The consortium that has purchased the Hilton includes eminent names in the U.S. and Japanese investment fields and an individual well known to the Marianas business community.

David L. Wickline managing partner of Pacific Holdings which secures hospitality assets in the Asia-Pacific region and the West Coast has invested in the purchase although he declined to specify the amount. “I have a continuing economic interest in the property ” he told the Journal.

Wickline was one of the keynote speakers at the Captain Co.’s 2nd Micronesian Real Estate Investment Conference in Guam on Sept. 19 2003 (See Real Estate conference offers solutions ” in the Oct. 6 2003 issue of the Journal.).

Wickline who is resident of San Francisco Ca. will visit Guam again in December. He played a pivotal role in the sale. “I originated the transaction negotiated it and brought in the investment group ” he said. DaVinci-RP Hotel Investors LLC is the purchaser. Wickline described himself as “adviser” to the operating lessee. The Hilton’s management contract is with DaVinci-RP Operating Lessee Inc.

Wickline said he would continue to interface with the Hilton. “There are several people involved and I’m one of them.”

A potential investor from Saipan is not now part of the consortium.

The sale amount includes a $4.25 million deposit with further financing of $25 million by Aozora Bank Ltd. of Tokyo. Wickline said “Sonnenblick-Goldman served as investment banker in helping arrange the bank loan from Aozora Bank but is not making an investment.”

Prior to the sale the Ysrael family sold its remaining share interest in the hotel at what was described to the Journal as “a significant price ” and “several times” the share value. The Ysrael family had previously entered into negotiations with Hilton at a price understood by the Journal to be about $43 million.

W. Nicolas Captain president of the Captain Co. real estate consultants and president of the Captain Real Estate Advisors was consultant to the sale. He described the transaction as “the first large Japanese-bank financed transaction in this region in a dozen years.” Captain said although the sale would “serve as a benchmark for hotel values in Tumon hotel values in Tumon are highly differentiated. The Hilton is unique because of the three phases of its construction.” He said timing of the sale was also a factor in hotel valuation. “The terms of the transaction were negotiated during the bottom of the real estate market. We have already seen a significant upturn. Hotel values have already bottomed out.”

After months of negotiation that began in November 2003 (See Bargain Buy ” in the Dec. 1 2003 issue of the Journal) the sale was publicly confirmed by Manfred H. Pieper general manager of the Hilton at a press conference on Nov. 17. Employees were advised of the change in ownership in a memorandum the same day. The sale was inked on Nov. 17 in New York.

The sale allowed for renovation and linkage of payment price to operating performance. (“See Hilton going to consortium ” in the April 19 issue of the Journal.). Wickline described the terms as “complex.” He said “It’s a very creative transaction — based on performance — very much a win-win situation for Hilton and the investment group — the way all good transactions should be structured.”

Also as earlier reported the sale stipulations included work on the property and renovations to the 100-room Magahaga wing and the Genji Restaurant both of which closed after damage from Supertyphoon Pongsona which hit Guam on Dec. 8 2002. Further areas of renovation will include the hotel’s other 587 rooms.

Sixteen acres of the 32-acre lot remain undeveloped. How that undesignated area will be developed is presently uncertain. Wickline said “It’s too early to have any judgment about that yet.”

He said the renovations were “important for the property’s performance. All that will mean a good end product for Guam as a tourist destination.”

Upgrading Pieper said “would be upwards of $10 million and might begin in the first quarter of 2005 with a completion date of 2006. Eventually the hotel could offer another 50 positions at the hotel ” Pieper told the Journal at the conference.

Wickline said Pieper’s comments were “quite accurate. He did a good job of articulating those views.”

Another condition of the sale as the Journal first reported was that Hilton International would continue to manage the hotel. As Hilton International’s offices in Singapore confirmed to the Journal in November 2003 and in a later release to other media Hilton has moved from ownership to management of its hotels.

Pieper confirmed at the conference that Hilton would continue to manage the hotel that existing contracts with tour wholesalers and suppliers would remain in place and that the management team and the hotel’s 455 employees will continue in their positions albeit as employees of DaVinci.

Wickline said Pieper was to be congratulated on his management of the hotel. “Manfred Pieper has done a terrific job there for all these years. There’s no way of underestimating the importance of having a good hotelier especially in a market like Guam where — having a certain anticipation of local business — you have a general manager that takes such interest in the hotel.”

The sale was handled by Jones Lang LaSalle brokers in Singapore and diligence on the property was conducted by Von Watson Architects. The Hilton declared revenues of $28 million for 2002 and $30 million for 2001 in the Guam Business/Deloitte & Touche Top 50 Companies in Micronesia survey.

No stranger to Micronesia Wickline first visited the region in the ‘80s (See “Quotables” on Page 9.) when he represented Goldman Sachs in financial negotiations with the governments of Guam and Saipan. The $140 million loan to the government of the Northern Mariana Islands for infrastructure improvements he said “Was the first major international financing for the government of Saipan.” Repayment of bond financing was linked to pledges by the U.S. Department of the Interior to payments to the government of the Northern Mariana Islands. “Before that ” Wickline said “Annual grants were a Band-Aid approach.” He said of the CNMI government at the time “It took great courage to enter into financing of that scale and magnitude.”

Wickline has retained friends and contacts in Micronesia since then and has followed the fortunes of the region. “All of the projects [I am involved in] are ones I truly believe in. I fell in love with the islands and the people here. What attracted me was U.S. soil in the heart of Asia.”

He said he has long had faith in the region’s potential. “It’s a market that has always been resilient. The fundamentals are good and it was bound to have an upturn. I think there’s a lot of confidence in the Micronesian region. That’s why I’ve long been interested in other developments in Saipan and Palau. The region has weathered a difficult period since 1997 when the Asian economy collapsed.”

Wickline is also investing in a golf resort development at Obyan Beach in the south east of Saipan. He anticipated development would begin on the 500-acre plus site in 18 months. He said the resort had been in planning for “many years. It’s not for the faint of heart — you go through all kinds of challenges. We took a creative approach to permitting issues and even got praise from environmental groups.”

The gaming initiative Wickline said “was of interest but we never really factored that into our considerations. It was something with an uncertain outcome.” MBJ