Auberge Expands Outside U.S. Into Mexico

MILL VALLEY, CA— Auberge Resorts, owner and/or operator of five hotels and management consultant for another, is in a growth mode with its first international property opening in Mexico in 2002. Three more domestic hotels are in various stages of development. “We’ve looked at some other properties and will take on a few more opportunities within the next year or two,” said Mark Harmon, principal of Auberge, based here. Harmon said that, “We are looking at golf resort properties and small boutique hotel properties, but we want to proceed slowly and carefully [in order]to devote time and attention to details.” And while Harmon was quick to recognize that “there are some beautiful properties back East,” he noted that there are currently no plans to expand east of California for several reasons. In addition to the travel time required for far-flung properties, he said, “We like to… focus a lot of energy on them.” To do that, Auberge properties need to be within a reasonable distance of the headquarters. However, Auberge is expanding, stretching its reach into Mexico. Slated to debut early next year, the new Esperanza Resort, a $65 million project in Punta Ballena, Los Cabos, Mexico, overlooks the Sea of Cortez and the Pacific Ocean. The property incorporates two components: a 50-room and six-villa hotel plus an 80-villa residential club adjacent to the hotel. The private villas are a “concept of fractional ownership” similar to timeshare, said Harmon. He explained that owners will get a deed and have access to the hotel’s amenities and facilities such as the spa, restaurant and concierge. He anticipates that the private villas will open late this year and noted that there has already been a “tremendous amount of pre-sales.” Properties currently in developmental stages include: the Pauoa Golf Club on the island of Hawaii; Campagna, a 50-room country inn in Sonoma Valley, CA; and the 87-unit Palisades Spa & Resort in Calistoga, CA. The Pauoa Golf Club will be situated on 50 acres of beach and will feature an 18-hole golf course designed by Robert Trent Jones Jr. The golf club will also offer a clubhouse, restaurant, bar, practice facilities and pro shop. Harmon noted that Auberge is now securing plans and permits for Campagna, which is expected to open in 2003. The inn will be located on 175 acres overlooking the Sonoma Valley and will offer a spa, estate winery and restaurant. While the Palisades Spa & Resort is still only in the planning stages, Harmon expects construction to begin next year with an opening anticipated in two years. Although Auberge properties tend to range between 50 and 60 units “to maintain intimacy and quality of service,” this 25-acre property will feature 89 cottages. Additionally, there will be six acres of vineyards and a 15,000-square-foot spa with private treatment cottages. The combined development cost for these three properties is approximately $95 million, according to Harmon. He noted that “the funding is different for different projects.” Auberge does have investors and works with financial institutions that have “tremendous capital” as well, he said. Harmon added that while Auberge manages all of its properties, it is “at least part owner in all of the properties.” Auberge currently provides management consultation for the 43-suite Rancho Valencia Resort in Rancho Santa Fe, CA. The hotel is a member of Relais & Chateaux, “a venerable group of hotels, typically less than 100 rooms,” which is affiliated with the Leading Hotels of the World. Auberge’s 38-room San Ysidro Ranch in Montecito, CA is also a member of Relais & Chateaux. Additional properties in the Auberge portfolio include the CordeValle in San Martin, CA; The Lodge at Skylonda in Woodside, CA; El Dorado Hotel in Sonoma, CA; and Auberge’s flagship hotel, the Auberge du Soleil in the Napa Valley. The Auberge du Soleil recently opened a 7,000-square-foot spa which was developed at a cost of $3 million. Harmon noted the p