Five Hotels With Identity Issues

A San Diego real estate fund bought the old Yacht Harbor Tower of Honolulu's once-iconic Ilikai hotel for $112 million in 2006. It spent more than $200 million to renovate it into the 353-room Edition Waikiki, the first branch of a chain that Marriott Hotels and boutique specialist Ian Schrager announced in 2007. Marriott and Schrager were supposed to open 100 Edition hotels in the first 10 years, but so far there's only one other branch (in Istanbul). Claiming that the Waikiki Edition had lost $8.4 million since it opened in October 2010, the owner locked out Marriott and its employees in August. Marriott obtained a restraining order to reclaim management, but the owner put the property in bankruptcy and that has frozen Marriott out. Now locally managed, the hotel is called The Modern Honolulu.—by Joe Brancatelli

During the height of the hotel and condo boom in South Florida, a developer called Castillo Grand planned a five-star, 166-unit hotel/condo for Fort Lauderdale's Gold Coast. The owner brought in Starwood, parent of brands such as W and Sheraton hotels, to put its St. Regis luxury name on the project. The owner and Starwood squabbled from the start, and the property opened two years late, in May 2007. Starwood announced it was quitting its 20-year management contract in May 2008 and Castillo Grand scrambled for a replacement. It gave Ritz-Carlton (a division of Marriott) a 50-year management deal on extremely advantageous terms. Castillo Grand sued Starwood and a New York judge last week ruled that the defendant owed Castillo Grand $44 million. Starwood says it will appeal.

The Four Seasons Aviara opened in 1999 in Carlsbad, California, about 35 miles from San Diego. The 200-acre, 329-room resort won raves and coveted five-star status. But it all went awry in the spring of 2009, when the resort owner said they "lost faith and confidence" in Four Seasons. Aviara's owner, a consortium of hotel and real estate investors, ordered Four Seasons off the property in March 2009, but Four Seasons refused to go. Ugly rhetoric and nasty lawsuits flew, and, at one point, Four Seasons posted barricades and checkpoints to keep the owners off the property. The dispute went on for more than a year. Arbitrators eventually ruled both parties were at fault, but allowed the owners to replace Four Seasons. In June 2010, Hyatt took over the resort and made it part of its Park Hyatt luxury division.

Built in the 1970s, the 300-acre, 392-room Turnberry Isle Resort in Aventura, Florida, brought in Fairmont Hotels to manage the property in early 2004. New owners then signed Fairmont to a long-term management agreement late in 2005. In early 2006, the property was closed for a renovation estimated to cost between $100 million to $150 million. After reopening in time for the 2006 Christmas season, Fairmont and the owners, Turnberry Associates, began squabbling. They spent years arguing over—and litigating about—management fees, resort policies, and just about everything else under the Florida sun. Late in August, the owners booted Fairmont and took over management of the resort. In October, a New York judge denied Fairmont's request for a restraining order, even though he said that Fairmont had acted within its rights as hotel manager.

Atlantic City's smallest casino opened in 1980 as the Golden Nugget. The 809-room property with just 75,000 square feet of gaming space has gone through a number of ownership and name changes over the years. You might have known it as Bally's or The Grand. Hilton Hotels took over in 1996, and the property remained in the Hilton fold even after it was sold to Colony Capital in 2005. But a series of squabbles between Colony and Hilton led Hilton to strip the property of its franchise earlier this year. The hotel tarried in removing the Hilton name, but finally began calling itself ACH (get it, Atlantic City Hilton). A deal between Colony Capital and its lenders call for the hotel to remain open through at least 2012, but gaming experts wonder if the property, which lost nearly $11 million in the first half of the year, can survive.