The new Shahs of Sunset: Behind Jeff Klein’s deal to bring in Len Blavatnik as partner on Sunset Tower Hotel

Klein will continue to manage 81-key celeb hotspot

May.May 24, 2017 01:15 PM
From left: Jeff Klein, the Sunset Tower Hotel and Len Blavatnik (Getty, JK Hotel Group)

Good news for L.A.’s glitterati. The Sunset Tower Hotel — the see-and-be-seen hotspot whose Tower Bar hosts enough A-listers to keep the city’s gossip rags in business —  won’t be going anywhere for now.

Not only is hotelier Jeff Klein staying involved in his celebrity hotspot, he has brought on Len Blavatnik, the billionaire industrialist behind luxe hotels such as the Four Seasons Grand Hotel du Cap Ferrat, as his partner.

Blavatnik’s Access Industries partnered with Klein to buy out his former partner, an entity connected to Thai billionaire Thosapong Jaruthavee, for roughly $100 million in a deal that closed Tuesday, sources told The Real Deal.

Klein will continue to manage the day-to-day operations of the 81-key Art Deco hotel at 8358 Sunset Boulevard under the new partnership, he told TRD.

In March, Klein unexpectedly exercised a right of first offer (ROFO) to buy out his former partner’s 80 percent stake in the property. then immediately reached out to Jonah Sonnenborn, who leads Access’ real estate division.

“Jonah was my first call,” Klein said, adding that the two had known each other since Sonnenborn was at Dune Capital Partners.

Page Six first revealed that Blatvanik was the partner involved on Tuesday.

Access, whose portfolio includes the One & Only resort in the Bahamas, had poked around the Sunset Tower when the Jaruthavee entity’s 80 percent stake first hit the market, Klein said, but did not close on the deal. The hotelier held out for their bid this time around, despite the four other potential partners interested.

“Not only did I feel like I was the prettiest girl at the dance with five suitors, but I also went with my first choice, which was the best proposal — not the highest offer,” he said.

Klein has long owned 20 percent of the Sunset Tower. As part of the Access deal, sources said he’s increased his stake to closer to 50 percent. Klein, however, declined to comment on this.

“The actual number is irrelevant,” he said.

There is other gossip swirling around the hotel stake trade. In addition to the suitors that Klein mentioned, a Saudi investor is rumored to have made a verbal offer for $125 million. Sources said Klein’s former partner wanted to accept the offer, which came with the stipulation that the investor move into the top three floors of the hotel, removing 20 rooms from the property. Klein refused to accept the offer, angering the Jaruthavee entity, who felt it was the most profitable option for all involved, according to sources.

Klein declined to comment on the Saudi talks, as did a representative for E.R. Hollywood, the Jaruthavee-related holding company.

Klein and Blavatnik plan to renovate the guest rooms, the terrace and pool area at the property this fall, but will keep the hotel open, the partners said in a statement. The Tower Bar will remain — to tinseltown’s relief– unchanged.

“We look forward to working with Jeff, an incredible hotelier, to preserve the hotel’s storied history and Art Deco elegance while elevating the guest experience even further,” Sonnenborn said in an emailed statement.

Klein bought the Sunset Tower Hotel with Peter Krulewitch for just $18.5 million in 2004. Designed by Leland Bryant in 1929, it was originally a luxury apartment hotel that was home to several Hollywood legends, including Marilyn Monroe, Clark Gable and Joan Crawford — along with their paramours. Today, a penthouse room at the hotel costs about $2,300 a night.

Klein, who owns New York’s Monkey Bar,  recently acquired L.A.’s  San Vicente Inn. He is renovating the property to be a private club, dubbed the San Vicente Bungalows, set to open in 2018.

Blavatnik, who Forbes estimates is worth $19.1 billion, was born in Ukraine and is a major player in petrochemicals, telecommunications, media and real estate. In 2013, he sold his stake in Russian oil company TNK-BP for $7 billion. His real estate holdings include New York’s most expensive co-op, a $77.5 million pad at 834 Fifth Avenue. He has more recently invested in entertainment, acquiring Warner Music Group in 2011.

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