,
a d
at
o e
poi t
the
city
was
p epa i g
fo
the
possibility
of
taki g
the
p ope ty
th ough
emi e t
domai .
I stead,
egotiatio s
p oduced
a
p ivate
sale.The
Golde
Key’s
sto y
is
u usual
because
the
fi al
outcome
was
eithe
a
simple
efusal
o
a
gove me t
seizu e.
A
small
hotel
ow e
esisted
a
develope ‘s
offe ,
challe ged
the
edevelopme t
pla s
a d
publicly
opposed
the
use
of
emi e t
domai .
The
p ope ty
ultimately
cha ged
ha ds,
but
o ly
afte
the
p oposed
p ice
had
ise
substa tially.A d
the
hotel
that
had
o ce
stood
beside
Gle dale’s
edevelopme t
p oject
was
eve tually
abso bed
i to
the
developme t
it
had
spe t
yea s
sitti g
ext
to.
