Billionaire Pritzker Purchases Rest of Commune Hotels
Billionaire John Pritzker, the son of the late founder of the Hyatt (H) Hotels Corp. chain, bought the 50 percent of closely held Commune Hotels and Resorts that he didn’t already own for an undisclosed amount.
Through his private-equity firm Geolo Capital, Pritzker purchased the stake from the Pomeranc brothers -- Jason, Michael and Lawrence -- who had formed a joint venture with Pritzker in October 2011. The three contributed hotels from their Thompson chain, founded by the brothers in 2001, to the partnership.
Pritzker is taking over six Thompson properties including two in New York, the Hollywood Roosevelt in Los Angeles and the Belgraves in London, as well as the Thompson brand name. Not included in the deal are 60 Thompson, Thompson LES and 6 Columbus in New York; Hotel Victor in Miami Beach; and the Thompson Beverly Hills. Thompson LES and Thompson Beverly Hills will change their names under the brand-acquisition agreement.
“This creates better alignment between management and money,” Pritzker said of the buyout in a telephone interview. “It allows us to use our own capital, to grow our three brands in the way we want to, and have a single, focused management. We won’t have two different points of view.”
Over the past five months, Pritzker has assembled a new management team for Commune, which aside from the Thompson hotels also includes 27 Joie de Vivre boutique properties and a new “value-conscious” brand known as Tommie. Two Tommie- branded properties are under development in New York.
The team includes Chief Information Officer Mike Blake, who previously held the same position at Hyatt; Phil Keb, executive vice president of development; Rick Colangelo, executive vice president of operations, who was formerly at Kimpton Hotel & Restaurant Group LLC; Jorge Trevino, executive vice president of brand operations; and Greg Smith, an executive vice president who will oversee human resources training and recruitment.
Pritzker in November hired Niki Leondakis, who had been at Kimpton for 19 years, as chief executive officer of Commune Hotels. The purchase of the Pomeranc family’s stake will make the company more “nimble,” she said in an interview.
“This way we can make decisions more quickly,” she said.
Jason Pomeranc and his brothers “are incredibly proud to see how Thompson Hotels has evolved into an enormously impactful global hospitality brand,” he said in a statement today. “We now look forward to exciting new endeavors and wish John Pritzker and the entire Commune family well.”
Pritzker founded Geolo Capital after a 2001 settlement divvied up the family fortune. It awarded Pritzker and 10 siblings and cousins at least $1.35 billion apiece, according to court documents. The family retains a controlling stake in Hyatt, started by Jay Pritzker. Pritzker left the company, where he started his hotel career as a teenager, in 1988.
Commune has 43 properties and 14 under development, including five in New York, Pritzker said.
Through the Joie de Vivre chain, which Pritzker acquired control of in 2010 for an undisclosed price, Commune includes such properties as Hotel Tomo and Hotel Vitale in San Francisco, Hotel Lincoln in Chicago and Carmel Valley Ranch, a golf-and-spa resort with more than 400 acres (160 hectares) in California.
Pritzker reiterated his 2012 goal for Commune to reach $1 billion in revenue within five years. That compares with the almost $500 million expected in 2013.
The company has been in talks with investment firms to help expand Commune, including some it has done other deals with, Pritzker said. A year ago, Pritzker and AJ Capital Partners bought the Chicago Athletic Association building for $13 million and agreed to spend $20 million to convert it to a luxury boutique hotel.
“We’re looking to grow as long as we’re being productive,” Pritzker said. “We have done it and continue to do it. There’s a number of different ways to deploy our money.”
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