Relevant Group Sells Morrison Hotel Site at a Loss to AHF

by NEW YORK DIGITAL NEWS


Relevant Group has sold the Morrison Hotel in Downtown Los Angeles — named after appearing on The Doors’ album cover of the same title — to AIDS Healthcare Foundation, The Real Deal has learned. 

The hotel developer, run by Grant King, sold the 111-key hotel at 1246 Hope Street for $12.4 million, according to a deed filed with L.A. County earlier this month. King did not respond to a request for comment. 

The sale is both a loss and reprieve for Relevant — the firm bought the hotel for $18 million in 2018, records show. Relevant had spent another $20 million buying up sites around the hotel. No deeds have been recorded for adjacent sites. 

However, the sale resolved a default on Relevant’s loan on the project. In September, Relevant was served with a notice of default from lender Columbia Pacific Advisors, which said Relevant owed $13.2 million, records show. 

A reconveyance deed was filed after the sale closed, meaning the loan was paid off or forgiven. 

Relevant and nonprofit AHF also signed a “development cooperation agreement” to jointly build a residential, hotel or commercial project, records show. The agreement was a condition of the sale. 

Relevant had sought a development partner on the site since last year — it was offering a 50 percent stake in the project, according to marketing materials obtained by TRD

The Morrison Hotel was built in 1914 and was later converted into a single-room occupancy property — until Relevant revealed plans six years ago to build a 444-key hotel with 136 residential units at the site. 

And to make up for removing the single-room occupancy use — housing typically reserved for low-income earners — Relevant planned to build a 149-unit supportive housing project. 

It’s not clear how much Relevant’s plans will change with AHF’s involvement. 

The sale was subject to the city of L.A.’s new transfer tax — a 4 percent levy on all commercial and residential sales over $5 million, and 5.5 percent on sales over $10 million. 

On this deal, the city’s tax bill came out to more than $700,000. When Relevant bought the property in 2018, at a higher price, the city’s tax on the transaction was $81,000. 
AHF also owns the 155-unit Barclay Hotel in Downtown L.A., an affordable residence hotel with relatively low rents, likely in the hundreds of dollars per month for some longtime residents.

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