Buyer to restore St George to its former glory
Wellington's art deco Hotel St George is set to start a new life under owners who have bought it for just over a quarter of the price that was paid for it six years ago.
"We're going to restore it to its former glory," said Wellington investor, developer and hotelier Eyal Aharoni and his wife Antonietta.
They bought the heritage-listed property for $5.1 million from Melbourne-based Orchard Funds Management, which has taken a huge loss on an investment it made when it bought the St George from the Joyce Group for $19.5m in 2004.
Built on the corner of Willis and Manners streets in 1929, the St George was for many years Wellington's grandest hotel – during World War II it was requisitioned by the US Marines, the Beatles stayed there in 1964 and it has hosted royalty and touring international rugby teams.
After falling into decline, it was sold to Wellington Polytechnic in the 1990s and converted to a 143-room hostel. It subsequently changed hands twice and Victoria University used it as a hostel until a year ago, when it declared it was no longer prepared to occupy the building because it did not meet its earthquake code requirements. Apart from the ground-floor retail space and podium floor, it is now vacant.
Mr Aharoni was pleased with his purchase, saying it had a lot of potential as a 140-room hotel in a good location.
He said it fitted in well with his Prime Hotels – the Abel Tasman Hotel just a little further up Willis St, the Central City Hotel a block away in Victoria St and its 90 apartments at the top of Willis St.
The immediate plan was to use it for long-term accommodation and then to start doing it up with additional earthquake strengthening before converting the rooms to three-star family hotel accommodation.
Mrs Aharoni said it was all very exciting because the St George had so much character and represented so much of Wellington history: "It's a building with a lot of good stories and it's really nice to market that."
It had a beautiful lobby and staircase with lots of wood panelling and high ceilings. "It will be so much fun to take it over."
It was looking a bit tired but all set to get a facelift with a good paint job, big new flagpoles out the front, and sympathetic renovation, complete with photos to showcase Wellington's history.
She said they hoped to involve her father, Raffaele Muollo, who owned Rafaelle's Hotel in Oriental Pde.
Mr Aharoni said he bought it because he was a long-term office and hotel owner in the city and it was a good investment.
"It was a tender and I paid the highest price, but it has got some issues to deal with. It was not a straightforward investment – it's not producing an income at the moment."
Asked if he felt sorry for the previous owners, he said: "I think they've done a few other worse investments than that – I think it's a sign of the times."
The hotel, which has a rating value of $7.2m, has a category II heritage listing that protects its facade but allows alterations to the rest of the property.
Colliers agents Michelle Spiers and Rosemary Bradford said seven tenders were received and there was fierce competition between the three top bidders. "At that price it was a good buy," Ms Spiers said.
Who Is Eyal Aharoni?
Eyal Aharoni came to New Zealand from Israel in 1988 to further his education as a geophysicist before starting out as a developer.
His Prime Property Group of companies now owns a substantial number of properties in Wellington.
Its portfolio includes three blocks in Lambton Quay, two in Featherston St, as well as office towers in Molesworth St, the Terrace and Victoria St.
The company also owns the Abel Tasman and Central City hotels.
Mr Aharoni has been involved in a protracted legal dispute after pulling out of a 2005 deal to buy the old Napier Hospital, and has also been involved in contentious housing developments in Khandallah and Newlands.
The Dominion Post