Relevant Group sells Morrison Hotel site at a loss to AHF

In $12.4M deal, buyer and seller sign development pact for residential, hotel project

Relevant Group Sells Morrison Hotel Site at a Loss to AHF
AIDS Healthcare Foundation’s Michael Weinstein and Relevant Group’s Grant King with the Morrison Hotel at 1246 Hope Street in Los Angeles (Google Maps, Getty)

Relevant Group has sold the Morrison Hotel in Downtown Los Angeles — named after appearing on The Doors’ album cover of the same title — to AIDS Healthcare Foundation, The Real Deal has learned. 

The hotel developer, run by Grant King, sold the 111-key hotel at 1246 Hope Street for $12.4 million, according to a deed filed with L.A. County earlier this month. King did not respond to a request for comment. 

The sale is both a loss and reprieve for Relevant — the firm bought the hotel for $18 million in 2018, records show. Relevant had spent another $20 million buying up sites around the hotel. No deeds have been recorded for adjacent sites. 

However, the sale resolved a default on Relevant’s loan on the project. In September, Relevant was served with a notice of default from lender Columbia Pacific Advisors, which said Relevant owed $13.2 million, records show. 

A reconveyance deed was filed after the sale closed, meaning the loan was paid off or forgiven. 

Relevant and nonprofit AHF also signed a “development cooperation agreement” to jointly build a residential, hotel or commercial project, records show. The agreement was a condition of the sale. 

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Relevant had sought a development partner on the site since last year — it was offering a 50 percent stake in the project, according to marketing materials obtained by TRD

The Morrison Hotel was built in 1914 and was later converted into a single-room occupancy property — until Relevant revealed plans six years ago to build a 444-key hotel with 136 residential units at the site. 

And to make up for removing the single-room occupancy use — housing typically reserved for low-income earners — Relevant planned to build a 149-unit supportive housing project. 

It’s not clear how much Relevant’s plans will change with AHF’s involvement. 

The sale was subject to the city of L.A.’s new transfer tax — a 4 percent levy on all commercial and residential sales over $5 million, and 5.5 percent on sales over $10 million. 

On this deal, the city’s tax bill came out to more than $700,000. When Relevant bought the property in 2018, at a higher price, the city’s tax on the transaction was $81,000. 
AHF also owns the 155-unit Barclay Hotel in Downtown L.A., an affordable residence hotel with relatively low rents, likely in the hundreds of dollars per month for some longtime residents.

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