SANTA BARBARA, CA— With a heavy concentration of independent and branded properties along the West Coast of the United States, Pacifica Hotel Co. has been active on most lodging tracks during the past year: acquiring, divesting, developing and renovating hotels. It also made a leap to Florida where it is constructing a Hilton Garden Inn that is slated to open in November in Port St. Lucie. Much of the movement has occurred under the guidance of industry veteran Michael Barnard, who was promoted to president/ COO of the hotel company in October 2005, part of a reorganization by parent Invest West Financial, headed by Chairman/CEO Dale Marquis, who also serves in that position for Pacifica. Also in Barnard’s bailiwick is real estate company Pacifica Hotel Investors, the company’s vehicle for transactions and development, and Pacifica Design Group, both of which he had oversight of prior to his promotion. “The change in the company was really focusing on development and acquisitions, strengthening our portfolio and doing much more strategic thinking about where we we wanted to be, what we wanted to be,” he said. Part of the transformation process was to set the bar higher in terms of the properties and the staff who would run them. Pacifica owns and operates almost two dozen hotels stretching from San Diego to the San Francisco Bay area. About half its California properties fly flags of Best Western International, Holiday Inn Express and Quality Inn and Suites. The remainder, such as the Spyglass and Sandcastle Inns in Pismo Beach and the Carlyle Inn in Beverly Hills, are unaffiliated. Pacifica also third-party manages some properties, including the Hotel Villa Portofino in Avalon on Catalina Island. The company previously invested heavily in renovations to its portfolio and this year infused $4 million on three projects alone. It spent $1.5 million each of the 87-unit Pacifica Suites here and the 97-room Lighthouse Hotel in Pacifica to enhance guestrooms, lobbies, meeting rooms and corridors. In addition, it invested $800,000 to refurbish the 80-room Half Moon Bay Lodge outside San Francisco. “What we wanted to overcome was good was not good enough— we want to be great. That’s really the message that we’re sending to everybody. And it’s working. Our hotels are up significantly over last year. We’ve improved our people and our perspective,” said Barnard, adding revenue management also has improved dramatically. “It’s really been a focus on quality.” He added the renovations have driven significant increases in rates. “It’s amazing. It can be a $20, $30, $40 increase in average rate,” said the executive, noting the rates at Lighthouse and Half Moon have risen $25 and $20, respectively. The company intends to follow its number-one strategy for growth by continuing to concentrate on high-barrier markets in California. It recently honed in on Marina del Rey, where it acquired and intends to upgrade over the next several years the 157-room Marina del Rey Hotel and Marina and the 135-room Marina International Hotel and Bungalows. It also has the Best Western Jamaica Bay Inn there, which is slated to undergo a gut renovation next year. Barnard viewed the Marina del Rey hotels— slated for an aggregate $40 million in revamps— as a long-term hedge against the eventual downturn in the lodging cycle, and said Pacifica also was looking at refinancing and locking in long-term conduit financing on “a lot” of its hotels. “If we can be in the 6% to 6.25% interest range on 10-year, fixed conduit loans— we’re aggressively pursuing that— once we’re locked in there, we will have refinanced or adjusted all of our loans on all of our properties. That’s going to help us if there’s a slow down,” he said. Another strategy is to do premium-branded development via opportunistic acquisitions, such as the Florida Hilton Garden Inn. Toward that, Pacifica entered into a joint venture with the Professional Golf Association (PGA) to bring the Port St. Lucie project out of the ground with 130 rooms. “It’s across from the PGA Learning Center, which is where all the teaching pros go for education. Now they have a hotel and restaurant facility immediately across the street from what is a conference center, museum, driving range, teaching center and three premier golf courses. We’re almost sold out for the first six months after we open,” said Barnard. “We really look at who our partners are and why we do business with them because we want to continue with the relationship,” he said, adding through some of the contacts made with the PGA, “we’re actually looking at some other developments in some unique situations on the East Coast (mid-Atlantic).” He declined to go into detail on those potential deals. Barnard did say the company had looked at properties in Mexico, and would continue to do so in coastal, leisure-oriented markets there. “It matches up with our profile in the U.S….we think that would be a good fit for the company.” Other areas under consideration include Monterey, Carmel, San Francisco and Sausalito in California, Seattle, WA; and Portland, OR. Pacifica also divested a Hilton Garden Inn that it had developed in Rancho San Bernardo via a joint venture with San Antonio, TX-based Leddy Ventures Ltd. “We kept on hearing how much we could get for the hotel. So, quite honestly, opportunistically we said let’s see what the market will take and we got a price in 2006 that was $3 million more than we pro formaed for selling it in 2009.” The 200-room property sold for $34.5 million. At press time, Pacifica had a Holiday Inn Express in St. Louis, MO, on the market, which Barnard felt would be the last “official” divestment for awhile— “unless someone comes in and offers us crazy money for something. We’d look at it. But in terms of what we thought would maximize our position and allow us to continue to grow, I think we’re at a point where we’re done divesting and strategically, we’re pleased where we are.” Still, the executive indicated Pacifica Hotel Co. would stay alert to the economy and “see where the market takes us, because right now it’s a little iffy whether you should be an acquirer or if you should be a seller or if you should be a developer.”