FSLIC Takes Over Radisson : ABC Set to Act Against Hotel Liquor License

SAN DIEGO — It took only 10 minutes Thursday to end developer Carroll Davis’ yearlong bid to regain control of his debt-ridden Radisson Hotel, as federal regulators took over the posh Mission Valley property during a by-the-book, well-attended foreclosure sale Thursday.

But the controversy that has plagued the hotel since it opened in early 1984 probably will continue, as officials of the state Department of Alcoholic Beverage Control plan to file an “accusation” that could eventually lead to the revocation of the Radisson’s liquor license, according to sources close to the hotel. The action is related to several drug-related arrests at the hotel earlier this year, sources said.

Following the foreclosure Thursday, representatives of the Federal Savings & Loan Insurance Corp.--owed more than $30 million in defaulted construction loans made by failed San Marino Savings & Loan--assumed management of the Radisson.

They will remain in place until they can find a buyer for the 13-story, 264-room facility, officials said Thursday.

About 50 people attended the brief foreclosure proceeding in front of the San Diego County Courthouse. None, however, was willing to match FSLIC’s $26-million opening bid.

Among the attendees were Radisson’s court-appointed trustee, C. Hugh Friedman, and his attorney, former bankruptcy judge Ross Pyle.

The new Radisson owners will now organize a plan to market the hotel to a potential bidder, according to Jack Rubin, vice president of the Palmieri Co., the Los Angeles-based management firm representing FSLIC in its liquidation of San Marino’s assets.

“We don’t intend to be long-term owners,” Rubin said, adding that he will “leave open” plans for a second, twin hotel tower.

Rubin said that FSLIC has established Mission Valley Hotel Associates as a subsidiary to operate the hotel. Current Radisson staff will remain on board, he added.

Trustee Friedman turned over possession of the hotel to the new operators Thursday afternoon. However, because the hotel’s temporary liquor license is in his name, he will continue to operate the food and beverage concessions “as a lessee for the benefit of the estate,” he said.

The anticipated ABC action against the Radisson was sparked by a handful of arrests for drug sales and possession at the hotel earlier this year, sources said Thursday. At least one hotel employee was reportedly involved.

Revocation Possible

Penalties for the ABC action could include the revocation of the hotel’s liquor license, or the transfer of the license to another party, according to one source familiar with the pending action.

ABC District Administrator Pete Case confirmed only that some type of action is planned, but he would not discuss specifics of the case or the events that led to the official sanction.

Control of the hotel’s liquor license has been a matter of controversy. The license is in the name of American Real Estate Associates and Bingo Palace, the two firms which, as a partnership, own San Diego Diversified Properties, the developers of the hotel that filed for Chapter 11 bankruptcy reorganization last August.

Neither American Real Estate Associates nor Bingo Palace is in bankruptcy, however.

A temporary liquor license was recently issued in Friedman’s name, as trustee of the bankrupt San Diego Diversified Properties.

Nonetheless, the state’s accusation unexplainably will be against Davis because he was a signatory on the liquor license--despite the fact that he has not set foot in the hotel since he was ousted as operator last June, according to a source familiar with the accusation.

The action would not be against Friedman, who has been in control of the hotel since August, the source said.

Pyle, Friedman’s attorney, said he has been “discussing the entire transfer situation (with state officials), but it hasn’t fully been resolved.”

Pyle would not discuss the pending ABC action, however.

‘Despondent, Distraught’

Davis on Thursday reiterated his claims that the liquor license is being “transferred without my permission.”

For Davis, the foreclosure was not only the end of his struggle to regain control of the Radisson but also the final blow in his four-year comeback from the bankruptcy of his Playboy Club franchises in San Diego and Dallas.

“I’m despondent . . . and I’m financially distraught,” he said after the foreclosure Thursday.

Davis said that a county marshal Thursday served him with a creditor’s bill for services performed at the hotel before he filed for bankruptcy.

Davis’ relationship with both regulators and bankruptcy court officials has been strained at times. At one point last year, regulators accused him of financial “misconduct and self-dealing” and claimed he withdrew more than $1 million from the hotel for his other business ventures and for his personal use.

Davis and his attorneys countered that most of those funds were for business expenses.