Stouffer Hotel Co., a subsidiary of the Swiss company Nestle SA, said yesterday that it has purchased the Mayflower Hotel in downtown Washington from a group of local investors -- including restaurateur Ulysses G. "Blackie" Auger and former U.S. ambassador Kingdon Gould Jr. -- who had owned the landmark property since 1968.
Stouffer paid "a little over $100 million" for the Mayflower, according to one source familiar with the deal. The D.C. government had assessed its value for tax purposes at $65.9 million.
The sale to the Swiss firm, one of the biggest downtown real estate deals in many months of market stagnation, followed the sale of several other so-called trophy hotels in Washington to foreign buyers. The others sold to foreign concerns in recent years include the Hay-Adams, the Watergate, the Jefferson and the Westin.
"It's a little sentimental," said Augur, reflecting on the sale, "but the show must go on." Auger owns Blackie's House of Beef in addition to other restaurants and properties.
If the hotel sold for $100 million, it fetched about $138,000 per room, less than the rates paid for other prominent downtown hotels. The price apparently reflected the hotel's need for refurbishing. A Japanese securities firm and a British hotel company paid about $203,000 per room for the Watergate last June, and another Japanese company paid about $385,000 per room in 1989 for a 90 percent interest in the Hay-Adams.
Stouffer has said it plans to spend $25 million to renovate 350 of the Mayflower's 724 rooms. Over the years, the previous owners had elaborately renovated other parts of the hotel. The sellers were "not in a financial position to complete the renovation," Stouffer Senior Vice President Tom Stauffer said in early January.
Auger said the Mayflower has "been losing money for the investors for some time." The Mayflower's property tax assessment declined from $75.3 million last year to $65.9 in a possible reflection of weaker financial performance.
Auger led the group that sold the hotel along with two other general partners, Gould and Richard S. Cohen. Gould, a descendant of railroad baron Jay Gould and a former ambassador to the Netherlands, has diverse interests in real estate and other businesses. Cohen is a Potomac developer and until recently was a member of the board of directors of Madison National Bank. Cohen's father, William, preceded him as a member of the Mayflower partnership.
The many limited partners who invested in the Mayflower include Parking Management Inc. Chairman Dominic F. Antonelli Jr., who is involved in negotiations with creditors in an effort to avoid bankruptcy.
The Mayflower, at 1127 Connecticut Ave. NW, opened in 1925 and is listed on the National Register of Historic Places. Every president since Calvin Coolidge has held an inaugural party in one of its expansive ballrooms.
Stouffer has managed the hotel since 1981 when it gained a 12 percent ownership stake. The company owns or operates 40 hotels and resorts.