Luxury Resort for Sale : After 20 Years of Same Ownership, La Costa Is on the Market

For years, it has been a virtual island unto itself, a plush, internationally known resort on the southern flank of Carlsbad.

Since its grand opening in 1965, the La Costa Resort Hotel and Spa has built an image as one of the premier playgrounds for the rich and famous, drawing presidents and oil barons, captains of industry and Hollywood stars.

But now the renowned resort is up for sale.

A Japanese firm that specializes in the development of country clubs, Sports Shinko Co., is negotiating to buy it. No details of the deal have been released, but officials with Sports Shinko say they expect the sale to be final before the year is out.

If the spa and hotel complex does indeed change hands, it would mark the end of an era.

Owned by Original Buyers

Since La Costa was founded more than two decades ago, it has been owned by the same people who first began carving it out of the grassy hills--on-site manager Allard Roen, developer Irwin Molasky and Merv Adelson, chairman of Lorimar-Telepictures Corp. and husband of broadcast journalist Barbara Walters.

“They’ve been there for 20-some years,” said Carlsbad Councilman John Mamaux, who was city manager during the resort’s formative years. “That’s a long time. They’ve been good to the community and done a great job.”

Neither Roen nor Gerald T. Gleason, La Costa’s executive vice president, would return phone calls from The Times.

Currently, Sports Shinko is busy finalizing the purchase of a 1,000-acre golf and tennis resort in Florida, said Takashi Yoshida, the firm’s general manager. Sports Shinko is eager to acquire a West Coast site to go along with the Florida properties as well as country clubs it owns in Hawaii and Japan, he said. La Costa seems to fill the bill.

“There are a few problems yet to be worked out before closing,” Yoshida said in a telephone interview from his Tokyo office. “We are conquering those problems and we hope to obtain La Costa very soon, probably within the year.”

Some Neighbors Uneasy

While the talk of a sale has raised few eyebrows among residents of the surrounding community, some neighbors have expressed uneasiness about the resort becoming a destination spot catering almost exclusively to Japanese tourists. Such concerns have been fueled by the nature of Sports Shinko’s two country clubs in Hawaii, which are frequented mostly by Japanese.

“I don’t think it would be good if it became just an exclusive resort for Japanese visitors,” said John Strayer, a longtime La Costa resident active in organizing sports programs in the community.

“Myself and a lot of people are more in favor of American owners. But if the Japanese take over, I’d hope they’d become involved in the community.”

Other residents, however, suggest that the resort probably will continue to serve a broad-based international clientele, whoever owns it. Indeed, one resident who belongs to the resort said she thought a change would do La Costa some good.

“Who cares who runs it, as long as it runs nicely,” said the woman, who requested anonymity. “A new broom generally sweeps cleaner than an old one. They’ve had it 20 years, maybe it’s time for some new blood.”

Will Retain Character

Kim Marshall, a spokeswoman for the resort, said the complex, if sold, will undoubtably retain much the same character that has made it a prime destination spot for the wealthy.

“We’ll still attract Americans,” she said. “It’s just not realistic to think otherwise.”

Just why Roen and his partners are talking about selling the resort remains something of a mystery.

The spa and hotel recently underwent a $100-million renovation, and some residents of the surrounding community speculate that the operation may be hurting financially. What’s more, Adelson’s television and movie producing firm earlier this year posted huge quarterly losses and announced the sale of several television stations and magazines.

But Marshall said there had been “no panic” on the financial front. Rather, the three owners had decided to sell if they could get the right price, she said, noting that “sentimentality only goes so far.”

Under the stewardship of Roen and the rest, the hotel and spa gained a widespread reputation as a haven for the well-to-do.

Movie stars such as Barbra Streisand, Bette Davis and the late William Holden have spent time there. The resort has played host to innumerable conferences from a Who’s Who of the business world: Coca-Cola, Eastman Kodak, IBM and Kraft Foods, to name a few.

In 1975, Richard Nixon chose La Costa to make his first public appearance after resigning the presidency. U.S. Chief Justice Earl Warren used to make regular excursions to the resort for some off-the-bench R & R.

Rumors of Crime Tie

Along the way, the resort was riddled with rumors of connections with organized crime, and one article even called La Costa a gathering place for “thieves and hoods.”

Innumerable investigations were launched by the FBI, the state, the local authorities. At one time, law enforcement officials boasted of having undercover officers stationed in the resort’s locker room as well as informants in the rubdown room and at the hotel switchboard.

All the interest was triggered largely by the fact that the owners had received a $57-million loan from a Teamsters Union pension fund to help start the operation. Moreover, Roen and the others all had backgrounds as operators of Las Vegas casinos.

Ultimately, however, none of the investigations resulted in any charges being filed against the resort’s owners.

“I think people took those rumors for what they’re worth,” said Mamaux. “Look, (former U.S. Supreme Court Chief Justice) Earl Warren used to go to La Costa, so he obviously didn’t pay much attention to the Mafia rumor.”

Guests Pampered

Today, the 600-acre spa rolls on much as it always has, its more than 1,000 employees attending to the every need of the guests.

Guests can choose from among seven restaurants and three bars. They can tour either of the resort’s two 18-hole golf courses or sample play on one of the 23 tennis courts (grass, clay or concrete).

Visitors can take a run around the private track, swim at the aquatics center, or simply lounge in the 180-seat theater that features first-run movies each night. The spa features Roman baths, rock steam rooms, Swiss showers, herbal wraps, loofah rubdowns and all-body massages.

Of course, all this luxury doesn’t come cheap. Rates in the 482-room hotel range from $185 to $1,200 a night. Top dollar buys one of the complex’s two presidential suites.

With those prices, few residents of the surrounding community take advantage of the facilities. While solidly upper middle class, most of the homeowners in La Costa are hard pressed to justify a $50 massage or $40 green fees.

Indeed, most seem little concerned about the pending sale.

“It’s two separate worlds,” said Mamaux. “To the average guy with a home, I don’t think it will make a bit of difference who owns it.”